Go ahead, right now search Google using the phrase “blockchain and supply chain” and see what comes up.
Within 55 seconds, the search engine will produce a list of 37,200,000 results. While I did not review each result – I do after all have a deadline for this article, my point is that there is an abundance of information and promise regarding the positive impact of blockchain on a global supply chain practice.
What there is a shortage of, however, are actual examples of the practical materialization or realization of this promise from the standpoint of measurable outcomes.
The Digital Mirage
Blockchain clearly has the potential to improve the way organizations conduct transactions and track items within the supply chain. Yet this research indicates that only 1 percent of responding organizations are currently using blockchain in their supply chain operations, and nearly 50 percent of organizations are neither using nor exploring the use of this technology.
- The Implications of Blockchain in Supply Chain, June 22nd, 2018, My Purchasing Center
In late October I had the opportunity to moderate four expert panel discussions over three days in two different cities. While one panel was on diversity in the workforce, and the other on the transformation of legal procurement practices, the other two were on collaboration and communication in the digital age. More specifically, how do you convert the digital promise into a digital reality that has a real versus conceptual impact on the bottom line?
Just as an aside, and in between cities, I had the opportunity to have breakfast one-on-one with one of the industry’s top analysts from Forrester in which we talked about everything from M&A’s to, you guessed it, digital transformation.
What was interesting is that, whether it is during a quiet breakfast conversation or facilitating dialogue in front of an audience of 300, the general belief is the same; digital, and more specific to this article, blockchain is like the weather. Something you spend a good deal of time discussing, but not doing anything about it.
When The Numbers Don’t Add Up
Once again, and as pointed out in the My Purchasing Center article, everyone is pretty well in agreement with the belief that blockchain has the potential to have a significant and positive impact on an organization’s supply chain practice. Especially in areas of transparency. A Deloitte study asserted that because Blockchain provides “all parties within a respective supply chain with access to the same information,” it would not only potentially reduce “communication or transfer data errors,” but help to “reduce” fraud.
Despite the clear articulation of the benefits, only 1 percent of the responding companies to the APQC survey that the My Purchasing Article references use blockchain in their supply chain operations? Something doesn’t add up!
The question is, why? Particularly, if you believe in the blockchain promise, is the industry slow to embrace the technology? Of even greater importance, what has to be done to accelerate the progress from recognition to realization?
It’s About People Not Technology
Organizations also recognize that adopting blockchain has its barriers. The most widely held concern is finding people with the necessary skills to use blockchain technology.
– The Implications of Blockchain in Supply Chain, June 22nd, 2018, My Purchasing Center
Going back to my recent panel discussions, and the need for better collaboration and communication, it is clear that we have been paying too much attention to the technology of blockchain, rather than its impact on the workforce, i.e., people.
In this regard, a story that Duncan Jones shared with me over breakfast stands out.
Before joining the analyst world, Duncan worked with a company that provided integrated software for manufacturing companies. As we all know, Duncan’s understanding and knowledge regarding technology is considerable, so when he suggested making improvements to a process that an employee was doing manually, he was surprised that his proposed automation idea met with some resistance. Apparently, and as long as the employee had a stack of papers to enter every day, he held the belief that his job was safe. Think about that one for a moment.
The greatest obstacle to adopting blockchain is not so much about technology, but about people. Whether there is a concern regarding job security, or a paucity of expertise unless organizations begin to formulate strategies that are inclusive of all stakeholders, then it is unlikely that any initiative will get off the ground or gain meaningful traction.
So where are you with your blockchain strategy, and with whom are you talking about turning its promise into reality? Your answer to these questions will determine whether you achieve and maintain a competitive advantage in an increasingly competitive digital market, or fall behind and be forced to play catch-up down the road.