Blockchain will become as integrated into the way businesses are run as the internet, according to provider VeChain.
Speaking to SM, Sunny Lu, CEO of VeChain, said blockchain is set to revolutionise the way companies are managing their supply chains, but many organisations were “dragging their feet” in implementing the technology because of perceived difficulties in overhauling their existing systems.
He said because integrating blockchain into an organisation has to come from a tailored approach, initial costs were high, which was putting CEOs off.
“Blockchain is a technology that will move an organisation away from a linear supply chain to one that is increased interaction and exchange of information, so yes, there needs to be an evolution of the infrastructure of the company,” he said.
“Businesses might think that the outlay is too much but I would say the cost is not, in fact, blockchain but the hardware, software and personnel that are the foundation that will allow you to take advantage of different technologies, including blockchain and internet of things.”
He explained that like the introduction of the internet, companies would have to eventually invest in infrastructure that can support new technologies; it was just a question of whether they wanted to be leaders of the pack or follow behind.
“In the past two years we have been dealing with many enterprises or customers but most of the time we are dealing with CEOs directly because they are the decision makers that make these kind of strategic moves,” he said.
“Some ask me, ‘Do we have to use blockchain right now?’ and I always say, ‘No you don’t but if you want to secure your position in the next five to 10 years, then that is the strategic move you have to make right now otherwise you will the be followers of the leaders of the future’.”
He said a challenge his company had faced was bringing together all the players in the supply chain to sign up blockchain alongside the main organisation.
“There are always solutions to these perceived challenges but what I think the biggest challenge for implementation is mindset change because its not just building one system for one company—we are building a collaborative platform for many participants in the supply chain,” he said.
“What we did to solve that is to select or identify a couple of the more critical players to come together first and then replicate what we did with them with the other smaller players.”
He added for organisations reluctant to implement the technology because due to its complexity, it was not necessary to have all knowledge of how blockchain worked but to understand what it could do for the organisation's goals.
“For most enterprises, when they are faced with this new type of technology, they usually firstly hire consultant services to try and understand in terms of how it could work with their existing business model and then they use that analysis to build up a trail concept or pilot,” he said.
“At the end of the day, blockchain is an infrastructure technology and it is like organisations using the internet everyday – you don’t need to know how it is doing or how the technology is running behind it, enterprises just need to implement it.”