Diversification in blockchain use cases across a wider variety of industries has caused investment in this technology to surge as business leaders begin to see beyond the “hype cycle,” according to Deloitte’s 2019 Global Blockchain Survey, released overnight.
As blockchain implementation continues to increase across financial services, its transformational importance is gaining momentum across multiple sectors, including technology, life sciences, media, telecommunications, and government.
The survey reveals that executives see blockchain as a more mature solution, while they’re taking pragmatic approaches toward investments and adoption.
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Eighty-three per cent of the 2019 blockchain-savvy survey respondents cite that their organisations see compelling use cases for blockchain and more than half reported that blockchain technology had become a critical priority for their organisation this year — a 10 per cent increase over last year.
The Deloitte research showed this momentum is translating into action, with 40 per cent reporting that they are willing to invest US$5 million or more in new blockchain initiatives over the next 12 months.
Moving from ‘will it work’ to ‘what will it disrupt.’
More organisations across a wider variety of sectors are expanding and diversifying their blockchain initiatives. The report found this occurring even as uncertainty remains about having the talent, strategic vision and experience to adopt blockchain solutions and fully realise the technology’s benefits.
Overall, survey respondents pointed to more distinct advantages than in 2018. For example, there was a 12 per cent increase in those planning to replace current systems of record with blockchain — which demonstrates the technology’s increasing maturity.
“The tone and terms of the debates around blockchain are shifting, according to this year’s study, incorporating more use cases and strategic visions of the future,” Deloitte Consulting principal and blockchain leader, Linda Pawczuk said.
“As the blockchain story continues to mature and begins a new chapter, we believe the question for executives is no longer ‘Will the technology work?’; but, ‘How can we make this technology work for us?'”
Blockchain gained prominence through its connection to bitcoin, which linked the technology to cryptocurrency. It was initially touted as a driver of a new distributed economy in which users of token-based currencies would cut traditional banks and brokers out of peer-to-peer and B2C transactions. But, much like frustrated cryptocurrency speculators, blockchain advocates were slow to show how it could be used to innovate business models impeding on the technology’s widespread adoption.
This year’s survey showed more optimism as the perception of blockchain is shifting on a global scale and it continues to gain traction and acceptance across a growing number of industries, as organisations look at blockchain more critically. Becoming potentially useful to a broader group of users, blockchain application can be deployed in situations that don’t require the use of a coin, including management of loyalty points, digitising physical assets and creating virtual wallets for finance management and reconciliation.
It is well known that facilitating B2B payments is an important use case of blockchain as the technology can simplify, secure, and expedite the payment process while reducing intermediary costs and risks, as previous Deloitte research has demonstrated. Less obvious use cases include blockchain’s potential to disrupt the consumer products industry.
Earlier Deloitte analysis points to blockchain helping consumer products industries create more value, achieve operational efficiencies, and enhance customer experience especially concerning tracking and monitoring of products and the flow of information, services, and money.
Perhaps the most interesting aspect of this year’s Deloitte’s Global Blockchain Survey surrounds how new blockchain initiatives differed between emerging disruptor companies and mature enterprise firms.
Deloitte targeted a sample of emerging disruptors — leaders at companies who built their business models around the technology. With more familiarity, emerging disruptors are leveraging blockchain to reinvent business models and reduce friction across organisations.
The research revealed emerging disruptors overwhelmingly cited business models and value chains (42 per cent) as the most significant advantage of blockchain, whereas enterprise respondents, were equally split between security/lower risk and business models/value chains (23 per cent for both).
Moreover, 71 per cent of enterprise organisations believe that blockchain provides greater security than conventional information technology solutions, while only 48 per cent of emerging disruptors feel the same.
When asked about barriers to adoption, enterprise organisations had little consensus. In contrast, the report showed emerging disruptors overwhelmingly — at 71 per cent — chose regulatory issues as the most significant barrier to blockchain adoption.
The survey found that executives have begun to ask challenging, granular, and increasingly pragmatic questions about blockchain technology that demonstrate an emerging awareness of its evolution.
Rob Massey, partner and global blockchain leader for Deloitte Tax said executives now must figure out how to make it work for their businesses, how to make the most of disruptive innovation in the space, and how to align within the entire blockchain ecosystem as it begins a new chapter.
“It’s critical for organisations to ask the questions that will help discern blockchain’s real value from myth and hype. We’re still in early stages of discovery for blockchain, and there are blind spots to explore as well as benefits,” Massey said.