Blockchain in Supply Chain and the Gartner Hype Curve (Part 1)

A few years ago, blockchain burst into the supply chain world with the promise of cure for a number of problems plaguing the supply chain industry. Experts said blockchain can help fix traceability, compliance, and manage stakeholder relationships. It is therefore not surprising that it found its way into the Gartner Hype Curve of 2017 for Supply Chain technologies, specifically on the “Innovation Trigger” part of the curve. It is intriguing to speculate on the future of blockchain in supply chain. We get to that discussion in part 2 of this two part blog. But first, a few interesting things about the hype curve itself.

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Gartner takes a rather cynical and fatalistic view of technology – as if every technology that comes up follows the curve determined by Gartner. Of course they leave an escape door in that the phases in the hype curve could vary from zero to many years! Is it possible that a technology could chart a different curve – say linear or hyperbolic? The part that is most interesting is the phase called “Trough of Disillusionment”. Clearly that’s the phase where many companies realize they were “cheated” by the technology and millions have gone down the drain. Is it true that no matter how useful or good a technology is, some companies would be disillusioned by it and lose money? Can this phase be shortened and if so, how?  To find answers, we must ask, “Why is there a trough?” Obviously because there was a hype. But is that the only reason? Listed below are some of the factors that cause disillusionment and determine the duration of the phase.

  • Hype: We in the IT industry are quick to advertise technology, even before it has found its footings, contrary to other industries e.g. the medical world. Part of the reason is that we have had successes in the past – after all technology development in our world has, more often than not, been a collaborative work. A side effect of this “hype at infancy” is that many players jump in. Some because they genuinely find it useful, some because they can afford it, and many because of the fear of missing out (FoMO). Understandably, some of those in the latter groups would be part of the disillusion set.

  • Misrepresentation of technology: Technology at infancy means different things to different people. This leads to its application to a variety of vastly different areas. Eventually the technology turns out to be more appropriate for certain applications than others, thereby creating a “disillusioned” set. 3D printing technology is a good case in point. At infancy, we thought we would print out a whole new world, including everything in it. Now we know areas where it is more applicable than others. Along the way it created a few disappointments.

  • Early adopters defining the common understanding of the technology: Artificial Intelligence is an in-thing today. Amazon Alexa was an early adopter of AI. But to think that AI is all about natural language is to stifle its areas of application.  After all, the brain that enables a 5 year old to speak a natural language isn’t at the same level as the brain that created the Theory of Relativity.

  • Speed of reaching technology takeoff point: S curve of technology adoption and the critical mass theory is all well-established. Additionally, in the rapidly changing world of today, how fast the technology reaches takeoff point, matters. Also important is the players forming the critical mass. For example, if Walmart were to back blockchain in supply chain, odds are that it would indeed take off.

  • Resistance from existing technology and players: Often a new technology finds itself in opposition to existing technology and players. It becomes a battle that is won / lost not just on merits but on other factors as well. For example, open systems had to fight off mainframes mainly because customers who invested in mainframes needed to protect their investments. Eventually they both figured their own individual market spaces. More recently, cloud was in a similar situation. During the battle or if establishment wins, the new technology would have disappointed quite a few people.

  • Absence of a catalyst: Sometimes technology may find it tougher or may take a longer time to reach acceptable levels. It may get help from a “catalyst”. Catalyst could be another technology evolving in parallel, a regulatory requirement, or a change in customer behavior. History shows that when the industry is pressed with impending needs, technology development happens faster.  On the contrary, absence of a catalyst could slow down technology development and hence lengthen the phase of disillusionment.

We often hear experts say with respect to a failed technology that the “timing wasn’t right”. That is a, less than rational term for one or more of the above factors not working in favor of the technology. There is no logical reason as to why every new technology has to go through the hype curve but one has to admit most have done so. In the next part of the blog, we look at blockchain in supply chain with respect to the hype curve, discuss the most talked about use cases of blockchain, and the factors that affect the progression of the technology.

Meet the Author

Deepa Sebastian

Deepa Sebastian

Marketing Campaign Manager
Deepa Sebastian brings with her a decade and a half of experience in leading, planning and implementing business transformation projects at Hewlett Packard. She was part of several critical programs and initiatives as HP navigated through mergers and acquisitions. More recently she was part of a program to consolidate entire business operations of HP onto a single platform. Deepa is currently focused on creating marketing content, campaigns and brand building at Intrigo Systems.