You might have heard that blockchain is going to revolutionize the way we work. To be frank, this is an understatement. Many industries are already scrambling to make use of blockchain technology to optimize workflows and for project management. But we are still very early in the adoption process and, as time goes by, more industries will embrace the technology.
One day, EVERY industry will use blockchain at the core of their operations. Many companies will consider it to be the backbone of their operating systems. But how will blockchain technology change existing methods of project management and why is it going to become the norm in the future?
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How Does Blockchain Influence Other Industries?
At the heart of blockchain technology is a system that provides unparalleled security and transparency. A common misconception is that blockchain is anonymous. In fact, all the major projects use open public ledgers (blockchains) that allow users to see and scrutinize every transaction.
Private blockchains used by companies also exist. Instead of being publicly accessible, they require permissions. The systems display all data in a transparent manner – only to those who have access. This is crucial to oversight and project management. Companies can monitor everything that is going on by looking at the blockchain.
This eliminates three very common problems with project management:
- Corruption. With blockchain technology, the funds are sent in exactly the way the overseer wants. Funds don’t disappear, and bad actors cannot manipulate the blockchain to move them somewhere without leaving a clear audit trail.
- Delegation of Tasks. Most projects have problems with communication and passing information down the chain. Blockchain automates many processes. This removes human error from the equation. Aside from that, once tasks are locked into the blockchain, everyone knows their duties for the project to proceed.
- Payments, Invoicing and Tax. With blockchain technology, all transactions are stored securely on a digital ledger. This means that when it comes to paying taxes, the blockchain has an audit of exactly what needs to be paid. Invoicing through smart contracts is another beautiful aspect of blockchain. Funds are put into a smart contract and only released once the parameters of the contract have been met.
Is Implementing Blockchain Technology in Project Management a Challenge?
The answer to this is a resounding yes. Blockchain technology is very efficient when it is set up correctly. For that, a company will need to decide how each process functions on the blockchain. For example, invoicing is often done with a trail of paperwork and goes through various authorizations, with blockchain, this will need to be built into a smart contract to ensure that the blockchain behaves exactly as it is expected to.
When you consider companies have hundreds (if not thousands) of processes that they need to complete daily, creating a functional blockchain will clearly take time. As a result, the road to its implementation is slow, careful and methodical. Once in place, it will improve workflows dramatically. The level of work a company needs to do is also reduced considerably.
Currently, implementing a blockchain is costly because the technology is new and poorly understood. As cryptocurrency trading e.g. using Ethereum becomes more widely adopted, and projects become more streamlined, it will be easier for companies to onboard blockchain tech without as much cost and hassle.
Blockchain’s Benefits for Project Management
There are 5 major benefits that companies can receive by implementing blockchain technology.
Managing digital records
Record keeping is a very difficult process in most industries. Paperwork is often lost, manipulated, or filled out incorrectly. Blockchain technology prevents all those things from happening and locks all information into the blockchain itself. No one can manipulate or tamper with any of the info held.
This is especially useful with property deeds, legal documents and medical records. Using a blockchain ensures the information is kept safe. No one has to worry about something unexpected occurring. It is all transparently displayed to those with the correct access levels.
Exchanging digital assets
The world is currently full of payment barriers. This is especially true when dealing with cross-border transactions. If a company in Europe wants to trade with a company in the US, they will have to exchange their local currency (at cost), then make an international payment (at cost), which normally incurs a receiving fee at the other end. Most of the time, these costs are built into the payment structure and people are unaware they exist; except that they know the money they are sending loses value during the transaction.
This applies not only to cross-border but internal transactions as well. That’s why it is so important to find a service with transparent terms to swap your digital assets. For example, Currency has no hidden fees and moderate commissions so that people know exactly what they pay for and how much.
Blockchains can now communicate with one another and this facilitates payments across networks with only a network fee. Some network fees on blockchains are so tiny, you wouldn’t even notice you have been charged it. Also, blockchains are borderless and operate without the bureaucracy of the banking system.
Validating and enhancing acceptable performance
Blockchain automates many processes. This means that when managing a project, you will have less workload. It also means that the blockchain is pre-programmed to validate the decision-making process and, as a result, this enhances performance.
A common term for this is streamlining processes. Something that many project managers aim for in the real world but find it incredibly difficult without a system designed for doing it.
Building reputation systems
A key problem with current industry operations is that users must place faith in all of the working parts living up to their end of a deal. With blockchain, users have trust in the system. They know they have protection throughout the process. Blockchain will ensure that Company A only pays Contractor B when they complete Task C. Both the company and the contractor know their obligations and that they will get their reward only when they complete the process.
Executing smart contracts
Following on from the last point, smart contracts facilitate that transparency and security are integral to reputation systems. Neither party can renege on the contract once it is locked in. They also receive equal protection. There aren’t going to be disputes about payment or work with a smart contract. The thresholds are set to only complete it once all conditions have been met in full.
Project management and blockchain go hand in hand. It is only a matter of time before every industry is 100% blockchain-reliant. Until that point, there is undoubtedly going to be a steep learning curve. But when all is said and done, blockchain technology will cut costs, enhance workflows and catapult humanity into a fully digital era.
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