Here’s What Sheila Warren And David Treat Think About Blockchain!
A couple of years back, blockchain or distributed ledger technology (DLT) was known as the hot ticket, but recently limelight has receded to the background. Is there any business value to be discovered in blockchain?
“Yes, but only if done correctly, blockchain technology is all about reinventing business ideas, reestablishing relationships between companies and between companies and customers, ” the authors, David Treat of Accenture, Sheila Warren of WEF, point out.
“Through this alignment, companies can figure out whether its worth to invest in blockchain for their distinct situation and then make decisions on whether they should invest in the technology – considering that blockchain is just one choice for enterprises considering digitization.”
The WEF and Accenture report is an analysis of 550 executives, along with a survey of seventy-nine blockchain projects. A dispute with blockchain is the unrealistic expectations that have developed around it, Warren and Treat observe.
“Survey respondents on an average expected a 24% return on investment on their first blockchain projects but received only a ten percent return. Moreover, 42% of respondents predicted a noticeable or prominent brand enhancement from just declaring a blockchain project, with total jumping to 87% upon delivering a blockchain project.”
It’s still challenging to connect blockchain to the business. Before commencing on a blockchain project, 59% of respondents said they had zero confidence that this project would bring a positive return on investment – and only 38% of those who have implemented the technology developed a business case before investing, according to Warren and Treat.
Many executives feared whether the technology was ready for production –“scalability issues” and “limitations on blockchain technology” were the considerable challenges in implementing blockchain.
Mounting it from proof of concept to production is another stumbling block the authors state. “Moving to production requires shareholder buy-in and can be a real challenge.” That’s because blockchain needs to be a team effort.
“To ensure that proof of standards, solutions, concepts, are implemented at industry scale, enterprises should be better at working collectively to create an environment of shared values and partner up to solve additional obstacles.”
Technical debt and complex legacy systems also get in the way of blockchain. At least 87% of the executives “accepted that it is challenging to commence the implementation of the blockchain as part of an existing electronic transformation – specifically when a huge amount of capital has already been spent on traditional technology.
Alternative digital solutions may offer faster returns and be more strategic in the short term, but organizations should evaluate whether blockchain provides additional benefits in the longer term.”
Warren & Treat suggests the following to introduce blockchain in the business. To experts of previous enterprise technology deployments – such as cloud or big data analytics – much of this will probably sound familiar:
Have ample time to analyze this technology
“Think through how blockchain may affect a given industry,” the authors state. “Creative thinking must drive consideration of huge impacts. Each organization must have a leader liable for analyzing and tracking what is happening with the technology and within industries.”
Set practical Goals
“Success does not rely on spinning up a blockchain node or plugging in the technology,” Warren and Treat state that everyone across the organization needs to get involved in the effort.
Coordinate with strategic priorities
Develop a use case that zeros in on the problem or opportunity blockchain are addressing.
Assess its value relative to other technologies
“Blockchain is not a replacement for digitization and should not be considered as one. For various use-cases, other technologies will be lower cost, lower risk, and implemented more quickly.”
Anticipate above your organization
“The decentralized nature of blockchain transforms an isolated approach to end-to-end value-chain integration within fragmented and complex environments.”