Blockchain is making its entry into the enterprise landscape faster than we think. The global market size for blockchain technology1 or the distributed ledger technology is expected to grow to $ 23.3 billion by 2023 at a Compounded Annual Growth Rate (CAGR) of 80.9% during the 2018-23 period. As per an internal research by Wipro, digital technologies, such as RPA, AI and Chatbots, combined together, are forecast to grow at an average CAGR of 39.812 % from 2018-2023, i.e. the average CAGR of blockchain is twice that of the other three technologies combined, thus indicating a goldmine of opportunities in blockchain.
What is driving the need for enterprise wide adoption of blockchain?
The basic advantages that blockchain can provide organizations include decentralization of business operations, ability to proof transactions and data security.
A plethora of factors is driving large scale adoption of blockchain amongst enterprises (businesses generating >$1 billion USD in annual revenues), such as funding by venture capitalists (VCs), value chain creation to clients via variety of use cases, and the growing need to simplify processes by creating transparency, and reduce operational costs and transform customer experience (CX).
There are two additional factors that are contributing to the development of a wide range of use cases:
- Need for multi-party environment, i.e. an environment where there are multiple parties involved, such as clients, customers, vendors, contractors, suppliers etc.
- Need for establishing trust between multiple parties because there are variations in processes, systems, data flows, frequencies and modes of communication that add to business complexities.
Public Vs private blockchain
Private blockchain is gaining traction amongst enterprises as 40-60%3 of enterprises that have deployed blockchain till date have been on private network (internal to company). The key differences between public and private blockchain are that private blockchain offers the ability to control data and process based transactions, gives permissions for users to log onto a private cloud on a real time basis, enables consensus building and security via recording transactions, and optimizes performance due to the design of network. Additionally, with private blockchain a variety of use cases are possible and it also offers the scalability to accommodate a large number of users.
Basic cryptographic concepts applied in our use cases:
- Asymmetric key encryption: a method of public key cryptography using private and public keys
- Public key: a secret code assigned to an individual to decrypt messages or transactions
- Private key: a piece of asymmetric key used to encrypt messages or transactions
- Encryption: the process of encoding a message so that its meaning is not obvious to the users
- Decryption: the process of decoding an encrypted message
- Hashing: the process of converting plain text into cypher text or taking an input string of any length and giving out an output of a fixed length
Use cases of blockchain across industry verticals
Banking & Financial institutions (BFSI) apparently dominate blockchain development, as data suggests that around 50-90% of American and European banks are exploring blockchain and the financial services industry alone spends around $1-2 billion on blockchain4 on an annual basis.
According to Deloitte’s 2018 global blockchain survey, 53% of enterprises are likely to list use cases on supply chain, 51% on Internet of Things (IoT), 50% on digital identities, 44% on digital records and 40% on digital currencies.
Clearly, supply chain and digital identities figure amongst the top priorities.
Let us examine some areas where use cases in blockchain are being discussed at greater lengths today:
- Securing patient health records or any medical documentation
- Clinical trial test date records for secure distribution
- Anti-counterfeit measures taken to check spurious drugs and medicines
- International remittance involving cross border currency transfers
- Know Your Customer (KYC) involving customer databases and records
- Mortgage contract and counterparty risk tracking and management
Retail & CPG
- Loyalty program using token mechanism for reward allocation and redemption
- Automobile registry and ownership transfers
Logistics & SCM
- Vehicle analytics to track the movement of vehicles that fulfil the promise of last mile delivery to users and driver analytics to login their duty records.
- Source to Pay: managing vendor onboarding, vendor contracts, service agreements and many other aspects of end to end supply chain process
- Order to cash: This is a subset in the supply chain process for tracking goods movement and financial settlement for order closure
- Digital signatures: Allowing authenticity on transfer of documents Interparty payment and intellectual property rights and settlements across industries
- Asset warranty record keeping and service records management
We will now deep dive into the digital signature and order to cash (O2C) use cases.
A) Why this use case? It is the most common use case that industries and businesses would come across because of the simplicity envisaged in implementing it, ease of deployment and the envisaged cost effectiveness. Digital signatures are an inevitable piece for any enterprise irrespective of size and scale, as more and more enterprises focus on envisaging a higher return on investments.
B) What type of use case is this? Digital signatures available in the market can be broadly categorized into basic and advanced types. Image-based signature and click to sign are the examples of basic types, while the e-signatures based on cryptography are the advanced type. Basic type is definitely easy and cost effective, but suffers from authenticity and security flaws, while the advanced type is relatively expensive, but in both types, sensitive documents have to be fully accessible by the receiving parties for authenticity verification.
C) Where is this used? It finds immediate applicability across a host of industries, such as pharma, retail, CPG, manufacturing, banking, financial services, insurance etc.
D) When is this used? Used in cases of formalizing and approving legal contracts with the defined statement of work (SoW) by parties on either side. Digital signature, be it for contractual or for business approval, is a very generic use case finding greater acceptability.
E) Who are the users and whom does this target? The use case targets almost all corporate functions, such as finance-ac counting, HR, procurement, IT, legal, sales, customer service etc. with the users generally being the head of the particular function or units.
F) How does digital signature operate? With distributed ledger of records as a feature, document or any business artefacts can be securely shared on a private enterprise network and authentication of document/signatures can be verified by looking at the transaction record on ledger, and security standards can be defined around access rights for shared objects as read or modify types for the rightful owners. Further, documents/artefacts can be encrypted for secured sharing across networks allaying concerns of manipulation or tampering.
G) Benefits that can be realized using digital signatures: Digital signature led solutions based on distributed ledger technology can provide the benefits of implementing solu tions such as digital signatures with optimized cost and fewer control mecha nisms and can save at least 25% of time based efforts spent to formalize and agree upon contracts and legal documents.