The vast majority of enterprises are struggling with the business case for blockchain, even among those already working with the distributed ledger technology. They are also struggling with interoperability issues, and, despite its promise of immutability, confidence in its security levels.
These are the conclusions from a new study by Capgemini, which polled 450 consumer, retail, and manufacturing businesses already engaged in some capacity with blockchain. Nevertheless, the consultancy concludes the technology will likely be ubiquitous by 2025, when it enters mainstream supply chains.
Just three per cent of organisations working with tblockchain are deploying it at scale, said Capgemini, with a further 10 per cent are in pilot mode. Capgemini groups these enterprises as ‘pacesetters’. Of those polled, the remaining 87 per cent are in the early stages of experimentation.
Capgemini has identified 24 use cases in its report, ranging from trading carbon credits, to managing supplier contracts and preventing counterfeit products. It is being used for tracing the production, provenance, and inventory of contracts, products and services in the retail, manufacturing and, consumer products industries.
Nestlé, Starbucks, Tyson Foods, and Unilever are each conducting blockchain trials, and are named among the pacesetters.
Over 60 per cent of pacesetter companies reckon blockchain is already transforming the way they collaborate with partners. On average, these companies are to grow their blockchain investments by 30 per cent in the next three years.
The UK, the US, and France have the biggest cohort of pacesetters in their ranks, the report concludes, with 22 per cent, 18 per cent, and 17 per cent of organisations from these countries working with blockchain at-scale or in pilot implementations.
The standard drivers behind investments in blockchain are cost savings (89 per cent), enhanced traceability (81 per cent), and increased transparency (79 per cent).
Nevertheless, 92 per cent of pacesetters said a clear return-on-investment remains the greatest challenge to adoption, and 80 per cent cite interoperability with legacy systems as a major operational challenge. Incredibly, given its promise of immutability, 82 per cent said the security of transactions inhibits adoption of blockchain applications.
Sudhir Pai, chief technology officer for financial services at Capgemini, said: “There are some really exciting use cases, but blockchain is not a silver bullet for an organisation’s supply chain challenges. ROI has not yet been quantified, and business models and processes will need to be redesigned for its adoption.”
Experimentation in blockchain will peak in 2020 and mature in 2025, according to a previous report from Capgemini and Swinburne University of Technology in Australia.
Professor Aleks Subic, deputy vice chancellor for research and development at Swinburne University said: “Blockchain technology will play an integral role in the digital transformation of supply chain channels for a wide range of industries in the near future.”
