Something to Consider June 2018 – Are We Really Ready for Blockchain?
Has there been a single business conference or digital transformation article in the last couple of years that hasn’t included the mesmerising potential of blockchain as the future of trusted transactions and relationships? But does it match up to all the hype?
Separating the realities of distributed ledger technology, such as blockchain, from its beginnings as the foundation of Bitcoin and other cryptocurrencies is no easy task. However, early trials with the technology to support business processes have been encouraging, with blockchain offering the potential to cement business networks with greater speed, transparency and accountability.
There are potential use-cases in improving the trust and integrity of supply chains, for example to give retailer and consumer visibility to how coffee beans have been sourced and how much farmers are being paid. This would enable consumers to act on their own ethical and environmental beliefs at the point of purchase.
In addition to supply chain visibility, “smart contracts” offer the potential to eliminate any trading ambiguity and the overhead of billing and payments. So, it sounds like there is a brave new world out there.
However, not everything is rosy in the “blockchain garden”. There are still many issues around data privacy and security, immutability, governance of individual blockchain applications and lack of concrete benefits. Even the trust and auditability issues are not as clear as supporters sometimes claim, illustrated in part by the frequent hacks and theft from cryptocurrency exchanges, based on this technology. Academics also refer to the ‘interface to reality’ challenge of applying blockchain to physical, rather than digital, assets.
Just because we COULD use blockchain for a business process, does not necessarily mean that we SHOULD. We are still very much in the innovator/early adoption stages, which is prime time for venture capital investment but businesses wishing to ‘bet the farm’ need to have a clear view of the practical benefits and challenges.
Supply Management magazine has recently published an article with a balanced view on this topic, that is surprisingly uncommon in these excitable times, and addresses the hype and reality. You can check out the full report here
Our ‘Something To Consider’ snippets are framed as small, digestible, ‘dashes of insight’ around the pillars of what we define as “World Class Finance” – Process Optimization, Financial Control and Compliance, and Risk Assurance, all underpinned by technology enablement and integration.