4 Making Sense of Blockchain: How Firms Can Chart a Strategic Path Forward ^Top Overall, blockchain enthusiasts envision a seamless world of digitized trans- actions. The technology’s anticipated business value ($3 trillion by 2030) and projected annual cost savings ($2-6 billion) make it one of the most potentially transformative technologies on the horizon.1 Despite these exciting possibilities, it is not always obvious whether a partic- ular company should adopt blockchain, or when and how it should go about it. Technology-driven companies do often succeed at outpacing competitors, but the right firm capabilities and market timing are critical for success.2 Therefore, managers should exercise caution before committing. It is crucial to carefully analyze the firm’s need for blockchain, its anticipated value, and the firm’s capabilities before investing in the technology. To cut through the noise surrounding blockchain, the Mack Institute has stud- ied firms, spoken to leading practitioners, and laid out the following road map to help companies make informed decisions. This white paper examines four key questions that managers should consider as they work through whether their firm should adopt blockchain, how it might impact their business, and the strategic choices for implementation. 1 Melanie Swan, Blockchain: Blueprint for a New Economy (Sebastopol, CA: O’Reilly Media, Inc., 2015). Anna Irrera and Jemima Kelly, “Blockchain could save investment banks up to $12 billion a year: Accen- ture,” Reuters, January 17, 2017, https://www.reuters.com/article/us-banks-blockchain-accenture/block- chain-could-save-investment-banks-up-to-12-billion-a-year-accenture-idUSKBN1511OU. Gartner, Inc., “Gartner Reveals Top Predictions for IT Organizations and Users in 2017 and Beyond,” press release, October 18, 2016, https://www.gartner.com/newsroom/id/3482117. Matt Turner, “A ‘game changer’ technology on Wall Street could shake up stock trading,” Business In- sider, May 25, 2016, http://www.businessinsider.com/goldman-sachs-blockchain-cash-equities-trad- ing-2016-5. Oscar Williams, “Santander is experimenting with bitcoin and close to investing in a blockchain startup,” Business Insider, June 17, 2015, http://www.businessinsider.com/santander-has-20-25-use-cases-for-bit- coins-blockchain-technology-everyday-banking-2015-6. 2 Michael Sadowski and Aaron Roth, “Technology Leadership can Pay Off,” Research-Technology Man- agement 42, no. 3 (1999): 32-33, doi:10.1080/08956308.1999.11671315.