A former blockchain leader at Deloitte has urged companies to invest in the technology now or pay the price later.
Eric Piscini, now CEO of a blockchain start-up, told SM the technology was reaching a “critical point”, and that despite the challenges, now is the time for procurement professionals to become early adopters.
Its long-term potential, he said, was so significant that “if you’re a company today and you don’t do anything in blockchain, you might end up paying a lot of money to be part of that in the future – or you’re going to be displaced by those using the technology”.
“If you compare blockchain technologies to the lifespan of the internet, we are in 1995 right now,” he said. “People like it, but while you have big companies starting to move in with it like Amazon did with the internet, others are saying, ‘That’s not going to work, no one will accept that.’”
But like with Amazon and the internet, blockchain will not only change business, but give rise to entirely new business models, he said.
“Amazon’s business model exists because of the internet, and I think we’re going to have the same situation here. Because of the technology being here, we’re going to see different types of businesses starting based on it.”
Among its concrete benefits, as well as making it easier and quicker for companies to see exactly what is happening in their supply chain, would be cutting out the need for time-consuming reconciliation of records, he added.
When buyers and suppliers have separate systems of records, “we are forced to reconcile these two databases, and we spend a lot of time and energy to do that,” he said.
“If suddenly you don’t have two sources of truth but one [as with blockchain], there is no need for reconciliation, and you save a lot of energy and a lot of people. This is a very significant aspect that we don’t talk about enough.”
Piscini, whose company, Citizen’s Reserve, is raising funds to develop its own blockchain platform, said another advantage for early adopters is the chance to help shape the market to their own requirements.
He said electronics providers he had spoken to raised the issue of not being able to support suppliers financially to produce “on time and on quality”.
“They don’t have enough access to capital to actually do that,” he continued. “So we built a module on the platform to help the financing of tier three and four suppliers.
“That is another benefit of engaging with the ecosystem today, because you have a chance to customise the environment to your needs. If you come two or three years later you won’t, you will have to adopt whatever is already there.”
Blockchain, though not widely used in procurement, has been around for several years in the cryptocurrency space, Piscini said, and so many who are not yet active “think that because they missed the first wave of advancement, they missed the technology for good.”
“But I would tell them it’s not too late, especially in the supply chain business where we are still in the early stages of using blockchain. It’s time to come and build.”
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