Select a trustworthy blockchain service provider for a successful POC

Enterprises are finally getting serious about blockchain. Enterprise blockchain adoption has gone from being overhyped to being a technology that delivers genuine business value, with many ridiculous proofs of concept rightfully abandoned. In candid conversations with enterprise clients, we have found that the key ingredient for a successful partnership with service providers is trust; Exhibit 1 supports this, showing an existing relationship is the leading selection criterion. You need the technical expertise and requisite blockchain talent with battle scars, but, first and foremost, you need to be able to trust your service provider. Success with blockchain initiatives is not templatized, and each engagement comes with unique challenges to solve in partnership with your service provider.

Exhibit 1: Blockchain clients’ expectations are high, but they have the budget to match

Source: HFS Research, 2020

An existing relationship is the best way to ensure trust

Trust is at the core of blockchain technology; it also plays a key role for enterprise clients selecting a service provider. Change troubles many enterprise leaders, who have seen digital transformation efforts fail spectacularly with disastrous consequences. Business leaders’ lack of knowledge surrounding blockchain makes their concern understandable; they have to consider relying on a technology they don’t understand to strengthen core processes. This need for a trustworthy partner helps explain the importance of existing relationships, which 27% of respondents ranked as the number one priority.

An existing relationship often brings an abundance of trust; often, partners will have worked together on digital transformation efforts using other emerging technologies or delivering IT and business services, providing the client a level of confidence in the provider’s ability to understand their business and cultural context. Key individuals on the client side may already have relationships with members of the provider’s leadership team, giving them the confidence to address any challenges with a familiar face and making it much more appealing than partnering with an unknown entity.

Enterprise clients must also trust their provider’s ability to deliver reliable solutions

Emerging technology implementations are complex, and this is certainly the case with blockchain. Complexity enhances the need for a trusted partner, meaning enterprise clients need to trust their provider’s ability to deliver impressive technical expertise, extensive blockchain experience, and a large talent pool. This need is also supported by Exhibit 1, in which 22% of respondents ranked years of blockchain experience as the leading selection criterion and 14% ranked talented headcount. While technical expertise didn’t rank highly as the leading driver (8%), over half of respondents (51%) ranked it as a top-three selection criterion. It is equally important; however, enterprise clients can reasonably assume that most leading service providers have strong technical expertise. Technical capabilities are becoming a hygiene factor—not a differentiating factor—in blockchain service provider selection. Most leading service providers can deliver a POC, but getting to a production state separates the grown-ups from the kids.

Look beyond traditional talent models for blockchain-skilled individuals

The ongoing talent crisis facing every service provider is undeniable, but it’s even more significant when working with a technology as new and misunderstood as blockchain. Exhibit 2 shows that enterprises and service providers alike are stuck in a legacy mindset for talent acquisition, as 64% of respondents leverage in-house talent programs, while only 11% look toward alternative talent sources crowdsourcing. This mindset is also emblematic of the lack of trust with the gig economy, but shifting beyond traditional talent models is an area service providers looking to service blockchain clients could take the lead to further their blockchain expertise, and then demonstrate this to their clients as a reasonable alternative to the skill gaps.

Exhibit 2: Enterprises and service providers struggle to look beyond traditional talent models for blockchain

Source: HFS Research, 2020

The Bottom Line: Enterprise blockchain success is not just about technological superiority; it requires deep, trustworthy partnerships.

Every enterprise seeking an external service provider is likely to have slightly different selection criteria; however, there’s one recurring trend: trust. Enterprise clients are looking to service providers with whom they already have a relationship to guide them through the unknown blockchain minefield. Providers must also demonstrate essential blockchain experience and a rich talent strategy beyond technical know-how, critical elements to becoming a trusted partner for any enterprise client.