Despite its relative technological immaturity, decision makers across industries worldwide see blockchain’s lofty promise of operational efficiency and business opportunity as reason enough to invest time, money and effort in experimenting with distributed ledger technology across the enterprise.
Blockchain, a distributed ledger technology that promises improved trust, transparency and operational efficiency, is moving from an interesting talking point to a foundational element in modern enterprise computing strategy. That’s the key takeaway from our study of 3,000-plus decision makers across disciplines, geographies and industries, many of whom told us that blockchain experimentation has spread throughout their organizations, exceeding earlier expectations.
A majority of respondents said blockchain is “very important” to their industry (see Figure 1) and that they are beginning the necessary groundwork to gain the required familiarity with this maturing technology. They believe that blockchain is capable of boosting efficiency and germinating new revenue streams. Most estimate that blockchain investments will ultimately pay off through cost savings of 2.5%-plus, and revenue growth of 5% to 10% over the next few years.
Response base: 3,236 business decision makers
Beyond the economic gains, survey respondents named additional motivators for embracing blockchain technology and thinking, including the looming threat of disruption and the need to stay ahead of the competition.
Most respondents said their organizations have already defined a blockchain strategy and estimate their blockchain budgets amount to 2.5% to 10% of total organizational spending. Recognizing that blockchain is a clear paradigm shift, many organizations have established teams of six to 15 people dedicated to evangelizing the technology. (See our video on four must-haves to build a blockchain practice, below.) To fill the blockchain skills gap, they appear to be taking a multifaceted approach that includes traditional training and innovation labs.
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Change management is recognized as a key element to fostering the collaborative culture that lies at the heart of blockchain’s shared distributed infrastructure. Organizations are also weighing several options to integrating legacy systems with blockchain, including replacements, workarounds or hybrid approaches.
Given blockchain’s relative immaturity in an enterprise setting, most organizations are moving slowly but surely with proofs of concept and pilot projects that offer insight into its business value contribution and potential return on investment. (View our video below on how to select a blockchain use case and our recommendations on how to push forward.)
Organizations are still challenged to understand the numerous blockchain networks, and are thinking through the pluses and minuses of permissioned (private) vs. permissionless (public) blockchains. (See our video on how to pick the right blockchain.) Many respondents also report only a “medium” level of trust among blockchain ecosystem partners.
Respondents cited many external roadblocks to blockchain adoption, including privacy, security, scalability and regulatory issues. (See our video on confronting blockchain’s regulatory uncertainty.) As with previous technology cycles, many of these challenges are likely to be addressed over time. And as many survey participants indicated, the race to blockchain is a marathon, not a sprint.