At the Business Blockchain Summit in London recently, Dale Chrystie, FedEx’s blockchain strategist, invoked the words of FedEx founder Frederick W. Smith, who said that in business there were no prizes coming second: to stay ahead, business must innovate.
Today, enterprises are flooded with new ideas to replace the legacy and increasingly obsolete systems with new cloud-based technology. Startups and technologyà‚ behemothsà‚ are leading the charge with ideas built around artificial intelligence, machine learning, IoT and, of course, blockchain.à‚ Welcome to industry 4.0 – the smart factory of the future.
Blockchain is the bridge between the sensors that track the movement of products along manufacturing and supply chains (IoT) and analyses of the resulting data. This is the data that will inform the manufacture and movement of products tomorrow. Data is theà‚ feed-stockà‚ of tomorrow’s factories; blockchain is the technology for data, the accuracy and security of which are pivotal to this new eco-system.
Most trading organisations are active in two supply chains: physical and financial. The financial supply chain has the advantage of having being born digital while the physical one remains analogue and therefore significantly slower. According to IBM and shipping giant Maersk, 25 per cent of shipping containers carrying about 80 per cent of goods used by consumers each day, are late by one-to-three days on average.
Furthermore, the administration cost of moving goods around is about 20 per cent of the cost. This just proves how far we still have to go and the opportunities to be harvested by new technologies such as blockchain. Not surprisingly, a majority of executives in large enterprises globally consider blockchain to be one of their key strategic opportunities in the next 12-24 months, particularly in their supply chain or in sustainability.
Repsol’s investment in Finboot proves this point. As a customer, Spanish energy giant Repsol was well placed to see first-hand the opportunities of blockchain within its ecosystem. MARCO, Finboot’s flagship product,à‚ allows enterprises to access and use blockchain infrastructure technologies within their organisations simply and easily through a blockchain agnostic SaaS delivery model.
This may well be the transaction that accelerates blockchain uptake beyond the innovators. In blockchain it is important to take the lead. Blockchain’s long-term value proposition rests on wide-scale adoption by all stakeholders, starting initially internally to improve workflows, then moving externally to bring on board the smallest manufacturer to the largest distributor to the end customer itself with the adoption of defining technology.
Repsol’s integration of Finboot’s MARCO platform followed these steps. First, into laboratories to track and trace the product through its lifecycle, changing characteristics to meet its customer requirements. Here, MARCO’s simplicity ensured fast and easy integration at all touch points, replacing complex legacy systems.
Seeing the product in use will ensure ROI can be easily identified. Repsol estimates that just one improved implementation in internal workflows could save about €400k per annum.à‚ MARCO’s easily configurable dashboard significantly reduces the speed from defining the scope of the problem to a POC, thereby overcoming one of the core barriers to adoption: validating ROI cost effectively and quickly.
Blockchain technology is coming of age in the enterprise world. Bespoke, private blockchains to replace costly, complex and inefficient legacy systems will continue to be the central theme of business transformation as we move towards the factory of tomorrow. Finboot is leading the charge on establishing blockchain technology as a mainstream business tool, such as email is today.
Nish Kotecha is chairman and co-founder of Finboot
The use of blockchain technology in the energy sector will be explored in detail at European Utility Week in Paris in November. Click here for details.