Blockchain as a concept was brought into scientific discourse as early as the 1990s, but the first implementation took close to 19 years when the first blockchain as the public ledger for transactions made bitcoin. It’s merely been 10 years since the technology was actually first put into practical use and since then enterprises have evaluated over the years how this particular technology can be beneficial if included into the existing enterprise setup.
Blockchain is bound to slowly differentiate from the term ‘Bitcoin’ as enterprise adoption increases, and as it showcases its versatility through the most appropriate and practical use cases that benefit enterprises. While the blockchain technology market has grown by 86% from 2017-2019 with the present split of the revenue tending towards solutions and products by 54-56%; one of the major contributors to the growth of blockchain products and solutions are the Blockchain as a Service providers who are primarily cloud technology vendors. We can assume that the growth of cloud technology will propel blockchain as well since cloud-based products clocked a growth rate of 44-46% in 2020 and organizations across the globe have started investing heavily in cloud computing post the COVID-19 pandemic.
While it took two decades for the first practical use of blockchain, the pandemic has accelerated the growth of blockchain as a technology, particularly for enterprise adoption since security and real-time connectedness were the two central themes that enterprises were struggling with during the pandemic. Blockchain provides the solution to these two; the challenge, however, lies in getting the industry participants to align to this shared future vision.
The pandemic has presented us with the opportunity to lay down the foundation of enterprise blockchain as organizations across the globe have had to rethink their business models. Incorporating blockchain into their DNA would help them not only save costs, and increase efficiency but also create revenue generating opportunities in the coming decade.
Accelerating blockchain adoption within enterprises
Identifying use case by prioritizing the strategy for blockchain implementation
Enterprises need to, first and foremost, understand what exactly the technology does and how it can benefit their organizations.
The pace of blockchain adoption will severely be affected by whether organizations are looking toward the technology from a long term or a short-term perspective. An organization looking to incorporate blockchain to provide security and real-time connectedness in the short run would probably opt for a more generalized blockchain solution where blockchain is complementing another technology, which in turn is the focal technology of the solution. The organizations that are looking to adopt it for a long-term strategy would focus highly on use case-specific solutions.
We can possibly attribute the massive growth in cloud-based blockchain solutions to organizations looking for short-term gains from the solution or possibly testing the feasibility of the solution before they implement blockchain in their enterprise DNA to a point from which they cannot retract. The longer-term solutions would replace earlier enterprise systems or platforms altogether with blockchain while being specific to certain processes which will be altered from their present state altogether.
The process or the use case thus becomes extremely important as blockchain has to be customized or utilized to suit that very process or use case. This in turn requires expertise, not only from the perspective of technology, but also the domain/process within which blockchain is being utilized. This also makes it extremely important for the organization to choose the right mix of service providers, and technology vendors and platforms tailored to the need of the pilot or the identified use case. BaaS providers selling cloud services and enterprise software are perhaps the most favorable due to the ease of integrating blockchain to the existing enterprise platforms/systems. While majority of the BaaS and service providers have a partner ecosystem which include blockchain platforms, the rise of start-ups in niche spaces have given rise to heightened innovation which will lead to differentiation and specialization of use cases that would replace earlier existing processes or systems within these organizations.
Organizations have begun deploying pilot projects to test the technology before they can actually finalize on a future roadmap for blockchain. Almost 60% pilot projects are in the Banking, Financial Services and Insurance Industry owing to the trust and security that the technology brings along with it.
The selection of the correct use case is extremely important as this can accelerate the adoption of the technology through a mix of stakeholder awareness and value realization from the blockchain pilots. Trading ecosystem is perhaps the most advanced in terms of product readiness when it concerns blockchain, followed by clearing and settlement and interbank payments. All the three use cases incorporate transparency and auditability as their core benefit while utilizing automation/process optimization as a multiplier when it concerns cost reduction. Majority of the ready use cases either result in cost reduction or enhancing stakeholder experience; of these two, the former has taken precedence.
COVID-19 has accelerated the pace of use case adoption in other industries such as Telecom/Media and Transportation & Travel. Wipro Enterprise Operations Transformation has built two solutions; one specifically tends to supply chain inefficiencies in the market for the manufacturing sector and the other focuses on the order management capability within order-to-cash process for telecom and technology. Blockchain would be greatly beneficial for the government and healthcare sectors, especially when it concerns Identity Management, which is another use case where Wipro has advanced capabilities.
Creating an ecosystem for blockchain implementation
The other aspect and probably a far greater factor for blockchain adoption is the creation of an ecosystem. The biggest bottleneck when it concerns an implementation is the ability to persuade stakeholders to transition their processes from an existing setup to a distributed ledger, which is going to ease security, privacy and trust between the stakeholders.
While convincing the stakeholders is one aspect that has hindered blockchain adoption due to the availability of alternatives which are further in the product lifecycle and hence mature; the other is the dichotomy of choosing to place data or customer journey as the focal point for the creation of the blockchain system. Data has clearly gained precedence over customer journey, at least from the perspective of the most ready use cases but it would be fair to consider that the core requirement of the Banking, Financial Services and Insurance space, where 60% of these pilots have been implemented, place data security as their primary need. When a blockchain pilot is implemented in a consumer-facing environment such as retail, consumer products and the likes, customer journey will take precedence over data as the focal point.
Creating an ecosystem requires the cohort to also establish a framework and guidelines to ensure transparency in functioning within these cohorts. As the scale of blockchain implementations grows, we will obviously be looking at disputes, both between parties within the ecosystem as well as parties outside.
What will be crucial is how the participants within the ecosystem resolve disputes. Presently we have 4 dispute resolution mechanisms which include the following:
If the dispute can still not be resolved, then either party can choose to settle the dispute via litigation bearing in mind the lengthy appeals process, cost, and the fact that court might not be sophisticated enough to understand the technology involved.
Paradoxical, odd and the inversed nature of enterprise blockchain
Blockchain is a part of a set of technologies that will show massive growth in the coming years. Enterprises are bound to experiment with technologies that are slightly more mature in nature such as RPA and AI, and will venture into full-fledged blockchain deployments probably much later.
Blockchain, together with IoT, can provide an interconnected and secure network, which will act as a multiplier to every complementary technology that is utilized within this network. This is a paradox since enterprises are focused on developing technologies which can be utilized more from the perspective of a point solution rather than creating an ecosystem for overall process efficiency and stakeholder experience. That said, the minimum requirement of having a two-party setup shows that the benefits of blockchain will grow with the number of participants joining that particular ecosystem.
Blockchain, an exciting technology that is going to bridge the gap in terms of data security and transparency across horizontals and the verticals of an ecosystem, remains an unpolished figment in the minds of enterprise stakeholders. To increase the adoption of blockchain, the benefits of this invisible technology has to be exhibited to the enterprise stakeholders so that they can leverage its power within their organization.
Wipro is a leader in global blockchain services, has 17+ patents over the span of 10 years, and has created an ecosystem of 25+ partners, which is a requisite for the success of any blockchain implementation. To know more about how we can accelerate your enterprise blockchain journey, connect with Dhiraj.firstname.lastname@example.org
Practice Lead, Enterprise Operations Transformation
Dhiraj brings in 11 years of experience in digital technologies such as Blockchain, Artificial Intelligence and Internet of Things and is responsible for diagnosis, designing, development and delivery of transforming technologies across multiple business domains.
Assistant Manager, Enterprise Operations Transformation
Kunjal has 6+ years of experience across advertising, media & PR covering Brand Management, Strategic Marketing, ATL/BTL/Digital Advertising and Trade Marketing. He has hands-on experience in Trade Marketing and Brand Strategy across various brands.