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Assessing blockchain’s
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Worldwide spending on
blockchain solutions has
a forecast annual growth
rate (CAGR) of 76.0%,
reaching $12.4 billion in
2022
Sources: IDC. https://www.idc.com/getdoc.jsp?containerId=IDC_P37345 (accessed 3/5/19).

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INTRODUCTION

Since the digital era, organizations have been looking This white paper can help organizations by understanding the
for ways to improve their operating model through state of the blockchain environment and the path to adoption.
modernizing their technology infrastructure. Being able The analysis highlights the main advantages of the technology
to simplify complex processes while enabling innovation (broken down by industry), and the interviews shed light on
is the driving motivation for tech modernization. the benefits and challenges of blockchain technology. And for
Today, organizations are trying to understand what role organizations unsure where to begin or how to build a business
emerging technologies such as artificial intelligence case to assess the technology, the value framework shows
(AI), the internet of things (IoT), immersive reality and what blockchain enables and where one can expect to realize
even quantum computing will have in their business. The value from it. Though peer-to-peer, privacy-enabling payments
Fourth Industrial Revolution has arrived, and organizations are perhaps the best-known applications of blockchain
understand the need to innovate to prevent them from technology (e.g. Bitcoin), they are not the focus of this paper.
being disrupted. High-growth organizations are investing
This paper intends to help organizations build out a business
aggressively and taking a distinct approach to innovation
case after deciding that blockchain may be a good fit for
that is change-oriented, outcome-led and disruption-
a particular use-case. For those looking for guidance on
minded. But with blockchain technology, even the leaders
decision-making, see Part 1 of this series, “Blockchain Beyond
have challenges when realizing the true value of the
the Hype: A Practical Guide for Business Leaders”.
technology.

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CONTENTS
05 LANDSCAPE
17 EXAMPLE: FREIGHT BILL
AUDIT AND PAY 27 OBSTACLES AND
CHALLENGES

08 TOP ADVANTAGES
PER INDUSTRY 18 KEY DIMENSION 1:
IMPROVING
PRODUCTIVITY AND
30 DECISION-MAKER
CONSIDERATIONS

QUALITY

12 FROM USE-CASE TO
BUSINESS CASE 23 KEY DIMENSION 2:
INCREASING
TRANSPARENCY
32 RECOMMENDATIONS

AMONG PARTIES

13 THE BLOCKCHAIN
VALUE FRAMEWORK 25 KEY DIMENSION 3:
REINVENTING
PRODUCTS AND
PROCESSES
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LANDSCAPE

Each organization may take the path to Figure 1: Path to blockchain adoption
blockchain adoption at different times, but
the steps along the way remain similar. In Can we  Can we 
What value 
many organizations, the move along this path What is it? How can it could it Can it transform  create new 
be used? have? scale? industries / products &
comes to a halt at some point between the markets? markets?
proof of concept stage and production. The
funding source may be a vital contributor. SCALE
According to Accenture’s “Building Value
with Blockchain” survey, more than 64% of PRODUCTION
blockchain initiatives are currently being
funded by IT or research/innovation budgets PRE-PRODUCTION
– implying that the focus is on technology,
VERSION 1S VERSION 2S VERSION 3S
rather than on aligning with the main areas
of opportunity for the organization. PROOFS OF CONCEPT / VALUE

R&D

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However, organizations are certainly taking note of blockchain.

Worldwide spending on blockchain solutions is forecast to
be nearly $2.9 billion in 2019, before surging to $12.4
billion in 20221. According to a 2018 Constellation Research
survey, 67% of US companies
are evaluatingor implementing blockchain technology, with
a quarter already having projects underway or completed2.
In addition to the vast opportunity, this motivation is often
driven by sheer competitiveness. According to the survey,
57% of respondents investing in blockchain technology
agreed, or strongly agreed, that their organization should
adopt blockchain technology to remain competitive.
And of those who declared their blockchain investments,
68% are spending more than $1 million, with 27%
spending more than $10 million on blockchain activity.

Sources: (1) www.idc.com/getdoc.jsp?containerId=IDC_P37345 (accessed 3/5/19)

(2) www.constellationr.com/research/constellation-research-2018-digital-transformation-study (accessed 3/5/19)

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This activity is not limited to the private sector: A recent Overall, it appears that blockchain truly adds value in instances
World Economic Forum report showed that over 40 central where there is a need for tamper-evident
banks are researching distributed ledger technology for a ledgers along with decentralized control, particularly
variety of use-cases3. Elsewhere in the public sector, there where participants have an even hierarchy.
are 202 blockchain initiatives spanning 45 countries4.
When asked what led organizations to invest
in blockchain technology, 75% included their
organizational priority for innovation. The top three
areas of interest across surveyed industries were:
1. Full traceability of information on the blockchain;
2. The ability to check that data had not been tampered
with; and
3. The way the technology is distributed.
Notably, few organizations selected “new business products
or services” – which ranked last among the options for
investment. This suggests the current focus for organizations
is on improving existing products and services before
considering investing in new opportunities.

Sources: (3) www.weforum.org/whitepapers/central-banks-and-distributed-ledger-technology-how-are-central-banks- exploring-blockchain-today (accessed 3/5/19)

(4) oecd-opsi.org/wp-content/uploads/2018/06/Blockchains-Unchained-Slides.pdf (accessed 3/5/19).

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TOP ADVANTAGES
PER INDUSTRY
Automotive Banking Comms & Consumer Energy Healthcare High Tech Insurance Public Retail Software & Travelw Utilities
Media Goods & Service Platforms
Services

Full traceability for any

1 information on the blockchain 7 2 4 3 1 1 3 1 3 1 6 1 4

Ability to ensure no data

2 has been tampered 4 1 1 3 4 2 1 2 1 5 2 2 4

The way the technology

3 distributes the data 8 4 5 1 8 4 3 3 4 6 4 3 6

4 Smart contracts and automation 2 3 2 2 5 5 6 4 6 3 3 6 3

5 Increased speed and efficiency 3 6 2 5 3 7 7 7 2 4 5 5 1

6 Increased security 1 6 7 7 2 3 1 5 4 2 1 3 2

A holistic view with transparency

7 to all appropriate parties 5 5 6 6 5 6 5 5 6 7 7 7 7

New business products

8 or services 6 8 8 8 7 8 8 8 8 7 7 8 8

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THE EXECUTIVE PERSPECTIVE

Many of the executives overseeing large-scale and advanced
blockchain initiatives stress the technology’s value as a
data-sharing mechanism. However, it is challenging to
convene diverse operations and businesses to implement
Blockchain is a database architecture technology the technology across the trade chain. As a result, many
and, in particular, provides the ability for organizations choose to bring the smallest number of
necessary parties to the table before opening it up for
anyone to build applications on top of a common additional parties – with the hope that early use-cases will
infrastructure that could be reusable from one serve as an incentive for other parties to join in the future.
customer to the next. Once you’ve created this Due to their relationships and organizational structure,
shared source of truth through common infrastructure operators and market-wide
this technology, you also then create the collaboration platforms may be well placed to succeed in
this space.
ability for cross-organization workflows to be
dramatically simplified. The interviews highlighted the potential of the technology
to simplify and optimize complete value chains through the
sharing of simplified real-time data with increased efficiency.

PETER
Because the technology is intrinsically decentralized and
distributed, blockchain can help remove bottlenecks and
put pressure on low-value intermediaries to take up overdue

HIOM
technology and structural improvements or simply leave the
market altogether.

Deputy Chief Executive Officer of

Australian Securities Exchange (ASX)

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THE EXECUTIVE PERSPECTIVE

One additional theme uncovered in the interviews is the way
in which blockchain can stimulate innovation around both
products and processes. New opportunities to innovate
will arise as external data becomes more trustworthy and
improvements in automation, smart contracts and digital
identity5 and assets continue.
While this theme was prevalent among executives, only 17%
of survey respondents noted ‘new business products and
services’ as a top-three advantage of blockchain technology
There are lots of cases where people need – potentially indicating that the broader populations prioritize
common repositories, common systems of short-term gain while executives think longer term.
record, common directories and things where
you need coordination between multiple different
parties in a business ecosystem…
Sources: (5) www.weforum.org/whitepapers/inclusive-deployment-of-blockchain-for-supply-
chains-part-2-trustworthy- verification-of-digital-identities (accessed 3/5/19)

BRIAN
BEHLENDORF
Executive Director of Hyperledger (an umbrella project of
open-source blockchains and related tools hosted by the
Linux Foundation)

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FROM USE-CASE
TO BUSINESS CASE
So, your team has a use-case or two you are excited about.
If you are still making this decision, the World Economic
Forum’s Decision Tree may help to determine the feasibility of
blockchain for your idea6. The next step is assessing the value of
your blockchain use-case. This can effectively be done using the
Blockchain Value Framework and the four-step process detailed
on the following pages.
This prerequisite step is critical. It is important to carefully
consider whether blockchain is the best solution, relative to
other technologies or other digitization strategies. As noted in
“Blockchain Beyond the Hype”, blockchain may not be a viable
solution or it may not be the correct time to pursue
this avenue.

Sources: (6) www3.weforum.org/docs/48423_Whether_Blockchain_WP.pdf (accessed 3/5/19)

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THE BLOCKCHAIN
VALUE FRAMEWORK
This value driver framework aims to help organizations identify the value
of blockchain technology in their use-cases and build a corresponding
business case. As stated earlier, it is based on a global survey of 550
individuals across 13 industries, dozens of interviews with public-sector
leaders and private-sector chief executive officers, and an analysis of
79 blockchain projects.
The projects were evaluated across three main value dimensions:
1. Improving productivity and quality;
2. Increasing transparency among parties; and
3. Reinventing products and processes.

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When building business cases to evaluate the blockchain

opportunity, the value drivers can become the prime
benefits or opportunities that organizations need to
assess. These will differ for each use-case – some will be
realized in traditional metrics such as operating costs,
number of employees or increased revenue; in other
cases, opportunities will be measured in lives saved
or privacy rights enabled. It is nearly impossible to
accurately state the general impact of a use-case broadly,
but given this framework, organizations can identify
potential expected areas of value on which to focus within
their personalized business cases.
It is important to note that some of these value drivers
may be achieved through digitization that does not
involve blockchain. So the evaluation should take into
account blockchain’s costs relative to other solutions.

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Figure 2: Blockchain Value Framework Cheat Sheet The blockchain value framework in action
Improving Productivity
Increasing Reinventing 1. Understand the impact of the idea to the business. Each
KEY DIMENSIONS Transparency Products
and Quality
among Parties and Processes use-case should initially be assessed for the pain points
Automation
Self-validating network + smart contracts
Control
Control at the individual data
Distributed
No single-entry data ownership,
DAx (Decentraized Autonomous x)
Transparent, predefined rules mean
it addresses and/or the opportunities it creates. Next,
enable auto execution of business rules. element level, maximum flexibility
over what data is shared and how.
consensus applied to transactions
and shared access with no
new ventures may be created,
providing autonomous products/ those pain points and opportunities are prioritized. This
central point of failure. services through decentralized model.

Full Traceability Security Holistic view Enhanced identity

assessment of the current state captures an honest picture
Provinance and complete history
of all new data added is known.
Data can be encrypted and segregated
at the data element level, while also
Single source of truth – all
stakeholders see the same information
A combination of capabilities with
advancements in digital identity
of the present situation, and what matters most – without
CAPABILITIES enhancing overall data security. to which they have access. (e.g. biometrics) increase confidence
in, and improvement of, security thinking about how to solve issues, or which technology
and management of customer
and personal identity data. to use. This process reemphasizes the importance of the
Speed / efficiency
Can enable faster data transfer,
Evidence tampering
Underlying mathematics and
Tokenization and digital assets
Physical objects with verified unique
projects being managed and owned by the profit and loss
streamline tasks to ooptimize
process efficiency, particularly where
cryptography allow users with
appropriate access to verify
digital representation enable digital
ownership, management and transfer. (P&L) groups.
intermedaries have been removed. data has not been shared.

Identity Key questions: What are your pain points and areas for
Auditability Compliance Data Management Date Security Date Sharing Resilience Authentication
Management
opportunity? What matters most to your organization?
New / Enhanced
Process Marketplace
VALUE DRIVERS Ownership Payments Reconcilliation Transparency Trust Products and
Automation Creation
Services

Track and
Standardization New Enhanced Partnership
Trace

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2. Think through blockchain’s role. Blockchain use-cases Key questions: How do those characteristics map to
have the potential to transform the business across three the enabling capabilities? Check in again – are these priority
main dimensions: areas for your organization, and are these
enabling capabilities specific to blockchain when considered
• Improving productivity and quality
holistically?
• Increasing transparency among parties and
4. Identify where the value will be created. The value drivers
• Reinventing products and processes. Bucketing the
are where you’ll find your cost savings, your increased
pain points and opportunities into these three groups
revenue and your improved customer experience. Each
simplifies the next steps
driver touches on important components of the business
Key questions: Are there characteristics of blockchain that that are driven by technology – and when the time comes,
can help with the identified pain points/areas of opportunity? these value drivers become the basis for any business
How so, specifically? Are there other technologies that case.
can solve the same pain points/areas of opportunity more
Key questions: What are the value drivers that map to this
effectively or efficiently? Consider cost, risk and speed of
pain point / area of opportunity? How can we think about
implementation.
measuring or capturing this type of impact? Have we made
3. Use the Blockchain Value Framework Cheat Sheet to a strong case – both at the organization level and the
assist in moving from current-state assessment to ecosystem level?
future-state blockchain opportunity. Each dimension
includes the blockchain-enabling capabilities that – at
times singlehandedly, but often in conjunction with Consider the real-world example on the next page.
others – provide a solution to the pain point or present
areas of opportunity. Consider this as the validation that
blockchain is the correct technology to solve the current-
state priority and a first step for future development to
focus on.

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Billions of dollars a year are invoiced to organizations for Figure 3: How blockchain can help solve FBA&P issues
freight moves by truck, train, aircraft and ship. The freight bill
audit and pay (FBA&P) process involves matching invoices PAIN POINTS/AREAS
OF OPPORTUNITY
BLOCKCHAIN
SOLUTION
ENABLING
CAPABILITY
VALUE
DRIVER
against the services rendered prior to payment remittance.
Difficulty in managing
The shipping process starts with negotiating shipping rates, missing and changing
Having a single shared source of previously
agreed-upon information can ensure everyone is
rates, which leads to Holistic View Transparency
completing the purchase order, tracking the shipment, downstream invoicing
aligned on the rates and corresponding
terms and conditions.
problems
calculating and auditing the invoice, and finally paying the
carrier. Along this process, there are numerous pain points and Lack of visibility in
Being able to track the shipment in real time
provides all parties with increased confidence in Full
goods movement and Track & Trace
potential areas for discrepancies, each of which increases the shipment location
their goods and the ability to quickly react to any
unexpected disruptions.
Traceability

risk of mismanaging or incorrectly paying an invoice.

Inaccurate rates or
calculations being used Primary organization would no longer need
Blockchain offers an opportunity to solve or mitigate these for the invoice, often to trust the accuracy of the shippers’ data
caused by lack of visibility or calculations, such as the number of miles
issues. Consider the below example, which begins with or confusion on metrics travelled or time to complete the trip, as this
Holistic View Data Sharing
such as number of data can be automatically gathered and shared
the value chain, identifies the opportunity for blockchain miles travelled, time to with all parties on the blockchain.
complete the trip etc.
technology and its enabling capability, and then pinpoints
the value driver. This is a real-world example of a blockchain Using smart contracts and blockchain
technology, the level of effort to audit invoices
solution for an oil-and-gas company. Upon completing this Use of third-party auditors
is greatly reduced. Many activities, such as
reconciliation, are eliminated through having
that are costly and Automation Auditability
analysis, the team was able to build a business case to quantify lengthen the process
a single shared document, while others are
automated through smart contracts calculating
the value of each driver, calculating an expected reduced invoices based on agreed-upon rates and

freight spend of 5% (up to $100 million).

tracking data.

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KEY DIMENSION 1: BLOCKCHAIN VALUE FRAMEWORK DEFINITION

IMPROVING PRODUCTIVITY
AND QUALITY
Auditability
Given blockchain’s ability to provide a shared ledger of transactions to
all parties, with full traceability of any assets and associated activity,
organizations can not only cut their auditing costs but raise levels of
confidence in the data they are producing without having to manually
validate the data.
Example metric: Mistakes eliminated

Compliance
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, while streamlining administrative processes and
reducing costs. Processes involving manual checks for compliance that
currently take weeks can be accelerated through a distributed ledger
of all relevant information. Tying blockchain technology to emerging
technologies such as AI and the IoT can enable real-time data gathering
and processing to improve overall compliance.
Example metric: Risk mitigated

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Data Management
Blockchain can improve the management of data in three main areas:
1. Data provenance and accuracy through knowing more about digital
assets and accompanying data
2. Data integrity through access / authentication to the network and
easy identification of manipulation or tampering and
3. Data aggregation and organization, as blockchain enables the
seamless sharing of real-time data from a single data source
Example metric: Improved product forecasting

Data Security
According to new Accenture research, poor data security could cost
companies $5.2 trillion over the next five years – yet only 30%
of organizations are confident in their data security7. Blockchain
technology makes use of military-level cryptography that creates a
more secure environment for sharing and storing data, reducing the
risk of a data breach and limiting the damage should it occur.
Example metric: Data breaches prevented

Sources: (7) www.accenture.com/_acnmedia/Thought-Leadership-Assets/PDF/Accenture-

Securing-the-Digital-Economy- Reinventing-the-Internet-for-Trust.pdf (accessed 3/5/19)

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Ownership
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.
Example metric: Improved customer experience

Payments
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. With smart contracts, these payments can be automated, streamlining
the entire process – potentially removing unnecessary processing costs.
Example metric: Eliminated overpaying of invoices

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Process automation
Blockchain enables business processes to be executed
automatically via rules-based algorithms. 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.
Example metric: Resources reallocated Cryptocurrency and payment systems
Blockchain technology is perhaps most widely discussed
in the context of decentralized “cryptocurrencies” and

Reconciliation payment systems. While the core motivations for the use of
blockchain are similar – increased time and cost efficiency,
and increased transparency – the singular nature of the
Inaccurate or missing information or fragmented communication
use-case means that value may be evaluated outside of the
between multiple parties are often magnified year after year as
outlined value framework. Specifically, blockchain enables
unreconciled items get pushed forward.
peer-to-peer payments without banking intermediaries and
Additional complexities arise due to duplicate entries, post-event reduces the settlement times and costs associated with
changes from cancellations or returns, or conversion from analogue these payments. An organization may evaluate whether it
to digital inputs. Blockchain technology can significantly cut down the wants to take advantage of these properties for any number
overall costs in solving reconciliation while reducing errors and the of business reasons. If it proves valuable, the organization
accumulation of unreconciled items. can create a new system or make use of existing systems.
Example metric: Eliminated duplicate payments

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Standardization
For multiple organizations to 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.
All participants must agree to the set of rules by which they
will work together. This task is often daunting for many
industries that have minimal experience of driving this level
of agreement.
Example metric: Improved speed to market

Track and trace

The management and tracking of supply chains8 as it stands today is cumbersome,
costly and susceptible to human error and vulnerable to criminal activities.
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.
Example metric: Resource time saved

Sources: (8) www.weforum.org/whitepapers/inclusive-deployment-of-blockchain-for-supply-

chains-part-1-introduction (accessed 3/5/19)

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KEY DIMENSION 2: BLOCKCHAIN VALUE FRAMEWORK DEFINITION

INCREASING TRANSPARENCY
AMONG PARTIES
Data sharing
When retained in isolated systems – often fragmented and rarely shared between
organizations – data starts to lose its value and verifiability. Without blockchain
technology, a receiving organization must trust the validity of any data it receives
before being able to capture its value. With blockchain, however, trading partners can
share real-time data, but also the history of that data and any modifications to it.
Example metric: Enhanced value from data models

Resiliency
Organizations that manage and maintain on-site and central data systems are at risk
of malicious or incompetent employees, natural disasters or other events that can
irreparably destroy data. 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.
Example metric: Decreased downtime

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Transparency
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.
Example metric: Improved incident response rate

Trust
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.
Example metric: Mitigated business risk

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KEY DIMENSION 3: BLOCKCHAIN VALUE FRAMEWORK DEFINITION

REINVENTING PRODUCTS
AND PROCESSES
Authentication
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.
Example metric: Prevention of attacks by bad actors

Identity management
With more and more business transactions being conducted online, 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.
Example metric: Improved retention rate

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Marketplace creation
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.
Example metric: New markets created

New and enhanced products and services

The technology’s unique capabilities are creating the foundations to enhance
existing products and services and create new ones. New digital assets can exist
beyond the umbrella of one organization, company or government.
How organizations offer and manage those products and services is evolving, giving
power back to the creators and consumers. Early examples include digital rights
management and improved land titling.
Example metric: New product revenue

New and expanded partnerships

With the increased confidence in data afforded by blockchain, new partnerships
can be formed more easily. Many of these partnerships can have automated
components as well, through exploiting digital assets and smart contracts.
Example metric: New distribution channels

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OBSTACLES AND
CHALLENGES
Beware the hype Moving from proof of concept to
production requires stakeholder
The technology is commonly seen as a great opportunity and
buy-in
transformation enabler, but unrealistic expectations remain a
significant challenge. Survey respondents on average expected Proof of concept projects are often led by
a 24% return on investment on their evangelists, developed in R&D, and always in
early blockchain projects, but realized only a 10% return. controlled environments. Moving to production
On top of that, 42% of respondents expected a noticeable requires stakeholder buy-in and can be a
or significant brand improvement from simply announcing real challenge. As Peter Hiom, Deputy Chief
a blockchain project, with that total jumping to 87% Executive Officer of Australian Securities
upon delivering a blockchain project. It is important for Exchange (ASX), explains, helping stakeholders
organizations to carefully consider whether there are other to understand the technology and its benefits “is
technologies or approaches to digitization that may deliver an ongoing process and it’s proven to be hugely
on their objectives more effectively or efficiently. valuable. It’s enabled us to better understand the
needs of our customers and ensure we develop
functionality that will make their lives easier.”

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Working with others is difficult and

it is hard to capture ecosystem value
“The whole point of doing blockchain is it’s a team sport,” Christopher
G. McDaniel, President of the Institutes RiskStream Collaborative,
explains. “If you’re trying to do it on your own, maybe that’s OK from a
proof-of-concept standpoint, but if you ever want to get real production
value, you have to join with others. Otherwise there’s no point.” In order
to ensure that proof of concepts (POCs), standards and solutions are
adopted at industry scale, organizations must get better at working
together to create an environment of shared values and partner up to
solve additional obstacles. David Rutter, Founder and Managing Partner
of R3, says, “In the early days it was getting everyone to understand
the technology and its uses. Now it’s more like how the operational and
legal construct works with the new technology.”

Complex legacy systems and technical debt

Some 87% of survey respondents acknowledged that it is far more
challenging to undertake the implementation of a blockchain solution as
part of an existing digital transformation – especially when a substantial
amount of capital has already been spent on a legacy technology.
Alternative digital solutions may offer faster returns and be more
strategic in the short term, but organizations should evaluate whether
blockchain provides additional benefits in the longer term.

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Uncertainty exists
The industry has worked on many POCs and
experiments and has a reasonably good Prior to embarking on a blockchain project, 59% of
respondents stated they had no confidence that the project
understanding of what works. However, you can
would deliver a positive return on investment – and only 38%
prove that something works, but you of those who have implemented the technology developed
cannot prove that something will not fail. You believe a business case prior to investing. Many of those interviewed
it to be secure, but you cannot prove that it is hack- had doubts as to whether the technology was production-
proof. You know that there will be cost savings, ready – “limitations on blockchain technology” and “scalability
but you cannot foresee if there will be unexpected issues” were selected as the biggest challenges in adopting
blockchain. Though many technologists and service providers
costs. You believe there will be benefits, but you do classify the technology
not know if there will be unintended consequences. as v1.0 and ready for production, scepticism remains.
These lingering uncertainties are perhaps why there
It is important to keep in mind that blockchain is in its early
is still a reluctance to advance beyond POCs to actual stages and there are limitations as a result. Challenges exist
production usage. We need to summon stronger in fully addressing security, speed and efficiency, given the
management resolve to move beyond POCs nascency of the technology.

RAVI
MENON
Managing Director of the
Monetary Authority of Singapore

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DECISION-MAKER
CONSIDERATIONS
In interviews, the chief executive officers and organizational “With blockchain technology, there is a fundamental shift from
leaders have identified several major risks associated with centralized to decentralized architecture, which has a wide-
this move towards blockchain technology. ranging impact from technology architecture to business
processes to operating models,” Ravi Menon, Managing
Director of the Monetary Authority of Singapore, points out.
Lack of expertise and assessment “Such expertise cannot be developed overnight.”
for promising new technology
“New technology domains often demand a sort of literacy
with them… If your team isn’t understanding either the
51% of survey respondents identified ‘missing out on
technical side of how to build them, or the strategic side of
developing new products/services’ as the number
how to use them best, then you’re going to be playing catch
one expectation for if they do not invest in blockchain
up competitively for those who do,” says Brian Behlendorf,
technology in the near future. The other two most common
Executive Director at Hyperledger.
answers were missing out on speed/efficiency gains (23%)
and missing out on cost savings (15%).

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Missing early-mover value

and potential market share
Blockchain’s transformational architecture paves the way for
If they’re not ready, if they’re not experts in new business models and relationships. By not engaging with
the technology, an organization risks being left out of the room
this technology, then a new set of middlemen when impactful decisions are made. As David Rutter, Founder
are likely to step in, extracting their own and Managing Partner of R3, warns, “If they’re not looking at
monopoly rents for intermediating there. I blockchain now, and there are applications going live in their
don’t know how this is going to turn out, but industry, they could be disadvantaged in a pretty big way as
it seems to me a big risk is that you miss the they try to play catch-up.” For the opportunities where the time
is right, early movers will capture that advantage. According
opportunity again if you’re not ready for it
to Sunil Kaushal, Regional Chief Executive Officer, Standard
Chartered, “There is significant value that companies in
financial services can create by moving first, setting the stage
for new technologies and creating new business models. It is
not much different than other technology leaders like Google,
Amazon etc. where early movers defined new opportunities

CHRIS
and captured disproportionate market share.”

BALLINGER
Chief Executive Officer of Mobility Open Blockchain
Initiative (MOBI)

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RECOMMENDATIONS
Take time to understand the technology Set realistic expectations
It is important to think through the ways in which blockchain There are challenges to overcome – and it may take time to
may affect a given industry. In taking the time to understand realize the range of values that blockchain may bring. Like any
the characteristics and value drivers of blockchain, major business or organizational transformation, success is
organizations can assess what opportunities exist, but also dependent upon more than simply plugging in the technology
– and potentially more important – what threats may loom. or spinning up a blockchain node. Early movers may identify
The value driver framework can help build a business case incentives to build and operate the networks, accounting for
for specific projects, but creative thinking must drive the the investment and risk, while still developing an environment
consideration of greater impacts. Each organization should of shared value for all future participants. They may realize
have a senior leader responsible for understanding and incremental value at first, but network effects will magnify the
tracking what is happening with the technology and long-term impact.
within industries.
Even within an organization, the value flows only when the
operations, risk, finance etc. teams treat the blockchain
systems and accompanying data as the single source of truth.
Ensuring everyone is on the same page from the beginning,
both within one’s organization but also with external partners,
will provide the greatest chance of overcoming impatience and
unrealistic assumptions.

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Align to strategic priorities Remain agile in your approach

The answer on whether to be a first mover or to wait should be Though there may not be a clear value proposition now, it will
based on whether there is potential for significant added value be important for organizations to monitor and prepare if they
within the identified opportunities and pain points. For those are interested in potentially participating. This methodology
ready to move now, maintaining that use-case focus to identify gives organizations the ability to make informed decisions and
the problem or opportunity is vital. Moving first should be a develop and evolve their blockchain strategy.
result of identifying a competitive advantage to building the
blockchain networks and using the technology first. Different
strategies are correct for different organizations – for some, not
investing immediately is the correct response. Think beyond your individual organization
The decentralized nature of blockchain makes a transformation
from an isolated approach to end-to-end value-chain
Evaluate blockchain’s value integration within fragmented and complex environments
relative to other technologies more attainable. In fact, a lack of collaboration can undermine
– or even block – such transformation. In assessing value, it is
Blockchain is not a substitute for digitization and should not important to consider network and scaling effects, particularly
be treated as such. For many use-cases, other technologies as enabled by collaboration.
will be lower cost, lower risk, and implemented more quickly.
As such, organizations should do their research on whether
there are better-suited solutions for their pain points / areas of
opportunities before committing to blockchain.

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About Accenture Acknowledgements
Accenture is a leading global professional services company, The World Economic Forum and Accenture would like to
providing a broad range of services and solutions in strategy, acknowledge the valuable contributions of the following
consulting, digital, technology and operations. Combining people in developing this document.
unmatched experience and specialized skills across more than 40
industries and all business functions – underpinned by the world’s Contributing Authors
largest delivery network – Accenture works at the intersection World Economic Forum
of business and technology to help clients improve their Sheila Warren and Sumedha Deshmukh
performance and create sustainable value for their stakeholders.
With 459,000 people serving clients in more than 120 countries, Accenture Blockchain
Accenture drives innovation to improve the way the world works Simon Whitehouse, David Treat, and Alissa Worley
and lives. Accenture Research
Visit us at www.accenture.com Justin Herzig, Piotr Pietruszynski, Brandon Starr, Mike McCoy,
Christine Yiannakis, and Geoffrey Nolting

About Accenture Research Survey Participants

Accenture Research shapes trends and creates data driven 550 individuals across 13 industries
insights about the most pressing issues global organizations
face. Combining the power of innovative research techniques Interviewees
with a deep understanding of our clients’ industries, our team of Brian Behlendorf, Hyperledger Chris Ballinger, MOBI
300 researchers and analysts spans 20 countries and publishes Christopher McDaniel, RiskStream Collaborative
hundreds of reports, articles and points of view every year. Our
David Kenny, Nielsen
thought-provoking research — supported by proprietary data and
partnerships with leading organizations, such as MIT and Harvard David Rutter, R3
— guides our innovations and allows us to transform theories and Hanns-Christian Hanebeck, Truckl
fresh ideas into real-world solutions for our clients. Juan Villamil, UK Department for Work
and Pensions Peter Hiom, ASX
For more information, visit www.accenture.com/research
Premier David Burt, Bermuda
Ravi Menon, Monetary Authority of Singapore Sunil Kaushal,
Standard Chartered
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