When the last page is written on the bizarre Bitcoin story, many people believe the conclusion will be that the world was changed… but changed by the Blockchain, not by Bitcoin!
Blockchain promises a way for people to record transactions, for example, currency, information, deals or anything else that can be digital, using a ledger that doesn’t need to have a trusted central body to oversee it.
That could enable significant changes to the way that information and business happens and, more broadly, to the way that information and identity are managed.
If you’re wondering what this is all about then start with my first article Bitcoin? Blockchain?I’m already lost!
This article is about why Blockchain matters to business
Blockchain could matter because it could allow disparate companies and people to work together even if they don’t know each other, or even trust each other. And it could allow this without the need for a central body to oversee the initiative.
It addresses problems such as: “I sent it”, “No you didn’t”, “Yes I did”. The Blockchain is an unambiguous shared record of what happened and when.
Commonly quoted example of this is are supply chains, perhaps where consumers want a high degree of visibility or where companies demand precise knowledge of the quality and origin of raw materials or components.
For example, in food manufacture each part of the manufacturing process could be recorded in a Blockchain starting with the originators of all the ingredients, through the successive steps in the supply chain to the consumer.
So you could check exactly which farm, and even which cow, went into in your Steak and Ale Pie. And you can check whether it actually went moo or neigh.
A real-life example is the Tracr Blockchain register designed by De Beers to track diamonds “from mine to finger”. Every event in the value chain, each time the diamond is cut, polished, graded or traded – these are all recorded with images, and certificates uploaded to the ledger so everyone can have trust and confidence.
Of course, an unscrupulous user can make false statements or upload false records, but this can be traced precisely back to him so the scope for fraud is much reduced.
There are endless examples of ideas for Blockchains, particularly in areas like asset management, real-estate, accounting, insurance and health-care. Some of these examples are about publicly available Blockchains, some will be closed or privately run Blockchains. Wherever people and organisations work together Blockchains could enable streamlined, automated record-keeping.
Are these Blockchain ideas actually practical for business?
Right now we are probably at the start of the Blockchain story and quite what this tech can be for is not at all clear. Many of the business ideas that experts offer as Blockchain examples feel like solutions looking for problems.
But radical new tech can often seem pointless until it has matured to the point that it is practical and useful. As each new tech matures, becomes viable and is gradually adopted so attitudes change – and, what used to be slightly pointless, quietly become a necessity!
We are surrounded by, and reliant on, tech that looked pointless when raw, early ideas were first developed.
But imagine an accounting system that not only handles double entry, but creates a 3rd entry in a Blockchain ledger. And imagine if banks kept details of some transactions on Blockchains. This could create an entirely new culture of auditability and confidence and eliminate many kinds of dispute and fraud.
It’s not hard to imagine a future where keeping records in Blockchains like this is normal, expected, and potentially required by law.
But the smart money is on Smart Contracts
If a Blockchain is used to record contracts between parties then it’s not a great leap of thought to imagine that the contract is actually a programme that connects to the parties’ systems, so automating the transaction.
For example, if one side needs to lodge some documents in return for a payment, then the smart contract could receive the documents electronically, validate them, and automatically trigger the payment. Or the smart contract could provide a code that unlocks access to a physical asset in return.
Complex contractual situations like royalties could be automated by lodging the rights-holding in a Smart Contract, and someone could simply make access to the asset through the Blockchain, automatically triggering their own payment and the onwards distribution of that payment to multiple rights-holders.
As more and more devices become connected to the internet we can envisage that transfers are automatically tracked through supply chains by scanning barcodes or NFC sensors and, as ownership changes, this is recorded immutably and payments are automatically triggered.
Will any of this actually happen? What are the blockers to Blockchain?
There are plenty of issues and complexities.
Firstly there are technical problems with Blockchains. The complex security mechanisms mean they struggle with high speeds and large volumes. And the encryption maths is so vastly complicated that it consumes huge numbers of servers, all drawing massive amounts of electricity – Bitcoin is already estimated to consume more energy than the entire nation of Austria! It’s no surprise that many Bitcoin servers are located in Iceland and Canada where thermal and hydro power mean electricity is cheaper.
Although the Blockchain is secure, people have had their Bitcoins stolen because they don’t exercise proper controls of their electronic wallets. Or more primitive blunders have included people losing fortunes by disposing of old computers containing their Bitcoin access codes.
Critically, no overseeing authority means there is no one to phone… if you forget your codes, don’t use a proper password, or have some other problem then you’re on your own.
But, more importantly, any venture involving multiple parties can be very difficult to mobilise. Although Blockchains don’t need a central authority, widely-used standards generally gain traction as a result of sponsorship by well-known and trusted organisations.
Simple standards like EDI in manufacturing supply chains have never delivered to their potential and there are many different competing flavours and solutions. It’s extremely difficult to get organisations to cooperate if there is no dominant force imposing uniformity.
And, finally, this tech is still very novel and is difficult to understand. It may just be too far ahead of the market and, to many people, it might just sound like techno-babble. The internet was invented in the 60’s but it took decades to add other standards and other tech to make it usable, understandable and useful for both technicians and consumers.
So what’s the practical effect of Blockchain and Smart Contracts on my businesses?
We see 3 specific areas of change in the coming years that mid-market business owners need to be aware of.
Blockchains will enable new ways to collaborate without existing intermediaries so there will be new opportunities for new entrants and threats to existing incumbents.
1. Shifts of power
Entrepreneurs who understand specific industry areas will be able to create new commercial models using Blockchain. Of course, gaining widespread usage will be a challenge, but there will be strong interest from investors and a whole new round of wild valuations as markets try to guess who will be the new winners.
At the same time, organisations that have long had control of information and supply chains may find themselves under pressure as new entrants arrive. Some traditional organisations will need to become Blockchain experts to avoid someone else eating their lunch.
The De Beers example may demonstrate how incumbents can further secure their position if they move quickly, but new companies will also find significant new opportunities and there will be shifts of power.
Consider, for a moment, how the last 15 years has seen new ecommerce retailers eclipse old-school bricks and mortar retailers. Debenhams’ proud history of 200 years of retail didn’t count for much!
2. Smart integration
New Blockchains and Smart Contracts will offer great opportunities but only to companies who can integrate their back-office systems quickly and effectively.
To win in the new world means having a well-structured business, including clean and well-organised data, processes and systems. IT staff will need to understand how to integrate up and down the supply chain rather than how to fix a laptop.
The opportunities for well organised, structured businesses will grow. Manual, admin-heavy businesses will find themselves further disadvantaged.
3. Increased Opportunities for the Mid-Market
There is no clear benefit to larger players and Blockchains may well undo some economies of scale. And, for many larger businesses, slow decision-making and complex back-office systems will make Blockchain integration more difficult.
So this revolution is likely to open up new opportunities for well-run mid-market businesses who understand their markets and clients.
Wherever auditability and transparency are of value, Blockchains could provide new opportunities. The future will likely favour nimble and intelligent mid-market business who can seize opportunities faster than lumbering corporates. Years of building trust and reputation for honesty will be challenged by this new low-cost technology that will provide a greater degree of trustworthiness at a lower cost.
Summary
Blockchains offer a radical new future where people and companies can interact and keep records in an unambiguous new way without central authorities overseeing the process. And these records could be automated Smart Contracts that could link back-office systems together to streamline activities that are currently manual and slow.
This opens up new vistas that are currently challenging to understand and describe.
As ever, with change comes both opportunities and threats. Opportunities to companies who position themselves well, are smart and engaged. And threats to companies who are slow to realise that they have built up value in models that will become obsolete.
Blockchain is yet another new tech that promises to change the business world and, not surprisingly, it’s easy to be cynical about this. But we have to admit that the business world has, many times, been changed by new tech that was initially dismissed by cynics!
For more non-technical advice, visit our Technology Roadmap for Growth Knowledge Centre, which includes all content related to this topic.
Bitcoin? Blockchain? I’m already lost!
When the last page is written on the bizarre Bitcoin story, many people believe the conclusion will be that the world was changed… but changed by the Blockchain, not by Bitcoin!
Blockchain promises a way for people to record transactions, for example, currency, information, deals or anything else that can be digital, using a ledger that doesn’t need to have a trusted central body to oversee it.
That could enable significant changes to the way that information and business happens and, more broadly, to the way that information and identity are managed.
What are you talking about? Bitcoin? Blockchain? I’m already lost.
OK, let’s rewind to the beginning…
Bitcoin was invented in 2009 in a mysterious story that geeks love. It’s probably best understood as a currency, though some sticklers would call it an asset instead.
In many ways there’s nothing new about digital currencies like this – think Tesco points or Air Miles. We’re all very used to vouchers that are like currencies but don’t have the Queens head on them.
But Bitcoin is different because a key part of the scheme is a clever ledger, called the Blockchain.
The Blockchain has special rules and maths embedded in it to allow all the users to track the deals without relying on a central authority.
That’s right… no one is in charge!
Obviously, if you want to know how many Air Miles you’ve got, you phone the Avios helpline or check your app; or if something goes wrong you call their complaints department. They are the central authority who oversee the system and ensure it’s working smoothly.
With Bitcoin transactions (or anything else based on Blockchain) every user has access to a perfect version of the ledger so you don’t need to rely on a central body at all. The ledger is secure and reliable.
Now of course nothing is perfect, perhaps there are flaws in Blockchain that have not yet been discovered, or new kinds of maths or computers will make it hackable. You could distort the system by taking control of huge numbers of computers but it just isn’t practical. To all intents and purposes, the Blockchain is secure and reliable – in 10 years of Bitcoin there have been no interruptions, corruptions or errors.
And now there are a slew of other cryptocurrencies like Bitcoin. Arguably some of them are technically superior to Bitcoin but none of them yet has the foothold that Bitcoin does. Only time will tell which will prove to have long-term value as a currency (or asset, if you prefer!).
However, all of these cryptocurrencies run on the same kind of rails – Blockchain! Blockchains are the ledgers for all of them.
Blockchained to the rhythm
Very simply, the Blockchain is a set of rules and codes to enable a database or ledger to be securely copied and synchronised on millions of computers all over the world.
If you want to record something in the Blockchain database then you change one copy and this change gets replicated in all the copies. There are extremely clever rules that govern this process to make sure that only valid changes get accepted onto the Blockchain and replicated.
And once a change has become fact in the database then it’s impossible to undo it. If you want to check the data then you can do it on any of the copies, and if there were any doubts about one copy then it’s easy to see if it matches the others.
It doesn’t matter if any of the computers has a problem because there are so many others still running the system keeps going. It’s effectively impossible to tamper with the database because you would have to simultaneously tamper with millions of copies.
Critically, none of these databases is the master copy. They are all synchronized copies of the whole database.
Bitcoin transactions are recorded in a Blockchain ledger which ensures that there is an unequivocal record of buys and sells. There is no central bank, organisation, or government overseeing the system.
Now nothing is entirely secure, but there is no practical means to hack the Blockchain, so for the purposes of this Briefing we’ll assume it’s secure and un-hackable – because it probably is.
So why does Blockchain matter to business?
Well Blockchain could matter to business because it could allow disparate companies and people to work together even if they don’t know each other, or even trust each other. And it could allow this without the need for a central body to oversee the initiative.
And this is just the start, because Blockchains can go further and can store agreements in the form of Smart Contracts which could allow automation of lots of transactions that are currently manual and slow.
To read more about practical examples of Blockchains, Smart Contracts, and how this will create new opportunities for ambitious mid-market business, read our next briefing.
For more non-technical advice, visit our Technology Roadmap for Growth Knowledge Centre, which includes all content related to this topic.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
Infographic: The 6 must-haves for hiring ‘simply the best’ CTO!
Only the sharpest applicants make the Freeman Clarke cut. They posses an enviable range of talents that make them ‘simply the best!’ We call these talents, ‘the 6 blades.’
Download the infographic to see what we think makes up a game-changing Chief Technology Officer (CTO) for your business.
The 6 must-haves for hiring 'simply the best' CTO!
Download the Infographic to see what the 6 must have talents are that makes the best CTO for your business.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
Transform your business and increase revenue using custom software
About a quarter of our clients are ambitious mid-market companies who want our help to manage and drive custom software development either for internal systems or for ecommerce and revenue-generating phone apps or web apps. Sometimes they are struggling to get started, sometimes they are well underway but having all kinds of problems. Technical, commercial, people problems that can be very time consuming and energy sapping.
Custom software done well can be worth a huge amount of money and can significantly transform the value of a business. If it were easy then everyone would do it. That’s the fact! But why is it hard and how do you get it right…?
This short video explains why businesses should look to implement custom software projects to increase revenue and competitive edge.
Over the coming weeks we are creating a series of content pieces about CTOs, their role, how to find and recruit them and the invaluable benefits they provide to a business. All of which can be found on our CTO Knowledge Centre page here.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
Introduction to office automation with software robots
Look around an office and you will see plenty of people whose main work is dealing with systems and information. Data, requests and instructions comes in from emails and other sources, and go out similar ways. People handle information, organise it, fix it, share it, and ensure that different systems are up to date so that the right things happen.
In this short video, we discuss how this data handling can be replaced by office automation using software robots. A number of our clients are using this technology — and although there can be challenges the benefits and efficiencies far outweigh these.
Managing partner’s briefing on IT’s role in successful legal services
The context for IT in the legal sector is changing but the winners are those with, amongst other essentials, a defined IT strategy where IT spend is targeted at driving their business performance. Many of our IT Directors have wide experience in this sector and they have created this Briefing Document specifically for Managing Partners/CEOs in this sector.
IT's Role in Successful Legal Services
Read how IT has become a critical part of delivering legal services, and it will become even more so at an even faster pace.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
IT’s evolving role in an evolving legal sector
The context for IT in the legal sector is changing. Legal Aid cuts, new flexible legal service providers, referral fee bans, new ABS and the Big 4 accountancy firms form an increasing threat to the typical traditional mid-sized ‘partner-led’ legal firm.
A higher level of freelance and temporary legal professionals and growth in outsourcing creates new cost-pressures and new threats, but also new opportunities.
The winners are those with, amongst other essentials, a defined IT strategy where IT spend is targeted at driving their business performance. Firms must determine their vision; for example simply to use technology to drive automation and cost-savings; or to free up partners and equip them to leverage their personal relationships and to provide the highest levels of personal service.
How can IT make this happen? We see the following areas of focus for our clients:
Optimised Practice Management & Reporting – Smooth-running, effective and efficient processes are the bedrock of a well-run firm. Systems need to provide clarity on matter and client profitability, billing, WIP, expenses and cash management and to free up highly-paid professionals from excessive administration. Firms living with ageing Practice Management Systems need to untangle their processes, identify a clear Target Operating Model and select and implement a PMS to make that a reality.
Mobility – Some firms still need to move from a paper-based, solely office-based culture where senior staff assume IT is for junior staff! This means ensuring that the IT works well, for everyone, anywhere, anytime. It means good access to the full range of systems and collaboration tools for people working remotely or on the move. All staff need proper training and support and need a positive and enthusiastic attitude.
Sales & Client Engagement – Effective CRM and relationship nurturing initiatives go hand-in-hand. Successfully implementing these initiatives is partly about technology but also about process, training and behaviours. Changes to organisation and incentive structures may be required.
Cybersecurity, Risks & Compliance – Reputable law firms can easily lose their reputation as a result of technology-based fraud or IT catastrophe. Adoption of security standards and external audits can help drive programs of security and business continuity planning. Getting these right often involves getting a wide range of technology and process issues sorted out, so this can be good all-round. But there is no end to the money that can be spent, and a commercial and real-world attitude is needed.
Innovation – Most firms have very unremarkable websites, and are not taking advantage of on-line marketing or sufficiently leveraging client portals. Forward-looking organisations are already embarking on a journey to automate ‘low end’ activities using machine learning and artificial intelligence (AI). Mid-tier legal firms must be wary of another cycle of ‘IT industry hype’ but also need to avoid being left behind as gradual change can overtake them!
In every case the key issue is IT leadership and culture. IT must be at the top table; all senior leaders must be engaged with innovation, but there must be healthy scepticism and constant attention to ROI. The aim of IT must always be to deliver business outcomes.
IT needs to be owned by a confident, competent leader, well connected and influential around the firm. Good IT can significantly contribute to a unified and collaborative culture; and this can be self-reinforcing as more unified firms tend to adopt good IT more effectively.
Adoption and commitment are often the key factors in successful IT (and perhaps in success more broadly!) and strong IT leadership is the basic ingredient.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
Giving Back
Our Principals consistently tell us when they join that one reason they got out of a corporate environment and have decided to make a career as a Portfolio IT Director is because they want to give back. We work mostly with fast growing companies usually with revenues in excess of £5M, but that doesn’t stop our Principals wanting to do more, particularly with charitable organisations that would benefit from our skills. We do donate to charities, both as a business and as individuals, but money can sometimes be limiting. Giving our time and effort will, we believe, provide a far more significant difference.
This was why we got very excited when we found out about CITA, the Charity IT Association, because it is exactly what we were looking for; an organisation set up to help other Charities find people in the IT profession who could help them with IT Strategy or sometimes specific IT issues within their particular charity. It couldn’t have been a better fit and after talking with Tracey Phillipson of CITA, I was struck by how much alignment there was between the two of organisations. CITA enables charities to register on their website and explain why they need help. Volunteers, like our Principals, sign up and can view those requests and, if they want, take them up on the requirement and get in touch. Most of them want some help with IT Strategy or similar which is why the fit is so good for us.
Until now, Tracey explained, CITA has mostly concentrated on London because that was were most of the volunteers came from, but with our national coverage through our Principals, the opportunity to grow throughout the UK is immediate. This can only be a good thing. Freeman Clarke’s aim is to make a long-term commitment to CITA and provide an opportunity for our Principals to give back and for the Charities associated with CITA to benefit from this relationship.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
Interim CIO – What is the best way to hire one?
Companies often contact us because they want to hire an Interim Chief Information Officer (interim CIO) and they are looking for an interim CIO agency. The term CIO is often used by larger businesses, or by business owners who have a background in larger companies.
We generally use the term IT Director as this is has a broader meaning and covers a wider range of skills and backgrounds.
What is an Interim CIO?
An interim CIO will generally be a Board-level position and will normally have the following objectives:
a robust, secure, trouble-free infrastructure (eg example desktops, email, phones, network, file storage)
efficient line of business systems including processes, people and technology and everything needed to make this work well (eg training, data standards, documentation)
deliver digital initiatives which probably encompass customers, partners and suppliers
ensure compliance and risk management (eg GDPR, PCI, ISO27001).
Click here to download our CIO, CTO, and IT Director Job Description
The breadth of each of these points and the balance between them will depend very much on the nature of your business.
A larger company on multiple sites with large numbers of people might have complex infrastructure challenges. Poorly designed or poorly managed infrastructure can be expensive, unreliable, difficult to scale and insecure. But these issues are less prevalent than they used to be and infrastructure is often delivered over the cloud.
Some companies have complicated internal processes so automation, integration and reporting are vital to their success. An effective interim CIO can bring the necessary leadership and clarity to deliver major cost reductions and customer service improvements.
Digital initiatives can range from simple websites to full digital transformation programmes that fundamentally change how the business is presented to customers, how the business works internally, and how it works with suppliers and partners.
Compliance and risk challenges vary hugely for companies. For example, do you provide 24/7 critical services; do you manage highly sensitive data; do your clients impose stringent requirements on you; are you in a highly regulated industry? Some businesses have relative simple challenges in this area, others not.
The Right Interim CIO for Your Company’s Strategy
It is critical to establish the balance between the 4 points above and to attract an individual who has a track record in your critical areas.
Your company strategy may be to achieve lower price, better service or both. You may be looking to focus on internal efficiency, or excellent online experience. Or you may just need to overcome specific issues or risks. Before embarking on a search, you should untangle these points so you know the kind of interim CIO you’re looking for.
In addition, there are 2 other fundamental questions:
Are you looking for someone to envisage and lead major change, or to manage gradual improvements and fix specific issues?
Are you looking for someone to manage internal teams or external suppliers or both?
There are personality and behavioural differences between people who thrive in situations of major change and those who manage steadier improvements. Similarly, there is a great difference between people who build and enthuse internal teams, and those who manage external suppliers through contracts.
How to Hire an Interim CIO
There are a large number of agencies available for interim CIOs that can be found easily on the web. Senior professionals are very credible so we would advise careful preparation for interview and that you diligently take up references before making any offers.
We advise that you consider the following points in relation to interim CIOs:
they will rarely want to engage with your company’s culture and values, that is why they have chosen the interim lifestyle
they have little knowledge of, or interest in, the long-term viability or their work
once your project is complete they will immediately be seeking a full-time role elsewhere, and they will not be available to you at all
they may have arrangements with suppliers that they recommend.
We spend a huge amount of our time recruiting the very best CIOs in the business to form our elite team of “fractional CIOs”. Our team are committed to working for our clients for the long-term, on a flexible basis, so during intense periods they can spend the bulk of their time with a client, and during quieter periods then can have a lighter touch to keep the client’s IT on track.
When one of our fractional CIOs joins your senior team then they immerse themselves in your business and aim to be with you for the long-term. We’re completely independent and only recommend the best for you.
There is no lock in to our contracts at all and our clients simply work on a “pay as you go” basis, so our people have to make a difference every day.
We use the term IT Director rather than CIO as it is recognised more broadly in the UK. We use the term fractional rather than interim to emphasise between how we work over the disadvantages of an interim.
If you’d like to discuss in more detail how a fractional CIO can benefit your business, please get in touch via our contact us page or call 0203 020 1864.
AI and its impact on business
Companies from Amazon to Aviva are investing in future technology like Artificial Intelligence (AI), changing their businesses, and filing patents to protect their new ideas. They aim to radically change how they work, to redefine good service, and to massively reduce their costs. This is concerning for domestic, mid-sized businesses for whom this kind of innovation can feel out of reach.
This briefing aims to sort fact from fiction and to separate what’s hype from what’s happening. It also provides some real-world examples drawn from our own clients. We look at the opportunities this opens up for ambitious businesses, the accessibility of machine learning tools / AI services from the likes of Microsoft and IBM and automation of business processes.
To read the full article on what impact AI (Artificial Intelligence) is having on business click on the thumbnail below.
AI and its impact on business
Technology giants have an interest in convincing us that the future has already arrived and, most importantly, that they own it!
This article contains practical business examples of uses of Artificial Intelligence (AI) including machine learning, software robots, machine vision, automation and natural language processing. It discusses business strategy, especially for mid-market and SMEs, in particular mentioning legal and logistics, AI suppliers, and how to get started.
Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.
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