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Having come into prominence through cryptocurrency, blockchain is poised to disrupt industries as traditional as real estate to emerging ones such as ride sharing.
Yes, it’s still theoretical, but crypto-entrepreneurs are already working on ways to position the immutable ledger a key component of future project management workflows. In this post, we discuss how blockchain will transform the project management space.
Blockchain will protect your project data
The most obvious benefit of blockchain is the ability to maintain an immutable record of events using distributed ledger technology (DLT).
In tomorrow’s project management workflows, your team could rely on DLT for a number of critical functions, such as maintaining an unalterable source of truth.
In a distributed ledger, each node or computer will independently host project data. Each node will also update that data. In other words, no single party in this system can alter or change this data and, in turn, the entire project team will reference a single source of truth.
This will be helpful when investigating discrepancies and disputes, especially with an external project stakeholder, such as a client or subcontractor. For example, if you had scheduled your construction contractor to send people on a certain date and they send their people too late or too early, everyone on the ledger can verify if the subcontractor made a mistake or not.
Internally, you can also trust the data on the ledger when analyzing business operations to see how much time is spent on tasks, identify opportunities for efficiencies, and other benefits.
Yes, you can do the same today with a centralized cloud-based project management suite. But there is a chance of losing some of that data due to downtime from the cloud host or tampering.
With DLT, you can trust that the data set from your team is complete and untampered. In this respect, you also get data redundancy thanks to the availability of multiple nodes — in case your node is temporarily down as a result of transitioning your software and data.
Smart contracts could optimize workflows
A smart contract is basically a code that runs atop of a blockchain. It contains specific rules which both parties in that contract must agree to. Once those conditions are met, the smart contract will automatically execute or implement itself.
In complex project management workflows, you could potentially use smart contracts as a means to manage interdependent tasks.
For example, in the construction industry the use of building, information, and modeling (BIM) is growing. The basic idea of BIM is to facilitate collaboration between the different stakeholders in the construction project, such as the architectural firm, civil engineers, suppliers, and others.
Let’s imagine a building construction project involving the concrete supplier, construction crew, and the building project owner. The project owner could set smart contracts that will only notify the construction crew to come on the scheduled date after the concrete is delivered to the site.
If the concrete is not delivered, then the crew subcontractor would not need to commit to that scheduled date. This could prevent the risk of idle labor and, in turn, help control the budget of the project. Likewise, the crew subcontractor could freely send its people to another project in lieu of the original project without having to notify the project owner — they can just refer to the information shown in the BIM software.
Similarly, you could have smart contracts to only release specific orders to suppliers — for example the amount and grade of steel you need — only when the civil engineer greenlights the design. If the engineer detects a clash, the suppliers will not be notified until the designers resolve the clash.
But when that is done, the suppliers will only get orders based on the updated design, thereby saving the project owner of cost overruns resulting from incompatible materials. You can apply this to aviation, auto-manufacturing, electronics manufacturing, and other project types too.
A blockchain-based BIM suite would also provide each stakeholder with an immutable source for the project’s metadata. They can use that metadata as proof for arbitration, disputes, and regulatory reasons as well as for accreditation purposes, such as LEED and WELL building standards.
It’ll be a challenge
The potential is there, but implementing blockchain in project management will be a challenge.
For example, the blockchain ledger relies on its nodes, but if the nodes are inundated with too much data, they may become too slow. In projects with significant amounts of metadata, such as construction, scaling DLT could be a challenge. Likewise, incorporating blockchain may also require a thorough re-think of how project managers and companies approach processes.