One of the technologies dominating the conversation for many businesses is blockchain. As we have written on our blog, considering blockchain technology is essential to any company investing in a new digital platform or retooling one. Its application promises to be both revolutionary and disruptive to nearly every industry. We urge businesses to formulate a strategy that considers their people, processes, and platforms when they incorporate blockchain.
By providing a secure electronic ledger that enables multiple parties to read and share data, businesses across many industries can apply blockchain to tackle inefficiencies, increase transparency, and prevent fraud. In finance, blockchain has been adopted to simplify cross-border transactions and stock trading. In healthcare, blockchain can facilitate the transfer of medical records across the healthcare ecosystem. The technology has also been used in humanitarian efforts to help refugees guard their identities. In the food industry, blockchain can help solve for food safety with the ability to quickly identify contaminated food supply, a risk that threatens millions of consumers worldwide.
Blockchain and the Agricultural Supply Chain
The pervasive problem around food safely and traceability in the agricultural supply chain is a viable application for blockchain. Wouldn’t it be great if we could identify all of the contaminated lettuce, avocados, or any other food items susceptible to a bacterial invasion and stop the distribution from landing in our shopping carts? Blockchain, being a secure digital ledger that maintains all history, has the potential to serve as the solution to the problem. With blockchain, companies could trace their food to its origin by viewing the immutable historical records of the supply chain journey. The giant retailer Walmart has partnered with IBM to track products through the supply chain via blockchain, from harvest to consumer.
Walmart decided to first launch the blockchain pilot by experimenting with mangoes. Prior to the new software solution, it could take more than six days to trace a mango slice to the farm it was harvested from. But with blockchain, the same activity took 2.2 seconds. The technology proved to be effective in providing the accounting trail for the fruit’s journey and also revealed the overall soil-to-shelf transport time, creating the opportunity to expedite the transport process and thus extend the fruit’s shelf life.
While blockchain provides the means of securely tracking history, it has limitations in accurately tracking the movement of non-digital products. In order to ensure reliable food traceability using blockchain, the system requires complete and honest participation from every touchpoint throughout the supply chain journey “meaning the blockchain will only be as strong as its weakest link.” Therefore, in order to promote the adoption of this technology and reach its full potential, IBM and Walmart need to carefully consider the new process for the people along the supply chain to input their information and include validation measures to ensure integrity.
Another food traceability use case was explored by Cargill, one of the world’s major agribusiness companies, by launching a farm-to-table campaign using blockchain to inform their consumers which farm their Thanksgiving turkey originated from. The motivation behind this application was less altruistic and more focused on PR by allowing the consumers to get to know the farmers that raised their turkey through stories and photos, establishing a personal connection to the origin of their holiday meal. There is no doubt that Cargill’s blockchain application brings forth value by increasing customer engagement and showcasing the company’s desire to innovate. But it does not take full advantage of the technology by limiting the level of transparency Cargill chooses to reveal to their customers.
Whether blockchain is a powerful technology that has the potential to alleviate pain points across many industries is no longer the argument, the technology has proven to facilitate collaboration and tracking of all kinds of transactions by providing security, transparency, and immutability. However, implementers must carefully assess whether blockchain is the right solution to their problem and avoid choosing blockchain for the sake of doing blockchain.
A Holistic Approach
At Moonshot, we’ve urged businesses to embrace blockchain to invest into the technologies of tomorrow. We believe it’s important to develop a strategy that reflects the way blockchain affects your people, processes, and platforms, like so:
How might we use blockchain to improve the internal and external user experience?
- How might blockchain simplify operations for the internal users?
- How should employees be trained to benefit and embrace the new solution?
- How might blockchain be used to bring additional value to your organization’s customers?
- What new opportunities can be identified with blockchain to address unmet needs or offer new services?
What should be evaluated to enable a new capability or alleviate an existing pain point?
- What existing processes should be modified to fit into the new technology solution?
- What new processes need to be designed in order to achieve your business goals?
- Will the process change achieve the overall desired savings?
What should be considered to identify if you have a viable blockchain use case?
- Do multiple parties need to access or view the data?
- Is there transfer of assets or exchange of data between multiple parties?
- Have the rules for sharing/viewing the information across all involved parties been defined and agreed upon?
- Have all the participants on the blockchain been identified?
Evaluating a blockchain solution holistically through the lens of people, processes, and platforms will help businesses validate the use case early on and achieve adoption while avoiding implementing a costly solution that they may not necessarily need.
What You Should Do Next
Deploying blockchain requires that a business develop a strategy that aligns blockchain across the enterprise. We suggest businesses map how blockchain might improve key processes, especially functions that touch customers and suppliers. To make blockchain more palatable and valuable, we suggest businesses focus on one core function, develop a prototype solution using blockchain, and then develop a blockchain solution. Tools such as Moonshot’s FUEL methodology are designed to help businesses get started in a way that manages risk and cost. Contact Moonshot. We are here to help.