ARP6984 Determination of Cost Benefits from Implementing a Blockchain Solution

08/19/2021

Features
Issuing Committee
Scope
Content
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
Content
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.
Meta TagsDetails
DOI
https://doi.org/10.4271/ARP6984
Pages
30
Citation
SAE International Recommended Practice, Determination of Cost Benefits from Implementing a Blockchain Solution, SAE Standard ARP6984, Issued August 2021, https://doi.org/10.4271/ARP6984.
Additional Details
Publisher
Published
Aug 19, 2021
Product Code
ARP6984
Content Type
Recommended Practice
Language
English

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