RESEARCH REPORT

In brief

In brief

  • When done right, blockchain is about rethinking business models and relationships between partners and customers as a strategic change effort.
  • This framework helps decision-makers measure blockchain value drivers in specific steps, then map to organizational objectives.
  • Advantages across 13 industries validated at a multilateral session of global leaders at the World Economic Forum Annual Meeting 2019.


Being able to simplify complex processes while enabling innovation is the driving motivation for tech modernization. Today, organizations are trying to understand what role emerging technologies such as artificial intelligence (AI), the internet of things (IoT), immersive reality and even quantum computing will have in their business. High-growth organizations are investing aggressively and taking a distinct approach to innovation that is change oriented, outcome-led and disruption-minded. But with blockchain technology, even the leaders are challenged to realize the true value of the technology. Blockchain is a technology implemented to achieve a specific purpose, and not a goal in and of itself.

The Forum thought about what we wanted leaders to know next about this technology: How do I measure the value? How do I decide to invest in blockchain technology?

– SHEILA WARREN, World Economic Forum

World Economic Forum and Accenture global study:

550

Public and private-sector Leaders interviewed.

13

Core Global Industries identified as priorities.

79

Blockchain Projects deconstructed and examined.

Each organization may take the path to blockchain adoption at different times, but the steps along the way remain similar. In many organizations, the move along this path comes to a halt at some point between the proof of concept stage and production. The funding source may be a vital contributor. According to Accenture’s “Building Value with Blockchain” survey, more than 64 percent of blockchain initiatives are currently being funded by IT or research/innovation budgets—implying that the focus is on technology, rather than on aligning with the main areas of opportunity for the organization.

When asked what led organizations to invest in blockchain technology, 75 percent 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.

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. When building business cases to evaluate the blockchain opportunity, the value drivers can become the prime benefits or opportunities that organizations need to assess. We start with three key dimensions, and evaluate capabilities and value drivers for each:

Improving profitability and quality

Capabilities:

  • Automation
  • Control
  • Full Traceability
  • Security
  • Speed
  • Evidence of Tampering
Value Drivers:
  • Payments
  • Track and trace

Increasing transparency among parties

Capabilities:

  • Distributed
  • Holistic View
Value Drivers:
  • Data Sharing
  • Resiliency

Reinventing products and processes

Capabilities:

  • Decentralized Autonomous x
  • Enhanced identity
  • Tokenization and Digital Assets
Value Drivers:
  • Identity management
  • Marketplace creation

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The drivers 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.

Recommendations:

Take time to understand the technology

Each organization should have a senior leader responsible for understanding and tracking what is happening with the technology and within industries.

Align to strategic priorities

Moving first should be a result of identifying a competitive advantage to building the blockchain networks and using the technology first.

Set realistic expectations

Ensuring everyone is on the same page from the start, both within one’s organization but also with external partners, provides the greatest chance of overcoming impatience and unrealistic assumptions.

Remain agile in your approach

Though there may not be a clear value proposition now, it will be important for organizations to monitor and prepare if they are interested in potentially participating.

Think beyond your individual organization

In assessing value, it is important to consider network and scaling effects, particularly as enabled by collaboration.

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Fifty-one percent of respondents identified “missing out on developing new products/services” as the number-one expectation by not investing in blockchain quickly.

Sheila Warren

Head –  Blockchain and Distributed Ledger Technology, World Economic Forum


David Treat

Managing Director – Global Blockchain Lead


Justin Herzig

Sr. Principal, Lead – Global Blockchain Research

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