Digital transformation: blockchain and digital ecosystems 🖥️

Blockchain is already being used in Portugal to guide businesses and organisations towards adopting digital ecosystems. But while these ecosystems have existed in one form or another for some time, going digital changes the whole model.

From energy to music, and from public companies to the private sector, more and more businesses have adopted this approach to measure more effectively and cut unnecessary costs while automating processes.

Digital ecosystems are more than the sum of their connections; they are complex, adaptable, capable of learning and self-organising. Examples such as Uber and Airbnb show us that reinventing existing business models on new platforms can achieve enormous success. This is where blockchain comes in: it gives each of these business models the ability to connect all these strands while supporting their fundamental economic principles.

This model is so universal and applicable to so many industries that it is reflected in the top 10 international companies ranked by market capitalisation. By offering new ways for people to interact, and making existing businesses obsolete or ineffective, blockchain plays a highly relevant role today.

What is a blockchain-enabled digital ecosystem?

It is a value network that brings together digital technologies and data decentralisation techniques. These ecosystems gain further advantages from blockchain's unique capabilities, such as ownership management, more effective data protection, peer-to-peer collaboration and distributed management.

These networks can be highly complex, as they have many facets. Four main aspects characterise a blockchain-enabled digital ecosystem:

• Organisation and management: the group of organisations that sets policies and provides a broad view of the ecosystem's economy and development capacity.
• Ecosystem operations: the platform on which the network operates should cover two main areas: day-to-day development and technical road maps, and operational support that must always be kept up to date.
• Membership programmes: the environment in which the blockchain ecosystem operates. Participants, observers and other roles exchange value within the network.
• The platform: the underlying blockchain infrastructure and all its requirements, such as the cloud, among others.

These digital ecosystems that have adopted blockchain are constantly growing and being implemented across various industries. Collaborative, inclusive networks for every part of a business, addressing inefficiencies in supply chains and bringing innovation. This is the grand vision behind this new way of operating. The US aviation industry, for example, has already backed it, saying that using blockchain could save around 5% a year in maintenance, repair and costs.

Of course, each industry uses this technology in the way that benefits it most. For obvious reasons, the pharmaceutical and insurance sectors cannot work in the same way.

Recommendations

Building these ecosystems is not a simple task. It may even be harder than understanding how technology brings together the many different stakeholders across businesses. Here are some practical recommendations if you intend to move from theory to practice:

1. Demystify blockchain for businesses and their leaders. Blockchain is at its peak, without a doubt, and there are many misconceptions about what this technology can bring to businesses. Key leaders need to understand its full technological potential, whatever means you use to explain it. The results are there to see too; you just need to show them.
2. Forget abstract, confusing terms. You do not need to talk about decentralisation or trust systems. What matters is showing that blockchain can help businesses overcome challenges and open up new opportunities.
3. Look for new forms of value. Businesses cannot focus solely on business-to-business relationships, meaning those between professionals. They need to find a balance with other business models. And remember that value is not always monetary: it can include reputation and information, for example. In some cases, these can be equally valuable or even the most important part of a digital ecosystem. A brand with a good reputation will always achieve better results!
4. You do not have to come up with every idea yourself. You can draw inspiration from other businesses, inside or outside your industry. You can learn more about their transformation journey and even adopt strategies that suit your own business too.
5. Create an attractive vision. Blockchain-based ecosystems require a structure and a road map that support and anticipate all present and future needs.
6. Blockchain is just one part of the ecosystem. The number and density of connections between people, organisations and things are growing exponentially. While blockchain plays an essential role in the digital ecosystem, other technologies are also vital to the business's viability.
7. These ecosystems are changeable. Digital ecosystems that use blockchain are often fragmented and highly complex to implement, which can make them confusing, misleading and difficult to analyse.
8. Think carefully about the business model. Do not expect your ecosystem to have exactly the same motivations or legal, economic and operational considerations as your competitors'. Think carefully about the business and ecosystem model you want.
9. Focus on relevance. Do not give in to the temptation to act quickly at the expense of relevance to your business. That is a serious mistake to avoid at all costs. Building a digital ecosystem requires a clear understanding of how data develops and fits into the whole business process.

Blockchain can be a powerful weapon in your company's digital arsenal. However, as with any technology, a business strategy remains essential to understanding how and when these technological capabilities can be applied.