Blockchain, it’s the future of permanency, and it’s time to get on board.
While the prospects of getting rich via Bitcoin still dominate the news cycle every once in a while, it’s the underlying technology that you and I should be interested in. The blockchain, the technology upon which cryptocurrency is built upon, has technological implications ranging from national defense to banking and down to the core of Project Management.
So here’s how I see the future
I recently stumbled upon a white paper, Blockchain and the Project Management Office (BPMO). So naturally, as a self-professed tech junkie, I was intrigued. I’ve been using crypto-currency and blockchain tech for more than five years, watching great projects rise and fall within the landscape (see dApps for examples). “Crypto” isn’t just for tech-geeks to become millionaires anymore- it’s changing how a business will function in the future.
If you’re not at all familure with what a blockchain is or how it’s used, worry not. Below we’re taking a short tour of what a blockchain is and, more importantly, how it has the potential to change how project management/managers work down to its very core. Let’s ride! 🛵
I’m getting help with this section via r3 and the above-linked document. The gist of a blockchain is simple; information is securely recorded and locked into many computers across the globe. No data is recorded on a single machine (node); it’s shared, duplicated, and agreed upon by all nodes (often labeled as consensus). Data is structured as a continuously growing list of records (blocks). Each piece of information is secured cryptographically with an immutable (unchangeable) cryptographic signature called a hash. New blocks are added only after being validated by the consensus of a peer-to-peer network of participants chaining them together, hence why distributed ledgers are often called blockchains.
The system enables assets (businesses, people, machines, etc.) involved in a transaction to know, with certainty, what happened and when. It confirms other parties are seeing the same thing without the need for any post-deployment interaction. The act of sharing/duplicating the data is essential; once the information is spread out, it becomes ingrained into an immutable ledger (also called Distributed Ledger Technology (DLT)) of the what, when, where, etc.
The concept of sharing information across additional nodes is how the database becomes decentralized. No single node is in charge- there is no central server/database. If the data is tampered with on one machine, that data is compared to the rest of the networked devices. If it is found to be different- in any way- it’s discarded/ignored.
With the data being immutable, even mistakes are on record.
Making the leap from Bitcoin to business infrastructure
“Every agreement, every process, every task, and every payment could have a digital record and signature that could be identified, validated, stored, and shared.” ~Harvard Business Review, Marco Iansiti, and Karim R. Lakhani
Tasks can be marked completed without intervention, less that of someone with a scanner or a phone to type yes or no. The blockchain can handle tasks that a PM/Assistant PM would typically do. However, none of this can be executed without a smart contract or a contract coder. And even this task is being simplified to filling out a few lines on a website and hitting go.
A “smart contract” is considered smart because once it’s deployed, it is generally self-executing. Sure, you need to have someone code the contract, but after that, it’s hands-off through completion. The creator defines predetermined terms, monetary payments/penalties for successful/failed agreements, or implements a positive/negative reputation history log to keep participants on task and on time. Utilizing distributed ledgers will help project managers reduce the time and resources needed to provide stakeholders status reports via a real-time view of all project activities. Anyone with access can see what happened and any issues as they arise.
As a task is completed or a part is delivered, the completer/receiver can validate that the job has been achieved via a central web app or scanning a barcode with a phone. If payment were pending via completing the task, payment would be made automatically, probably before the delivery driver even gets back in their vehicle. The outcome for this task has been done with minimal intermediary involvement, just someone scanning a barcode. There have been use cases where embedded Bluetooth or RFID chips allowed for no involvement- once the object was within the signal range of a/the reader, the contract was executed, and parties were paid. $💰$
The real Digital Project Manager
The term “digital project manager” has gained some steam over the last few months as teams have been forced to leave their office desks and into their dining rooms or home offices; I’ve set up on my children’s craft table, now dubbed “dads office.” However, future PMs will be digitally bound as smart contracts and obligations are completed and captured in real-time via computers worldwide. The PM will get a notification on their phone that “task 435 has been completed,” and they’ll move on about their day.
Throughout, the project manager will remain central to organizing, assigning, and approving pending contracts, as many are today. However, with data funneling into a single system or dashboard, the project management team will reap the benefits of a single source of authenticity regarding most actions. In turn, the project manager spends less time on adjustment activities and more time on being the Project Manager, organizing resources, mitigating disruptions or uncertainties, and keeping the project(s) on course.
…the project managers’ role becomes less administrative and more strategic, and this creates opportunities for organizations to harness their talents to boost productivity and achieve better project outcomes. (BPMO)
More specific examples noted in the BPMO cite the “[p]ioneering blockchain efforts in the construction sector; process automation to free up project managers to perform greater value-adding roles in their organizations.” They also discuss the issues caused by contract and work/re-work approvals, change requests, invoices, and payments as the leading causes of delay and headaches overall (did someone whisper errors, too?).
On the subject of construction, there’s a side note in the document stating it’s “…estimated that 95 percent of building construction data currently gets lost on handover to the first owner.” That’s crazy. Blockchain to the rescue: its ability to be a secure ledger of all work done to create the building, a running list of people who worked on it, and even a total inventory of items placed in the new building- down to the LED lightbulbs.
Build a shared incentive and reputation management system where the performance of employees, contractors, and suppliers is visible to the project ecosystem. (BPMO)
An example use-case
Thus far, we’ve discussed the infrastructure and potential project manager changes from the 40,000-foot level. I want to offer this use case that I’ve entirely made up yet chosen to illustrate the process’s worth of pulling it all together. While this isn’t simply a “project management” integration example, I hope it helps explain how the overall concept works.
The Car Co. hired a brilliant PM team to create a first-of-its-kind car plant to implement blockchain tracking and then pull it all together into a finished product, a car. However, only three months after being on the market, this newly created car has received several complaints of factory-installed headlights/headlamps overheating and melting their plastic covers. While nobody has been reported injured from this issue, there have been several fires reported.
Lucky for us, the company fully integrated blockchain technology up and down the supply chain and within their factories. Each piece of hardware installed on and in the vehicle has been serialized and scanned, individual light bulbs included. The company investigator pulls up one of the reported vehicles by its vehicle identification number in a central database aggregated from several hundred computers around the world. The investigator can see when the car was manufactured, who added what to the vehicle, and where/when those parts were produced.
Because this company used a total blockchain solution, the suppliers are also integrated into the system. The investigator locates the bulbs in the database that show the design specifications of parts, materials, and other pertinent information- down to who was working the machine that day that created the bulb and even the raw material origin.
With this data, the investigator concluded that the light bulb’s manufacturer received the wrong diameter of the tungsten rod used as the filament in the light bulbs. This is known because the tungsten manufacturer is also part of the blockchain integrated supply chain, and their data was added to the blockchain when the rods were created. The lot delivered to the bulb manufacturing company was scanned, and the data was placed into the blockchain. The investigator found that the smart contract used did not have a mechanism to verify the tungsten’s size to the specifications, only that they were delivered.
Since the company uses this system, they know where each car is currently located (inventory, dealership, or customer-owned), and thus they can remedy the issue. In addition, the smart contract for future vehicles was updated to ensure this did not happen again.
All aspects of this interaction could theoretically be traced, from the machine operator that mined the ore for the tungsten, to the name of the new vehicle owner. A complete digital record of the car could follow it for the vehicle's life.
We are closer than you think
The future isn’t so far off. The technology is used, tested, and validated worldwide through supply chains and corporate offices. Even Glassdoor has plenty of blockchain-related jobs listed. However, the most significant obstacle to moving forward with its use will be the small businesses of the world, where the financial resources needed to implement the infrastructure will be the hold-up.
However, I feel major corporations will begin opening up their software/hardware for use across the industries; for a price, I’m sure.