What is Blockchain Project Management?
Blockchain in project management has become a buzzword over the past few years. The blockchain is an incorruptible digital ledger that can be used to securely record transactions across many computers so that no individual frottage of records can be altered without getting noticed. Blockchain project management involves managing a project using blockchain tools and understanding how it works. A blockchain project manager is a person who manages blockchain projects by applying the principles of blockchain to projects. Let us understand what project management blockchain is, its various uses, and how you can use it to manage your projects more efficiently.
Who is a Blockchain Project Manager?
Project managers create and manage projects to successfully complete specified goals and/or objectives with the help of various project management techniques and tools. The projects can be business-related or in the case of technology, they can be cryptocurrencies. This project manager uses blockchain to manage and track the project’s records, transactions, and participants. A project manager can also create smart contracts and or use blockchain platforms.
The above lecture is a part of AIMS’ online project management courses and the online MBA project management distance education program.
History of Blockchain and Project Management:
While blockchains are most associated with Bitcoin, more companies are looking at the project management capabilities that this type of management offers. What’s interesting is that banks, such as the Russian-owned VEB bank, are looking into blockchain project management in how they run their financial services to their customers. When Bitcoin was introduced in 2009, it was demonstrated that the cryptocurrency used a blockchain management system that allows for a decentralized system while still controlling the spread of information. However, traditional blockchain procedures as developed by Bitcoin for example will actually disrupt the flow of information that most companies and blockchain project managers have spent years building up.
How Does Blockchain Work in Project Management?
A blockchain consists of several points in which people involved in the project can communicate with others. All communication along with transactions are recorded for full transparency. In addition, budgetary matters can be better handled as all purchases or transfers are seen by the participants. For the project manager, it creates a system that allows for input, but also oversight that is more efficient compared to traditional project management systems.
How Blockchain Changes Project Management?
- At first, it may seem like this system of management is quite similar to other means of running projects. The necessary people are assigned, the project is given pre-set goals, all the external factors are handled in the same general manner, and the 5 project management phases and stages are followed as per the procedure. The various points of entry mean that the project management itself is not a top-down procedure, but rather one that pulls involvement from all parties with full transparency.
- The difference is that all communication flows through the input of the assigned staff and no one else. This means that with everything going through so few people and all communications being secured, the efficiency of blockchain project management is increased. That may seem counter-intuitive at first, but the limitations imposed by this form of project management provide substantial benefits.
Benefits of Blockchain in Project Management:
The first benefit derived from blockchain project management is security. Because of how information is spread through the system, the data transfer is safe because of the difficulty that outsiders have in breaking into the effective project management process. This includes cloud storage systems that will be far more robust and secure than earlier versions.
1. Reduces Risks:
Because the project manager is directly involved, it helps to reduce risk, correct mistakes, and keep projects focused.
2. Efficiency:
Because those involved must transmit through the blockchain system, it limits the conversation to only matters that apply to the project itself.
3. Project Manager:
By using blockchain technology, the project manager can keep things on track. They will have access to all information and can adjust accordingly when things change. The blockchain itself can handle all transactions to make them more efficient.
How Does Blockchain Help in Project Management?
One of the most prominent features of blockchain is its immutability. That is, data stored on the blockchain is permanent and is not changeable. In fact, it is virtually impossible to alter the data once it is recorded on the blockchain, even if the data is tampered with. This immutability and security make it ideal for managing sensitive data such as financial records, medical records, land records, and legal documents. Project managers can track the progress of their projects using blockchain, eliminating fraud, and ensuring data integrity. They can also create smart contracts to automate certain tasks across the project, such as project payments to different parties.
Uses of Blockchain in Project Management:
Project management is an essential service that helps organizations create and manage projects, with the goal of successfully completing them. In this regard, blockchain projects have a number of advantages over traditional project management. They include:
1. Reduced Costs:
Using blockchain technology can reduce project costs by eliminating middlemen and contractors.
2. Improved Transparency:
The project manager can use blockchain to create transparency and traceability which is often overlooked in traditional project management.
3. Reduced Delays:
Blockchain technology ensures that all project data is recorded, immutable, and unalterable so that the project manager gets complete information about the progress of the project.
Types of Blockchain for Project Management:
The most common project management applications use Blockchain technology to improve the project’s efficiency and security. In fact, some companies use blockchain technology to implement project management. These types of blockchains are:
1. Public Blockchains:
Public blockchains are open to everyone who wishes to join the network. As such, anyone can view or edit the information stored on the network.
2. Private Blockchains:
Private blockchains are used to store sensitive information such as financial records, medical records, and legal documents. Hence, only authorized participants can access and edit the data.
3. Consortial Blockchains:
A consortial blockchain is a hybrid of a private and public blockchain. The data is stored on a public blockchain while the data processing and settlement happens on a private blockchain.
4. Self-Organizing Blockchains:
Self-organizing blockchains use algorithms to ensure that the data is accurately stored, validated, and distributed.
5. Smart Contracts:
These are computer programs that are executed automatically when a preprogrammed condition is met.
Conclusion:
- Effective blockchain project management offers a new way for businesses to get important projects done on time, with greater efficiency, and less cost compared to traditional management practices. However, it does take time to transform into a blockchain system which will have issues before it is fully in place.
- The popularity of blockchain technology has grown exponentially in recent years, and it is expected to continue growing in the coming years. One of the main advantages of using blockchain is that it eliminates the need for a middleman, such as a bank or a contractor, to perform certain functions.
- Project managers can use this technology to improve the efficiency of their projects and save time. Moreover, they can use blockchain technology to create transparency, traceability, and immutability. This growth in popularity has led to an increase in the number of blockchain project management tools and services. However, it can be difficult for project managers to choose which tools are best for their projects, programs, or project portfolio management.
- The above discussion can help us find different ways to implement a blockchain project management tool, and how you can choose the best option for your organization.