Blockchain for enterprises—hype vs. reality? What’s new in 2018?

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I believe that the world has moved on from “What is blockchain?” to “How do I develop new business using DLTs?”

Over the past few weeks, I had various opportunities to participate and present on the latest updates in blockchain and distributed ledger technologies (DLTs). One of these opportunities was in the San Francisco Bay Area, organized by DLA Piper, University of Swinburne, CSIRO, with representations from VCs and start-ups. The other one I recall was in Hyderabad, organized by NASSCOM, with participation from the Everest Group, banks, start-ups, and tech companies.

This is how I see the evolution for blockchain in the enterprise:

  • For obvious reasons and in order to keep crypto-currencies outside the equation, we shall look at the use of distributed ledger as a terminology for enterprises, differentiating it from blockchain. This means, different approaches to consensus algorithms, membership services, smart contracts, etc., compared to that of blockchain.
  • DLT waves—From 2018 onward we expect to see an uptake in deploying blockchain solutions at scale. To put it in perspective, I see three waves of DLTs:
  • Wave 1: Technology and education: This wave relates to the efforts to understand the technology and its implications. This has been ongoing for the past three–five years and will continue to mature, especially for enterprises:
    • Blockchain-as-a-Service (BaaS), which has been provided by many large tech companies such as IBM, Microsoft, etc. is an example. Full-stack offerings of BaaS are available on these companies’ cloud platforms.
    • Several issues around performance, security, reliability of networks, etc. have been resolved. An extensive modular design approach has been adopted by technologies such as Hyper Ledger and, particularly, Fabric 1.0.

In this wave, systems integrators had only small roles to play, mostly on education and branding. However, with BaaS providers and Fabric 1.0 maturity, app/IT/cloud/API-related engagements are likely to expand. This wave’s ownership will mostly remain within the CIO organization.

  • Wave 2: Business scenarios and use cases: Over the past 18–24 months, there has been a realization that DLT should not be a solution looking for problems, but it should be applied to right business scenarios and use cases. Examples are:
    • Movement from a single use case (like payments) to intra and intercompany scenarios like “trade finance,” “farm-to-fork,” etc.
      • Moving from one predominant industry like financial services to many other industries and cross-industries
      • More business-focused consortia such as R3 in banking or B3i in insurance

In this wave, systems integrators realized a chance to undertake consultative, domain-led approaches and engagements. This mostly starts through ideation workshops, then use cases, process maps, solution architecture, etc. Ownership of this wave will remain with business units.

  • Wave 3 Transformation: While wave 1 and wave 2 continue to make inroads, wave 3 is expected to run for the next four years and entirely focuses on enterprise transformation. This wave includes:
    • DLT deployment, post deployment, operations, and maintenance
    • Developing DLT frontends: web and mobile, user experience design, and redefining business process and rules
    • APIs and enterprise integration with backend systems such as SAP, Oracle, etc.
    • Completely new approach toward data management, transaction management, user authentication, and authorization areas

Through this wave, we will see new business models, transformation in regulation, privacy, and changes to user adoption. For a systems integrator this is truly a transformation opportunity where DLT is only a component of the entire ecosystem.

  • Areas of excitement: As a system integrator company, our obvious question is “what will excite my clients when it comes to blockchain?” This is particularly true for clients who have invested in capabilities, joining consortia, and running pilot scenarios. Here are a few areas and questions that resonate well with our clients:
    • How are you going to redesign business process to suit DLTs? And how do you track and measure its adoption?
    • How do you form the DLT ecosystem? On what basis? Both business and technology ecosystems? What’s the operating model for such an ecosystem to function?
    • How are you planning to overcome the deployment barriers of DLT solutions when it comes to regulation, compliance, security, and particularly talent?
    • How do you plan to integrate blockchain or DLT with other digital disruptions—particularly IoT and AI?
    • How do you plan to track business case and ROI for your investments DLTs?
  • Capgemini use cases:  Capgemini has a long list of client examples where we have conversations or are piloting DLT and blockchain opportunities across all three waves, with primary focus on being a DLT transformation partner. A few examples:
    • Financial Services: KYC, trade finance, cross border payments, securities, KYB (Know your billing for insurance)
    • Pharmaceutical: Efficacy-based payment using Ethereum. Patients, doctors, pharmaceutical and insurance companies are coming together through smart contracts, patient drug reaction data, and insurance payments associated with it.
    • Telecom: Replacing SIM cards with smart contracts; the ability to switch to plans that suites a particular geography in real time; transparency and user experience drivers; and Ethereum on Azure.
    • Electronics: Operational efficiencies in a recall process: the ability to recall parts and understand product batch, where it has been produced, who are the suppliers, etc.
    • Oil and Gas: Smart retail distribution and QoS, oil company, fleet operator, retail fuel station, weather have linked IoT to Blockchain and used it in order to manage payments
    • Airlines Supply Chain: Airlines with suppliers, shipping companies tracking parts, developed in Hyper Ledger Fabric
    • Automotive: Vehicle blockchain to track such things as vehicle ownership and transfers from the manufacturer to dealers and customers. Parts blockchain could monitor and track parts authenticity and work in conjunction with vehicle blockchain
    • Retail (luxury): Customer certification of authenticity, warranty, etc. could be built through start-up everledger.

I believe that the world has moved on from “What is blockchain?” to “How do I develop new business using DLTs?” As a technology, it has switched from being called disruptive to “foundational.”  We might still be a few years away from visualizing its full potential, but industry is moving fast. At Capgemini, we focus on orchestration and integration opportunities, taking a holistic approach for DLT along with cloud, API, digital and channels, business process, and consulting capabilities.

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