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Blockchain is moving beyond cryptocurrency, and it’s worth paying attention—especially since successful prototypes show that blockchain, also known as distributed ledger technology, will be transformative.
In fact, blockchain has the potential to fundamentally change how we share information, buy and sell things, interact with government, prove our identity, and even verify the authenticity of everything—from the food we eat to the medicine we take to who we say we are. It will also augment other advanced technologies: For example, supercharging both artificial intelligence and the Internet of Things. When you consider moving from the identity of humans to the identity of companies to connected devices to bots, the possibilities become truly endless.
But before racing to adopt blockchain, every CEO should be asking two basic questions: How might my industry and company use blockchain? And, should I be a first mover—or should I monitor, prepare, and then participate?
Let’s start with the first question. At its core, blockchain is a technology that creates a transparent and secure record of transactions, allows multiple parties to have a single source of truth in near-real time, and enables you to control access to the information, making it almost impossible to change the historical record. How can you capitalize on it? The answer is to treat it like any other business decision: determine the problem or opportunity it can address; consider whether it is a strategic priority for you; understand if there is a competitive advantage to using blockchain first, rather than other options; and calculate its return on investment.
Make no mistake, blockchain will be a game changer, but it is not the answer to every business opportunity or problem. Thinking of it as a goal is simply a misconception: Blockchain is a technology, not an outcome, and successfully implementing a solution with blockchain is less about technology capability and more about a company’s ability to work with other companies and create new business models. Blockchain should be used to address opportunities and problems that lack easier answers. Today, more often than not, other digital investments will offer faster returns and be more strategic in the short term—not to mention being much simpler to implement. But no large-scale digital transformation should be undertaken without considering how blockchain could be used in the future.
For many companies, the answer to the second question is to monitor, prepare, and participate. But this isn’t code for wait and watch. On the contrary, blockchain solutions deployed by your competitors first could pose serious strategic challenges to your business. You should identify a senior business leader who will be responsible for understanding and tracking what’s happening with blockchain and how it may be applied in your industry so you can make the most informed decisions and develop a clear strategy.
It is also critical to understand what it will take to execute when the time is right for blockchain. The technology opens the door to new ways of working, and to take full advantage, you’ll need sufficient influence to bring all the involved parties along in the chain, as well as team leaders with the mindset to conduct business in a new way.
Blockchain is complicated yet full of opportunity. We’ve been working with companies and industry consortiums to test the technology aimed at solving difficult problems in demanding environments. For example, we’ve seen prototypes securely track and trace medicines from manufacturers to consumers across countries, successfully process more than 100 million securities trades a day, and validate more than 900,000 kilograms of cocoa beans as free of slave labor.
At Accenture we’re partnering with the World Economic Forum on a digital identity pilot that uses biometrics and blockchain to address the public safety and cost challenges of travel, as international arrivals are predicted to grow to 1.8 billion by 2030.
The early results are promising: They’re proving blockchain’s ability to scale and to enhance efficiency, authentication, speed, transparency, accuracy, and trust. Looking forward, driven by the need to innovate continuously, companies will begin to move from piloting and experimenting with blockchain—and other advanced technologies like artificial intelligence—to ramping up usage at speed and scale for a competitive edge.
It’s clear blockchain is coming and businesses must be ready—know what ready means for you.
Julie Sweet is CEO of Accenture North America.