Is Blockchain Fatigue really Going to Set in by 2022?

Asia Blockchain Review

February 18, 2020

According to Gartner Inc, through 2022, 80% of supply chain blockchain initiatives will remain at a proof-of-concept (POC) or pilot stage, setting the stage for ‘blockchain fatigue’ within the supply chain sector.

While early blockchain pilots for supply chain pursued technology-oriented models were successful in sectors such as banking and insurance, successful blockchain use cases in the supply chain marketplace require a very different approach. Andrew Stevens, senior director analyst with the supply chain practice at Gartner Inc. believes that modern supply chains are very complex and require digital connectivity and agility across participants

A Longer Term Approach

He observes that supply chain leaders have now started to treat blockchain as part of a longer term technology roadmap and risk management planning. We see that many leaders are adopting a broader end-to-end view across their supply chains and map all requirements – from sourcing across manufacturing to the final distribution,” Stevens added. He is of the opinion that supply chain leaders should identify and establish key criteria and technology options for measuring and capturing metrics and data that can indicate an organization’s readiness to explore blockchain. Interestingly, blockchain as a technology is a collaboration agent that forces an organization to continually assess on a broad scale if its structure and employees are ready to embrace it.

Transformational Visions Of Blockchain

It’s easy to get caught up in the hyperbole that surrounds blockchain. There are a host of exciting visions of how it can transform the supply chain with new layers of security, traceability and transparency. De Beers intends to put a stop to the market for blood diamonds, Starbucks wants to have traceability from farm to cup and Walmart believes it can put an end to food contamination issues. Nonetheless, research from Gartner predicted that by 2023, 90 percent of initiatives in the sector would suffer ‘blockchain fatigue’ due to a lack of strong use cases. Talking to industry press, Alex Pradhan, senior principal research analyst at Gartner Inc. says this fatigue can be put down to the sector’s ‘overly ambitious scope and a misunderstanding of how blockchain could, or should, actually help the supply chain; and of course, inevitably this may cause the market to experience blockchain fatigue’. Ms. Pradhan believes that organizations remain cautious about early adoption and not rush into making blockchain work in their supply chain until there is a clear distinction between hype and the core capability of blockchain. “The emphasis should be on proof of concept, experimentation and limited-scope initiatives that deliver lessons, rather than high-cost, high-risk, strategic business value,” said Ms. Pradhan.

The Coronavirus Effect

Presently, the supply chain industry the world over could be affected by the coronavirus outbreak as it spreads rapidly and exceeds the SARS contagion back in 2003. According to Koray Kose, senior director analyst at Gartner Inc., there needs to be a shift in risk management and business continuity as impacts across the supply chain could lead to widespread disruptions. In short, if there was a case for blockchain in supply chain, this recent coronavirus outbreak may just be it. Imagine a marketplace that has proper transparency, traceability and security to mitigate issues within the supply chain networks and make concerns regarding materials, labour, sourcing, logistics and consumer-related purchasing habits a thing of the past. Maybe all this talk about blockchain fatigue could be way of the mark. As they say, only time will be able to tell how this tale evolves eventually.

References:

  1. Gartner, Gartner Says 80% of Supply Chain Blockchain Initiatives Will Remain at a Pilot Stage Through 2022 (23 January 2020). Accessible at https://www.gartner.com/en/newsroom/press-releases/2020-01-23-gartner-says-80–of-supply-chain-blockchain-initiativ
  2. JCK, De Beers’ Blockchain Platform Hopes to Track Every Diamond (12 June 2019). Accessible at https://www.jckonline.com/editorial-article/de-beers-blockchain-platform/
  3. PYMNTS.com, Starbucks Eyes Supply Chain Tracking Via Blockchain (8 May 2019). Accessible at https://www.pymnts.com/news/b2b-payments/2019/starbucks-supply-chain-tracking-blockchain/
  4. TechCrunch, Walmart is betting on the blockchain to improve food safety (25 September 2019). Accessible at https://techcrunch.com/2018/09/24/walmart-is-betting-on-the-blockchain-to-improve-food-safety/?guccounter=1
  5. TechHQ, Developers now make up a quarter of Goldman Sachs’ workforce (14 February 2020). Accessible at https://techhq.com/2020/02/developers-now-make-up-quarter-of-goldman-sachs-workforce/
  6. Gartner, Gartner Predicts 90% of Blockchain-Based Supply Chain Initiatives Will Suffer ‘Blockchain Fatigue’ by 2023 (7 May 2019). Accessible at https://www.gartner.com/en/newsroom/press-releases/2019-05-07-gartner-predicts-90–of-blockchain-based-supply-chain
  7. Gartner, Coronavirus: How to Secure Your Supply Chain (3 February 2020). Accessible at https://www.gartner.com/smarterwithgartner/coronavirus-how-to-secure-your-supply-chain/

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