The Truth about Blockchain: Separating the Hype From its Value-Creating Reality
While the global transaction platform was created a decade ago as the foundational technology for bitcoin, it’s usefulness extends well beyond its ties to the cryptocurrency phenomenon. In fact, blockchain’s ability to create highly-detailed, decentralized and immutable distributed ledgers can heighten efficiency and accelerate problem solving across any enterprise, from advertising to manufacturing.
While its bitcoin ties have afforded blockchain hype levels approaching celebrity status, blockchain is not a digital panacea. Other advanced technologies are more appropriate for many problems facing businesses today. Blockchain works best when augmenting and improving systems, as a time-, money- or experience-enhancing technology.
Despite the hype around what blockchain is and is not, it’s an exciting time for businesses looking to leverage this technology. Blockchain is no longer a coming attraction or even a proof of concept. It’s here, securely supporting the sharing of transactional data to improve efficiencies, reduce costs, and enhance regulatory compliance. Companies are completing successful pilot projects and in some cases, these are leading to scalable projects across multiple business functions moving from proofs of concepts to proving value.
Blockchain protects the integrity of their data and reinforces their commitment to quality
Solving Real Problems Today
Blockchain is supporting organizations across every industry, including the technology, pharmaceutical, manufacturing, and financial services sectors. One specific example of how blockchain is currently in use is Singapore Airlines’ (SIA) development of the first airline loyalty program based on blockchain technology. The KrisPay digital wallet enables loyalty members to instantly convert accrued miles into tokens that can be spent with numerous participating
The digital wallet not only makes it easier for SIA customers to use miles in their loyalty account, it allows SIA to onboard new partners and reconcile payments using blockchain technology. Because the blockchain system time-stamps every customer transaction in real-time, payments are easily reconciled, saving significant labor costs compared to its previous system.
An additional example is the use of blockchain technology in viticulture supply chain management. Pooley Wines in Tasmania, which produces premium wines, collects data points related to soil, climate, and temperature, among others, and stores them in a blockchain.
The cloud-based and tamper proof system helps Pooley Wines remain compliant with food safety expectations, their consumers understand how their wine was created, recreate the legacy products customers appreciate and even determine how vineyard resources are allocated. Overall, blockchain protects the integrity of their data and reinforces their commitment to quality.
Here are a few additional cases, among many others, now emerging from proof of concept to production:
• Tracing the path of aerospace parts. The manufacturing of goods involves a complex journey as parts are created, shipped, imported and exported across multiple international sites. By enabling near real-time visibility into parts location and status, manufacturers are increasing efficiency and transparency throughout the end-to-end process – with the added benefit of optimizing tax payments and inventory management.
• Streamlining device lifecycle management. One technology company has already generated more than $2 million in cost savings associated with blockchain-driven process enhancements, including asset tracking and management throughout product lifecycles that ultimately leads to recycling credits. For global enterprises with thousands of devices such as iPhones or laptops to manage, for example, blockchain can help significantly reduce time and costs associated with tracking these devices.
• Tracking the drug supply chain. Pharmaceutical manufacturers today are considering blockchain to help identify and trace certain prescription drugs as they are distributed in the United States. In doing so, it will help them more easily comply with the U.S. FDA Drug Supply Chain Security Act – designed to deter counterfeiting and optimize recalls -- when the law takes effect in two parts – 2019 and 2023.
These examples are proof that blockchain is much more than the next shiny new tech toy –businesses are unlocking real value, transparency, and efficiency today. The possibilities are vast, with organizations already exploring how blockchain can be applied to streamline tax methodologies associated with moving goods throughout and between companies – bringing new light to an error-prone and time-consuming process. And this is only the beginning. We expect to see rapid development of new real-world blockchain systems in the near term, as business leaders continue to evaluate how this emerging technology can augment current processes across their enterprise.
Successfully implementing blockchain requires an integrated, business-focused approach– one that starts with understanding a challenge, carefully prioritizing value-based use cases and configuring cloud-based tools, while leveraging the most impactful approach to drive and deliver on the promise of trusted commerce.