Blockchain could form the underlying infrastructure of global supply chains by 2025, becoming ubiquitous in mainstream business in less than a decade, according to a new study.
The study, Does blockchain hold the key to a new age of supply chain transparency and trust? conducted by the Capgemini Research Institute predicts that blockchain will enter mainstream use in supply chains by 2025.
According to the report, currently only 3 per cent of organisations deploying blockchain do so at scale and 10 per cent have a pilot in place with 87 per cent of respondents reporting to be in the early stages of experimenting with the technology.
The report noted the top three drivers behind the current investments in blockchain which are cost saving at 89 per cent, enhanced traceability at 81 per cent and enhanced transparency at 79 per cent.
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It said blockchain enables information to be delivered securely, faster and more transparently.
The technology can be applied to critical supply chain functions, from tracking production to monitoring food-chains and ensuring regulatory compliance.
Leading organisations identified in the study are set to grow their blockchain investment by 30 per cent in the next three years.
Sudhir Pa, CTO for Financial Services at Capgemini said, “There are some really exciting use cases in the marketplace that are showing the benefits of blockchain for improving the supply chain, but blockchain is not a silver bullet solution for an organisation’s supply chain challenges.”
From the report, 92 per cent said the biggest challenge when it comes to the adoption of blockchain is establishing ROI, 80 per cent claim interoperability with legacy systems as a major operational challenge. Additionally, 82 per cent point to the security of transactions as inhibiting partner adoption of their blockchain applications, undermining blockchain’s status as a secure technology.
Pa noted, “Blockchain’s ROI has not yet been quantified, and business models and processes will need to be redesigned for its adoption. Effective partnerships are needed across the supply chain to build an ecosystem-based blockchain strategy, integrated with broader technology deployments, to ensure that it can realise its potential.”
In a previous report done by the Swinburne University of Technology, Capgemini found experimentation in blockchain will peak in 2020 as organisations explore proofs of concept and branch out from fintechs. According to the report, blockchain transformation will mature in 2025 as organisations undertake enterprise transformation and integration, establishing policies for privacy and data management.
The UK and France lead the way with at-scale and pilot implementation of Blockchain in Europe at 22 per cent and 17 per cent respectively. According to the report, the US is a frontrunner in terms of blockchain initiatives.