Blockchain is falling out of favor in supply chain circles, according to research from Gartner, which found that only 19 percent of surveyed executives described the technology as “important” and just 9 percent have devoted funds to pursue related projects. Gartner’s findings indicate that blockchain initiatives for the supply chain will suffer from “fatigue” by 2023 due in large part of a lack of compelling use cases.
Gartner senior principal research analyst Alex Pradhan noted that use cases focusing on product and material authentication, traceability and trust largely haven’t advanced past the pilot stage. And it’s not just the lack of commonly held standards in the blockchain arena that’s one of the key obstacles, but also, as Pradhan said, “a misunderstanding of how blockchain could, or should, actually help the supply chain.”
The blockchain landscape is shifting quickly, a reality that’s creating confusion for companies interested in the technology but at a loss as to where to start, Pradhan said. What’s more, she added, “Current creations offered by solution providers are complicated hybrids of conventional blockchain technologies. This adds more complexity and confusion, making it that much harder for companies to identify appropriate supply chain use cases.”
Deloitte’s 2019 Global Blockchain Survey paints a more nuanced picture, noting that “even leaders wary of tech-based solutions have come to see the larger transformational importance of the technology.” Whereas Gartner’s survey pool showed an overall lack of movement on blockchain, 53 percent of Deloitte’s respondents described the tech as a “critical priority” for their organizations. Deloitte polled 1,386 senior-level leaders across 12 countries as well as decision-makers at 31 “blockchain emerging disruptors.”
Blockchain investment levels seem to be maintaining their course, as Deloitte found that plans to devote $5 million or more to these projects ticked up 1 percent year over year. What’s more, the fact that respondents listed diversifying use cases for blockchain is a signification of the technology’s maturation, Deloitte said.
Business executives harbor contrasting thoughts and attitudes about blockchain and its capabilities.
Eighty-three percent said their company’s executive team believes blockchain has a compelling business case. Eighty-six percent believe the technology is highly scalable and will achieve mainstream adoption, while 56 percent see blockchain as disruptive to their industry. However, a significant number of skeptics question blockchain’s future, as 43 percent agreed with the technology’s characterization as “overhyped.”
The research firm takes these varying points of view as a positive rather than a negative.
“As blockchain is expected to continue along a traditional path of maturation and self-discovery, signs of dissonance and caution may reflect the technology’s health as it likely evolves into a more grounded solution,” the report said.
Deloitte used a pair of analogies to illustrate blockchain’s status in the tech world today. When 3-D printing technology arrived on the scene years ago, it was regarded as a curiosity and novelty, but now it’s replaced or augmented manufacturing methodologies at several mainstream companies. And the idea of ridesharing popularized by Uber and Lyft revolves around the time-tested concepts of getting a ride and paying for it, but its true innovation is, Deloitte said, disrupting how people receive this service, or “democratization of access.”
Similarly, blockchain—underpinned by cryptography and data transactions, which have been around for some time—isn’t necessarily doing anything wildly new but “what is fresh is the disruptive potential that emerging disruptors are driving in the way organizations get things done,” which could be described as the “democratization of trust,” the report said.
Blockchain still has a way to go before it’s transforming the enterprise and supply chains, but Deloitte believes forward-thinking companies will find creative and meaningful ways to apply it to their businesses.
“We believe executives should no longer ask a single question about blockchain, but, rather, a broad set of questions reflecting the role blockchain can play within their organizations,” Linda Pawczuk, Deloitte Consulting LLP principal and Deloitte consulting leader for blockchain and cryptocurrency, concluded.