Eric Piscini is co-author of this blog.
Part 1 in the “Deloitte Blockchain Adoption” series
Amid the media frenzy surrounding Bitcoin a few years back, prescient technologists and business leaders recognized that the real story was not the scandals swirling around Silk Road or Mt. Gox, but rather Bitcoin’s technology endoskeleton, blockchain. They saw tremendous disruptive potential in this open, shared ledger platform. For example, public and private sector organizations might use it to share information selectively and securely with others, exchange assets, and proffer digital contracts. Individuals could use blockchain to manage their financial, medical, and legal records – a scenario in which blockchain might eventually replace banks, credit agencies, and other traditional intermediaries as the gatekeeper of trust and reputation.
Though at the time, few use cases for such opportunities were ready for prime time, the notion that blockchain had significant potential – not just for business but in society as a whole – began to gain traction. Today, blockchain is garnering headlines once again, this time for the vast ecosystem of cross-industry use cases emerging around it. Blockchain is now finding applications in every region and sector. For example:
- Europe’s largest shipping port, Rotterdam, has launched a research lab to explore the technology’s applications in logistics.
- Utilities in North America and Europe are using blockchain to trade energy futures and manage billing at electric vehicle charging stations.
- Blockchain is disrupting social media by giving users an opportunity to own and control their images and content.
- Blockchain consortiums – including the Enterprise Ethereum Alliance, Hyperledger Project, R3, and B3i – are developing an array of enterprise blockchain solutions.
This list is growing steadily as adopters take use cases and proofs of concept (PoCs) closer to production and industry segments experiment with different approaches for increasing blockchain’s scalability and scope. Indeed, the path to broad blockchain adoption looks strikingly well paved. Gartner projects that blockchain’s business value-add will grow to $176 billion by 2025. (For all references above, please see endnotes on the original article published by Deloitte.)
Yet there are several issues that warrant attention. With the proliferation of platforms and protocols in the marketplace today, no single solution has emerged as the clear winner; consequently, no technical or process standards are in place. Likewise, operational silos keep some companies from either developing clear business plans around blockchain or collaborating with ecosystem partners for mass adoption.
In the latest blockchain trend that will unfold over the next 18 to 24 months, expect to see more organizations push beyond these obstacles and turn initial use cases and PoCs into fully deployed production solutions. Though the tactics they use to achieve this goal may differ by sector and unique need, many will likely embrace three approaches that, together, comprise the latest blockchain trend:
- Focus blockchain development resources on use cases with a clear path to commercialization
- Push for standardization in technology, business processes, and talent skill sets
- Work to integrate and coordinate multiple blockchains within a value chain
Because we are only now coming to the end of a hot blockchain hype cycle, many people assume that enterprise blockchain adoption is further along than it actually is. In reality, it will take time and dedication to get to large-scale adoption. But when it does arrive, it will be anchored in the strategies, unique skill sets, and pioneering use cases currently emerging in areas such as trade, finance, cross-border payments, and reinsurance.
As these sectors lead in the coming months, blockchain’s future will follow.
Treading the path to commercialization
Regardless of industry bias, blockchain use cases that feature a clear path to commercialization often stand a better chance of reaching production. Why? Because in the minds of stakeholders and decision-makers, the words “potential ROI” can magically transform a nebulous tech concept into a scalable business opportunity.
By focusing available resources exclusively on those use cases and PoCs offering a path to commercialization, CIOs are offering clear incentives for stakeholders and partners, driving ROI in individual blockchain solutions, and potentially creating additional revenue or cost savings opportunities. In a way, they are also formalizing and legitimizing blockchain development strategies, both prerequisites for further refining project goals, setting timelines, and recruiting specialized talent.
By answering the following questions, CIOs can assess the commercial potential of their blockchain use cases:
- How does this use case enable our organization’s strategic objectives over the next five years?
- What does my implementation roadmap look like? Moreover, how can I design that roadmap to take use cases into full production and maximize their ROI?
- What specialized skillsets will I need to drive this commercialization strategy? Where can I find talent who can bring technical insight and commercialization experience to initiatives?
- Is IT prepared to work across the enterprise (and externally with consortium partners) to build PoCs that deliver business value?
One final point to keep in mind: Blockchain use cases do not necessarily need to be industry-specific or broadly scoped to have commercial potential. In the coming months, as the trend toward mass adoption progresses, expect to see more use cases emerge that focus on enterprise-specific applications that meet unique value-chain issues across organizations. If these use cases offer potential revenue opportunities down the road – think licensing, for example – all the better.
Part 2 in this series will look at the progress being made on standardization.
Make your blockchain a competitive advantage; read The Blockchain Solution for insights.
Contact Darshini Dalal at firstname.lastname@example.org.
This article originally appeared on Deloitte Insights and is republished by permission.