ROI (return on investment) has always been a crucial factor of consideration for businesses looking to invest in new technologies like blockchain.
Though the technology offers many functional benefits in itself, monetary benefits cannot be sidelined when the investment is hefty.
In this article, we will shed light on the ways businesses can use to measure ROI from their investment in blockchain development projects.
What is Blockchain ROI and its importance?
Blockchain ROI is the return received from an investment made in applications and software built on blockchain technology. Calculating ROI is important while considering the adoption of new technology because it involves hefty cost investment from businesses. Additionally, it also helps businesses in understanding the potential of the technology and its impact, if implemented on a larger scale. Another crucial factor related to the blockchain ROI is that it helps investors in evaluating risks associated with blockchain investments and makes informed decisions going forward.
Why is calculating blockchain ROI complicated?
Unlike calculating ROI from conventional projects, calculating blockchain ROI is challenging because:
- It majorly offers intangible benefits: blockchain works on improving efficiency. Thus, its advantages offer trust and transparency, which are difficult to quantify.
- It works on shared infrastructure: the majority of the time, blockchain networks include multiple stakeholders, making it difficult to calculate individual contribution and the ROI yielded.
- Uncertainty of regulations: Fluctuation in regulations severely impacts the long-term viability of blockchain projects.
Even though calculating blockchain ROI is complicated, it adds to some visible differences in the overall programming of the organization. Thus, many companies are moving towards asking a blockchain development company in India to quickly integrate it into their systems.
Ways to Assess ROI on Blockchain Initiatives
Evaluating ROI directly for projects funded by blockchain can be complex, considering the abstractness of the project as well as timelines in which they are expected to deliver results. But, still there are several metrics that can be used to assess its ROI.
- Reduced overall costs: Blockchain technologies, with the help of AI, can automate tasks, cut the additional costs of middlemen, improve efficiency, and even prevent fraud. For example, a supply chain company can use blockchain technology to thoroughly secure its process from start till end and prevent itself from the threat of receiving counterfeit products.
- Improved efficiency: Blockchain enhances the overall efficiency of the company by automating operations, reducing transaction time, and enhancing transparency. It is majorly beneficial for the finance and healthcare sector that deals heavily with data and turnaround time has to be minimal.
- Revenue generation capabilities: Blockchain can create unique revenue streams for the company while retaining customer loyalty. For example, a healthcare organization can easily use blockchain technology to share patients’ data without hindering their details, leading to improved diagnosis outcomes.
- Risk mitigation: With enhanced security features of blockchain, security risks related to breaches and lack of transparency can be easily mitigated, leading to a secure reputation and finances of the company.
Use of Blockchain ROI by Companies
Many companies have already implemented blockchain projects, with the help of an app development company, to yield benefits. Let us find out about those.
Walmart:
Walmart uses blockchain for tracking food products’ supply chain to ensure food safety and comply with food safety standards. Thereby saving huge costs and brand reputation.
Maersk:
Maerks is a shipping giant. It used a blockchain-based platform to streamline the shipping process. This resulted in faster shipping, considerably reduced paperwork, and improved customer satisfaction as a whole.
IBM:
IBM uses an innovative blockchain platform to manage food supplies transparently. It helped them in significantly reducing food wastage and considerably meeting food safety standards.
Just like these big giants, using blockchain technology to solve complex business problems and cutting down costs (if you see in detail), if you are also looking to build a blockchain-enabled platform, it will be a good idea to consider implementing one now with a skilled blockchain developer to yield optimum results.
What Makes Blockchain Worth the Investment?
If your business efficiency is dropping and you are unable to effectively address those challenges with traditional methods, blockchain should be your go-to solution. Industries/companies that should consider investing in blockchain technology are:
- Industries that have complex supply chains and greatly benefit from blockchain’s real-time tracking features.
- Financial institutions that deal internationally must invest in blockchain technology to reduce the overall time spent on transactions.
However, businesses must weigh these benefits and hire blockchain developers in India that can amplify their idea into a full-blown out project.
Conclusion,
There is no doubt that blockchain development offers immense benefits to businesses. However, measuring the blockchain ROI in terms of immediate monetary benefits is complex. As its integration into the business changes the fundamental flow of operations that lead to so many benefits, such as cost saving, time saving, eradicating chances of fraud, and overall streamlining operations to enhance productivity.
This is why experts are saying that it is a good idea to invest in blockchain and AI right now, leading to multiple companies looking forward to hire coders for streamlining their business operations.
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