There has been no shortage of promises about blockchain (or distributed ledger technology), but actual returns to date have been uncertain. A recent survey of 550 executives, along with analysis of 79 blockchain projects from the World Economic Forum (WEF) and Accenture Research, finds blockchain has yet to deliver on an enterprise scale. Executives expected a 24% return on investment on early blockchain projects, but only saw a 10% return, the analysis shows.
Blockchain proponents need to pinpoint key areas of the business where progress can be measured and documented. The survey's authors, Sheila Warren of WEF and David Treat of Accenture, have a few suggestions as to where they can start, and cite examples of key metrics that may fit:
Auditability: mistakes eliminated. Blockchain offers a shared ledger of transactions with full traceability of any assets and associated activity, enabling organizations to "raise levels of confidence in the data they are producing without having to manually validate the data."
Compliance: risk mitigated. "Compliance brings with it a great deal of risk and damage if mismanaged. Knowing that blockchain can't be tampered with can provide increased confidence in the data."
Data management: improved product forecasting. "Blockchain can improve the management of data in data provenance and accuracy through knowing more about digital assets and accompanying data."
Data security: data breaches prevented. "Blockchain technology makes use of military-level cryptography."
Ownership: improved customer experience. "Blockchain technology can enable true digital ownership of both real-world goods and digital assets by creating improved intellectual property and personalized data profiles, without the need to check the history or current state of the item."
Payments: eliminated overpaying of invoices. "Blockchain technology can draw on the single shared data source to ensure payments are accurate and remove the need to manually audit and track down payments."
Process automation: resources reallocated. "Organizations can use blockchain to look for improvements in efficiency, cost savings and increased worker productivity and retention by shifting the focus of the workforce to one of jobs with higher engagement and satisfaction."
Reconciliation: eliminated duplicate payments. "Blockchain technology can significantly cut down the overall costs in solving reconciliation while reducing errors and the accumulation of unreconciled items."
Standardization: improved speed to market. In a blockchain network, multiple organizations "work together in a blockchain system, they must agree on common terms, business logic and business flow as they share access to the same data and apply the same smart contract-enabled business logic."
Track and trace: resource time saved. "Distributed ledger technology allows trading organizations to view each step of the supply-chain process. Each party can verify the current state and trail of the products without depending upon direct communication with others in the network."
Data sharing: enhanced value from data models. "With blockchain, however, trading partners can share real-time data, but also the history of that data and any modifications to it."
Resiliency: decreased downtime. "Existing in a distributed form, blockchain creates a highly resilient network with multiple shared copies of the data, which mitigates the risk of an isolated attack or incident."
Transparency: improved incident response rate. "Blockchain technologies' distributed ledger allows all designated parties to view the data in real time. With unlimited transparency, organizations can identify opportunities, improve decision-making and track and trace the outcome of those decisions."
Trust: mitigated business risk. "Trust is being challenged in the digital world, with organizations unable to verify basic essentials. Blockchain helps enable and even automate trust through cryptographically securing information and providing transparency to the state and trail of data."
Authentication: prevention of attacks by bad actors. "A core function of blockchain technology is its public and private key cryptography, which can serve as a basis for authenticating one user across multiple networks, resulting in increased confidence in the overall network and participants."
Identity management: improved retention rate. "It no longer makes sense to rely upon physical documents as the only means of establishing the identity of a user or object. Blockchain technology enables enhanced characteristics in how digital identity is both managed and used, while moving beyond the limitations of being operated by one institution."
Marketplace creation: new markets created. "Blockchain technology improves confidence in products and services in the marketplace, while also using a shared ledger, smart contracts and digital assets to facilitate real time peer-to-peer transactions."
New and enhanced products and services: new product revenue. "New digital assets can exist beyond the umbrella of one organization, company or government."
New and expanded partnerships: new distribution channels. "Many of these partnerships can have automated components as well, through exploiting digital assets and smart contracts."