The rise and growth of blockchain in the past decades are electrifying. Its potential is sprawling from the bitcoin cryptocurrency to other non-crypto aspects. From one sector to another, it simplifies complex operations, creates and secures data, defines newer means of communication, and much more.
Indeed, we have seen blockchain technology transforming economic, legal, and political systems, among others. Can this same power behind these feats facilitate effective strategic innovations and projects? Let’s find out.
How Blockchain Technology Influences Other Industries
Blockchain is revolutionizing diverse industrial sectors. Experts shared that it can add $1.76 trillion to the global economy by 2030. It undoubtedly has benefits that will impact businesses and society.
Of course, the effects of blockchain technology are already being felt in the economy. Blockchain may be the solution for organizations experiencing cyber-attacks and data breaches.
Also, record keeping is the core function of any business. Blockchain can automatically secure these ledgers and create a system void of errors.
Business owners and accountants can use this software to provide digital and auditable data to stakeholders or project teams. Companies willing to embrace this tech may be a fresh breath on their current practices.
Project Management Challenges
Project managers must constantly remain on their feet to ensure the project is on time, within budget and scope. The more complex a project is, the greater the challenges. Despite the array of resources and project management tools, industries still waste millions of dollars yearly trying to overcome the difficulties PMs face. Listed below are the common factors that hamper the efficiency of project managers.
Communication Among Stakeholders And Team Members
Effective communication is a vital factor in any successful project. Project managers should be able to communicate clearly with team members and set KPIs.
Miscommunication can slow down activities and reduce work efficiency. 32% of project management professionals shared that this might be the biggest problem. Effective communication can bridge the gap between contractors and stakeholders or clients.
Another challenging issue in project management is effective cost management. Research reveals that 49.5% of manufacturing managers shared that this is their primary challenge. Financial mismanagement can cause severe loss to any business.
Inadequate Project Risk Management
Risk management might be the most challenging part of being a project manager. Of course, all projects can’t go as planned, especially when dealing with many variables. Professional PMs can detect these “what if” scenarios and devise a complementary plan.
Lack Of Stakeholder Agreement
All stakeholders must clearly understand the vision and steps through the project lifecycle. Else, there might be misunderstandings that may lead to a waste of time and resources. Some project managers switch to a project management tool that enables clients to incorporate feedback and oversee all the operations. But this isn’t immutable as it is also prone to errors.
Poorly Set Goals And Objectives
The first step to the success of any project is adequate planning. It is safe to say it is the backbone of any successful project. Failure to set clear goals can create confusion among the team. A lack of clear project goals is responsible for 37% of project failures. For effectiveness, each goal should be SMART–specific, measurable, attainable, realistic, and timely.
How Does Blockchain Help With Sustainable Project Management?
Blockchain operates uniquely. It is structured as blocks of record, linked to one another, and secured cryptographically. New blocks can only be created after other nodes on the system authenticate them. The participants are constantly communicating with one another. Hence, data spread rapidly in the network.
PMOs can integrate blockchain to improve the efficiency of the project life cycle. Its primary features–transparency and immutability–can create an atmosphere of trust between stakeholders, clients, and project professionals. With this, they can interact faster and more securely.
It’s easy to create and delegate tasks by automating them on the blockchain. Once the tasks are verified and the block is formed, team members will be notified immediately.
Effective communication isn’t only vital among team members but stakeholders as well. Initially, PMs rely on project management software to give stakeholders an overview of the work processes. But the integrity of the information is questionable, and anyone can alter it at any time.
We have explored each point below.
Protection Of Project Data Using Distributed Ledger Technology
One of the many benefits of blockchain is its ability to store immutable data records. Its operation is similar to distributed ledger technology.
Each transaction recorded on the block connects to the others before it. It is connected cryptographically, making it almost impossible to infringe the data.
This characteristic of blockchain is helpful. It gives a complete overview of the project and comes in handy in resolving disputes among team members, clients or shareholders. Plus, the data on the chain is reliable and can give insights to identify time spent on each task, opportunities for improvement, etc.
Optimization Of Workflows Using Smart Contracts
Smart contracts are digital transactions stored on the blockchain. These transactions are automatically executed when certain terms are met and verified by the parties involved. In cases when the project is complex, PMs can use smart contracts to automate multiple tasks. Unlike traditional contracts, smart contracts eliminate the need for paperwork or intermediaries.
Also, they operate on the consensus mechanism–no transaction can be authorized without the consent of the nodes on the network. The transparency in which it works makes it reliable and more secure than other traditional contracts.
With Smart contracts, project managers can automate a series of operations, from simple to complex ones. Consider a scenario where you want to crowdsource for a particular project. You could create a smart contract to receive donations until a specific goal is attained. Once the goal is met, you will receive the money in your digital wallet. Else, it would be returned to the supporters. This technique creates an atmosphere of faith among the parties involved.
Since smart contracts are stored on the blockchain, it also has some characteristics. It is immutable, accurate, and fast. As a result, the possibility of mismanagement is low. You can utilize it in the financial, automobile, health sectors, etc.
For Building Reliable Systems
The backbone of any industry is reliability. PMs play a considerable role in helping organizations stay on top of the market and customer trends.
Blockchain has the potential to create a new foundation for new project systems. Instead of the traditional methodology involving intermediaries acting as guarantors, blockchain proposes a more user-centric approach. This mitigates the necessity or cost of acquiring a third party.
A transaction stored on the blockchain is identically replicated across the parties involved in the system.
Create And Manage Digital Assets
Using blockchain to manage assets solves disputes or discrepancies in data. Industries such as automobiles and construction require quality control for project execution. More often than not, buyers will rather purchase verifiable authentic products. This can be made possible using blockchain.
Blockchain eliminates the barriers of lack of transparency experienced in conventional supply chains. The technology is secure and public, so it is possible to track orders as it moves through the supply chain from start to finish.
Also, since the transactions are cryptographically secured, it’s almost impossible to alter the operation without a consensus from the nodes involved. So stakeholders or buyers can access these items, annihilating all doubts.
In addition, blockchain technology improves the time it takes to resolve data disputes and critical operational parameters.
To Improve Collaboration
Collaboration is the soul of a business. For a successful project, managers must work closely with developers, designers, and many more. But collaborating without hitches doesn’t come easily. Some members may lack accountability or commitment, which can affect the project outcome.
Blockchain can be used to record project activities. Not only is it speedy, but it can also phase out the need to render paperwork for the project since the data is accessible to every node on the chain.
Use Cases Of Blockchain In Project Management
Since blockchain is in its early stages, there’s still room for more discoverability. However, here are some use cases of blockchain in project management:
Project Management & Payments
Payment barriers are one of the many issues affecting PMs. Payment platforms take longer to process payments, especially converting currencies. Asides from that, they include substantial conversion fees.
With blockchain-based payment systems, transactions are processed in seconds. Exchanging digital assets is feasible using tokens or digital cryptocurrency, like Ethereum. Also, on blockchains like Celo, a transaction can be done with as little as $0.01 in fees.
BanQu inc., a blockchain integration software, is helping farmers in Zambia facilitate payment and manage projects. Partnering with AB InBev, BanQu enables farmers to monitor their farm operations and supply chain and send payments to their mobile phones. Everything is completed on the blockchain, and the farmers can receive payments without having a bank account.
Project Management System
Practically, the technology can automate tasks that may take hours or even days by human effort. With distributed ledgers, PMs can reduce time-consuming activities and provide stakeholders or project participants with an authentic and real-time view of project operations.
ConsenSys, a blockchain technology company, uses blockchain to facilitate effective project management. The company utilizes blockchain to manage several activities, such as software development, hiring, compensation, and project management.
Project Lifecycle View
PMs can find it time-consuming to relate the status of a project to the stakeholders involved. They might need to compile data from each team on the project, vet for accuracy, and make improvements.
However, this method is monotonous and too slow for any business to rely on. Here, blockchain can serve as a communication platform, allowing them to manage workflow more efficiently. It can cut down delays in verifying information. Also, it can boost the decision-making process.
HerenBouw, an Amsterdam-based construction company, integrates blockchain solutions to improve project lifecycle. Propulsion Consulting developed this framework. Their focus is “logging transactions at legally binding moments where audit trail and accuracy are essential.” The benefit of this blockchain-enabled project management tool includes timely information, fewer mistakes, and unambiguous communication.
Supply Chain Management
Supply chain project management aids the coordination of resources to deliver a goal within the speculated time, scope, and budget. As goods transition through various sectors on the chain, PM needs to roll out strategies to improve supplier efficiency. One of the drawbacks is overseeing the success of the processes from the beginning to the end.
But blockchain can be a potential solution to almost all challenges experienced by supply chain project managers. Since blockchain is a decentralized and distributed ledger, the transactions can be secured without elements of doubt. Blockchain will have a copy of the records.
Each process can be tracked and recorded as they pass through the chain. So, each participant can easily verify product authenticity and logistics and make payments.
This is seen in the case of Walmart’s partnership with IBM to facilitate traceability across the global food system. They are creating a food safety blockchain solution to digitalize the food supply chain system.
Challenges of Implementing Blockchain In Project Management
Perception of the Technicality of Blockchain
Blockchain is a term that mostly stays in the crypto world only. Most people outside the crypto space don’t understand how it works, which may hamper its acceptance in project management. Nevertheless, as long as the blockchain developers create intuitive interfaces for project managers, this shouldn’t be much of an issue.
It can be costly to build new systems, especially one on the blockchain, especially now when blockchain developers are more expensive in some cases than regular app developers. Not to mention maintenance costs.
Interoperability is critical to address as this is one reason most businesses do not consider integrating blockchain in these processes. Within the blockchain itself, most blockchains are maintained in isolation and do not communicate with other peer networks or different blockchain-based systems.
In cryptocurrency, bridging has come in, but that doesn’t cover other use cases of the blockchain.
Outside blockchain, most project managers already use other systems, and they may still need them while using the blockchain. It is crucial that blockchain can communicate, transmit and receive data from systems outside it.
The Future of Project Management With Blockchain
The future of blockchain in project management is promising. With Blockchain, we can imagine a system where every task and process will have a digital signature and where every part, including payment, supply chain, tasks management, and more, are connected easily.
In addition, Individuals and industries can interact freely with little or no hitch. Blockchain will also reduce vulnerabilities to cyberattacks and the infringement of data. Like other new technologies, blockchain’s potential is still averagely maximized. But the adoption won’t be instant. It will gradually seep into the project management industry and finally take over.