When you think about blockchain, you will always think in relation to cryptocurrencies like bitcoins to ensure secure transaction, fool proof identity and distributed ledger unlink centralized entities like banks. These features of block chain have applicability to variety of other industries while dealing with different type of documents, sharing information, making payments and exchange of information. In one of the HBR article, “How Blockchain will Change Construction”, the authors discuss the possibility of leveraging the blockchain technology for the strategic project execution involving multiple vendors, contractors and safety regulations. In their words, simply the blockchain concepts can be applied to the any project management practices.
Let’s understand a bit about blockchain before how it can be useful in project management process. Blockchain as you may be aware is the technology that supports distributed ledger concept where every transaction is a block created digitally and authorized by everyone in the network. Once the block is added to the blockchain, it can be viewed publicly by everyone on the network and it is impossible to manipulate.
Blockchain in Project Management
Blockchain provides an ability to maintain an immutable record of events or transactions using distributed ledger technology. This property can potentially transform the PMO of any organization and its practices. The next generation project management workflows can be powered with the help of the blockchain as well.
Blockchain can serve as a platform of trust as the information available in the blockchain ledger is untainted and in order to manipulate the data or tamper with the data, it requires enormous amount of compute power. The project manager can completely rely on the information available in the blockchain related to projects like timeline, cost and schedule information to make informed decisions. Any changes made to the blockchain ledger (or block) needs to be authorized by everyone in the network before it comes available to everyone.
One source of Truth
Project managers need reliable information to make quicker and quality decisions. Blockchain provides a single platform of truth by maintaining information related to settlements, milestone status, project status or activities and resources. With the trust established, the information can be exchanged between multiple parties including companies, vendors and suppliers seamlessly without manual intervention or reconciliation of documents.
Manage Constraints effectively
The goal of any project manager is to manage the constraints including meeting the schedule and within the budget. The blockchain is tamper proof due to the nature of the implementation of consensus-based algorithm and the blockchain based PM tool can enable project managers in superior project operational workflows. By decentralizing and hash enabled blocks, blockchain saves time and energy for the project managers to utilize their time wisely by avoiding manual effort.
Smart contracts are nothing but predefined piece of code written and stored in blockchain and get executed automatically when certain conditions are met. These smart contracts are immensely useful in business collaboration settings where agreement is enforced between all parties involved without a central party. Since smart contracts are automated, project managers need not spend manual time in processing paperwork or do reconciliation. Every block in the block chain is heavily encrypted, so the project information is untainted and available to everyone at the highest level of transparency.
Project managers spend great deal of time in communicating the project status to all the project stakeholders. Project managers also keep track of any changes to the project baseline including cost and schedule and make appropriate changes to the project. This information is important to any project managers to keep the project on course and sometimes the PM verifies the corrections manually due to the nature of information (could be mutable) and spends great deal of effort. With the blockchain authentication and verification, project manager can now spend very less time in communicating the status to stakeholders.
Limitations of Blockchain in Project Management
Let’s now see some of the hurdles that blockchain entails while dealing with project management.
- Blockchain technology is nascent and is still in its infancy the exploration outside of financial markets are very low.
- Signature verification is usually slower than regular process as everyone on the network needs to verify leading to redundancy.
- Regulatory and statutory compliance requirements could become a bottleneck when implementing blockchain technology when it comes to settlements and invoices from projects
- The amount of energy required to implement a blockchain network is immensely huge and is unsustainable in the long run
- Onboarding all vendors and stakeholders in the project to the blockchain platform can prove to be a daunting task.
Blockchain is still evolving and is at very initial stages of development before its full power can be unleashed. But in an effort to create distributed ledger to store all project related information, the project manager can seamlessly communicate the schedule, cost, issues, risks to all the stakeholders in no time and with 100% transparency. The platform can also provide confidence to all the stakeholders as it provides guaranteed and untainted information related to the project status.
There are still some blockchain related project management positions open when you look at glassdoor or indeed.com. This clearly proves a point that organizations are still pursuing to push the boundaries in blockchain.
Ramkumar Arumugam is an experienced Program Manager with 15+ years of success in leading all phases of diverse technology IT Projects in retail, e-commerce, insurance and pharma market research industries. He is currently working as Senior Program Manager in Cognizant and holds multiple certifications including PMP, PMI-ACP, CSM, CSPO, CSP and ICP-ACC.He is a regular contributor to projectcubicle.com.