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Determination of Cost Benefits from Implementing a Blockchain Solution
- Aerospace Standard
- ARP6984
- Issued
Downloadable datasets available
Annotation ability available
Sector:
Issuing Committee:
Language:
English
Scope
This SAE Aerospace Recommended Practice (ARP) provides insights on how to perform a Cost Benefit Analysis (CBA) to determine the Return on Investment (ROI) that would result from implementing a blockchain solution to a new or an existing business process. The word “blockchain” refers to a method of documenting when data transactions occur using a distributed ledger with desired immutable qualities. The scope of the current document is on enterprise blockchain which gives the benefit of standardized cryptography, legal enforceability and regulatory compliance. The document analyzes the complexity involved with this technology, lists some of the different approaches that can be used for conducting a CBA, and differentiates its analysis depending on whether the application uses a public or a private distributed network. This document is intended for people who do not have a deep technical understanding or familiarity with blockchain solutions to qualify and quantify its economic benefits (i.e., the value proposition).
Rationale
The aerospace industry is rapidly digitalizing processes across its asset life cycle stages including most transactions, and with this are emerging novel ways of recording these electronic transactions. One such technology for recording electronic transactions securely is Blockchain, defined as distributed ledger technologies which includes enterprise blockchain, not having a wider use in the aerospace industry because of the lack of technical understanding as well as questions about its benefits. Assessing these benefits relative to the investments needed to implement such a blockchain solution is difficult, contributing to the slow adoption rate. The aerospace industry is conservative in its approach to technology adoption and hence it is difficult to change legacy processes. Additionally, the industry is very fragmented, technology is advancing at a faster rate and applies to a wide geographical range under different regulatory oversight that makes implementation challenging. This recommended practice lays out a methodology for qualifying and quantifying the benefits of replacing or augmenting a legacy process with a blockchain solution.
Topic
Data Sets - Support Documents
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| Unnamed Dataset 1 | ||
| Unnamed Dataset 2 | ||
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| Table 1 | Aerospace asset key stakeholder description and responsibilities (extracted from AIR7501) | |
| Table 2 | Aerospace life cycle challenges and reasons | |
| Table 3 | Benefits of blockchain | |
| Table 4 | Gating criteria | |
| Table 5 | Cost of implementation and effort | |
| Table 6 | Build from scratch versus join a network | |
| Table 7 | Pros and cons of build from scratch versus join a network approach | |
| Table 8 | Blockchain development factors | |
| Table 9 | Blockchain complexity | |
| Table 10 | Blockchain application sizing scenarios | |
| Table 11 | Cost model | |
| Table 12 | Benefit model | |
| Table 13 | Challenges and how to address them | |
| Table 14 | Customer acquisition road map | |
| Table 15 | Typical indicative fee structure | |
| Table 16 | Airline benefit | |
| Table 17 | ROI computation - revenues | |
| Table 18 | ROI computation - cost |
Issuing Committee
G-31 Electronic Transactions for Aerospace Committee
The ETA committee is responsible for creating and maintaining SAE technical reports focusing on secure digital solutions to store, move, and access product lifecycle data and to streamline technical supply chain data to track, trace, and authenticate critical aircraft parts and materials.
Reference
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