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When Is a Disruption Not Particularly Disruptive?

By David Yockelson | January 18, 2018 | 0 Comments

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Last week, IBM and Maersk announced the following blockchain-oriented venture (read about it here) to help “enhance global trade.” Being a student of digital disruption and a person (OK, analyst) eager to learn of new and exciting uses for disruptive technologies like blockchain, I read the announcement. I had to stop when I read the following: “…we’ve shown that blockchain can work on many of the most common barriers in supply chains. We’ve used the technology to securely digitize, automate, and store critical paperwork. Early testing demonstrated that we can significantly reduce administrative costs, which at the time of testing could be as high as 15% of the value of the goods shipped.”

While that sounds awesome, I suddenly remembered that I had an extensive background in technologies like EDI, extranets, document imaging, OCR, document management, business process management/workflow (not to mention others). All of these technologies can “…securely digitize, automate, and store critical paperwork,” and all of them purport to (and have been proven to) “…significantly reduce administrative costs.” So I was left asking the following questions:

  • Had IBM forgotten about several areas of its portfolio that drive hundreds of millions of dollars in sales (not to mention history going back to, say, the acquisition of Filenet in 2006 for a then-remarkable sum of $1.6B)?
  • Had both IBM and Maersk totally written off every other technology that could address the stated issues…or had they both rigorously compared implementations and results and determined that, yes, blockchain was the ONLY way to achieve success?
  • Were both IBM and Maersk attempting to play to market fervor over blockchain and strike a nerve in an area that admittedly and apparently has not been completely solved by other technologies?

[I’m voting for that last one.]

I’m not saying that blockchain-based solutions wouldn’t be helpful; it’s possible they have some advantages or traditional or current technologies and methods. But what I am saying is that I’d like technology and service providers (TSPs) to put some meat behind their marketing. In this case, I’d like to understand comparatively how blockchain (now with its current level of immaturity and in future when it’s more mature) would stand up against the other technologies above (indeed, there are some excellent questions in the comments following the announcement). In this way, IBM and Maersk could possibly have their prospective customers move MORE quickly if blockchain can demonstrate value beyond what they can achieve today.

Customers want to understand value, particularly when they are being sold (or considering investments in) so-called disruptive technologies. They need this in terms of value to their business outcomes and value relative to other solutions or methods they might choose to achieve those outcomes. This announcement had neither.

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