Blockchain Commercialization: Real World Applications Get Real
As blockchain technology continues to advance at a rapid pace, questions remain about whether it will hit the mark in terms of commercial value. Despite a number of promising use cases in the financial industry as well as clear application for sectors like healthcare, utilities and transportation, among many others, blockchain’s potential is a long way from being fully realized.
EY (formerly Ernst & Young), a global leader in assurance, tax, transaction and advisory services believes that the time is ripe for blockchain to move deep into the world of commercialized solutions. In support of this endeavor, it recently announced the launch of EY Ops Chain, a set of applications and services that support efforts on the part of organizations to boost the commercial integration of blockchain technology across diverse industries — not just finance.
Developed jointly by EY and a host of other industry collaborators, EY Ops works integratively with EY’s broad swath of consulting, tax and audit expertise to bring real world solutions to the enterprise and supply chain management space.
Through the use of EY Ops, supply chain systems can be simplified and seamlessly integrated into digital contracts, inventory systems, logistics protocols, pricing, inventory and payments. This can lead to enhanced forecast accuracy and performance outcomes while ensuring a reduction of working capital requirements. Through this new development, EY will begin with offering financial services and supply chain management solutions across a number of different industries, including oil and gas, media and entertainment and automotive, among others.
Advancing Blockchain Technology
As further indication of EY’s investment in blockchain technology, the organization also recently launched its Blockchain Lab in New York, coalescing financial services work with blockchain solutions in a single locale centered in New York’s Union Square. This lab is the third for EY, joining their two other key blockchain centers in London and Trivandrum, part of EY’s global research ecosystem, EY wavespace™.
To fuel the launch of EY Ops Chain, EY is pouring money into research while attracting top talent in areas like cryptography, physics, math and software development — all with the goal of building momentum around the mature and scalable design of blockchain services. These professionals will be charged with assisting clients in applying blockchain and distributed ledger technology amid a rapidly evolving blockchain environment.
In an interview with Bitcoin Magazine, Paul Brody, EY’s Global Innovation Leader, said that EY is strongly invested in putting blockchain technology to work in the commercial realm. “We believe that while most companies are much more focused on being part of large scale ecosystems, their IT capabilities haven't kept up. Using blockchains, EY can give companies visibility to supply chains, billing and payments across their ecosystem in a way that’s far more reliable and accurate than in the past. We think we can have a significant impact on working capital and operating costs as well as time-to-market.”
Multi-enterprise collaboration, said Brody, is at the heart of EY’s vision for taking blockchains into the enterprise. He noted that historically, companies have managed collaboration by sending messages to each other on a one-to-one basis resulting in many islands of information. “Blockchain and supply chain management are an especially good fit because of the distributed and multi-party nature of the business. With blockchain, we can get universal visibility and synchronization of data without having to compromise on security and privacy.”
Putting the Blockchain to Work
Brody says that EY is currently working with a manufacturing company that has been struggling to manage its complex procurement process with multiple contract manufacturers and suppliers. At present, he says, the company’s collaborations on everything from pricing to purchase orders is managed on a point-to-point basis using emailed Excel spreadsheets. However, with the new blockchain solution, notes Brody, every supplier and participant in the network will maintain a single integrated view of purchasing, payments and pricing.
“The cost savings just from reduced auditing will pay for the entire investment, but the real gains come from [the integration of] suppliers to payments and invoicing and operations. Our client will have accurate system-wide visibility to inventory and need significantly less working capital to run the network when this system goes to full production,” said Brody.
“Supply chain management, procurement and order to cash processes are probably the hottest areas right now outside of finance,” said Brody. “Related to that, we think there will be a big push around tax, audit and cybersecurity as enterprises embrace the immutable and distributed nature of blockchain technology.”
Even in the short term, Brody expects that many companies will embrace private blockchains to replace point-to-point EDI and XML systems in the supply chain. In the days ahead, he points to three significant evolutions: “First, we believe there will be a move toward operating work involving billing and payments to drive gains in working capital. Second, we see an extension of the private networks in both directions — further back across multiple tiers of the supply chain and forward to customers. Finally, we believe that companies will gradually migrate from proprietary private blockchains to public networks where they can capture the full network effects of the technology.”