Blockchain – is it actually worth it?

Now it’s time to circle back to the question we asked initially – what benefits will blockchain bring to an organisation that make it worth the time and effort it will take to overcome these hurdles?

Primarily once blockchain is implemented within the supply chain it will contribute to cost reduction and also address the lack of transparency currently commonplace within supply chain management. Outwith supply chains there is also opportunity for blockchain to contribute to cost reduction through the use of self-executing smart contracts in various divisions of the mining operation.

One of the key goals of supply chain management involves getting the right product in the right condition to the correct location in a timely manner at the lowest possible cost using measures such as speed, dependability, cost and flexibility as KPIs, all the while reducing risks both within the organisation and interorganisationally along the supply chain. Rising costs are one of the key challenges being faced within the gold mining industry and within the supply chain operating costs can account for up to two-thirds of the final cost of traded goods. Operators are constantly on the lookout for tools or technologies that enable cost cutting whilst being able to remain competitive. The inherent nature of blockchain provides a platform that offers companies the opportunity to verify each link in the supply chain network is authentic without excess administrative costs or hours or intermediaries such as clearing houses and banks, so can be used to track and monitor assets in a cost efficient and transparent manner.

If we look at this from another perspective, we can ask if implementing blockchain for supply chain management will enable supply chains to better accommodate market changes thereby becoming adaptable? Does this technology allow companies to respond to short-term changes in supply or demand thereby becoming agile; and will it allow companies to incentivise partners within the supply chain to improve their own practices thereby becoming aligned? Adaptability of supply chains can be considered a dynamic capability that would provide first movers with advantages in the market place, important in achieving competitive advantage within the gold industry where product quality does not offer much chance for differentiation and competitive advantage can be found primarily in cost cutting. To truly offer the advantages of a dynamic capability, blockchain within supply chain management needs to be complemented by corresponding organisational and human resources able to intuitively apply the technology. IT can play a huge role in value creation and business performance, but processes need to be in place to take full advantage of the technology to achieve alignment, adaptability and agility, all of which starts with an implementation that clearly identifies the benefits and drawbacks of the technology and blockchain’s use within the organisation, and puts in place a plan to fully mitigate the risks involved.

So in the end it really won’t matter much about the benefits of blockchain if the implementation isn’t up to scratch?

In a nutshell yes.  Before any of these benefits are realised this emerging technology must be implemented throughout an organisation in an industry that has historically been slow to take up technological change but has recently seen a rapid change in the rate of globalisation and digitalisation. Change management implementation models such as Kotter’s 8-step process allow managers to plan this change in a more incremental manner and identify challenges that may be faced along the way, and the use of more than one change implementation model will assist with identifying challenges on both a micro and macro level that may not be possible using only one model. The major challenges facing implementation of blockchain stem from the novel nature of the technology and an overall lack of understanding of the technology within both the executive suite and wider workforce. If this issue is addressed appropriately during the planning and implementation phases and blockchain can be broken down and communicated effectively across all levels of an organisation this will smooth out the rocky road faced when implementing emerging technologies. If this can be done effectively then this will pave the way for an effective implementation of blockchain and enable gold mining companies to take full advantage of everything blockchain can bring to an organisation.