Ecosystems and trust: What KPMG brings to blockchain

‘It’s not about the enterprise anymore; it’s about the ecosystem’

Opening the event with KPMG’s view of innovation and technology, including specifics around blockchain, National Managing Partner for Innovation and Enterprise Solutions Fiona Grandi and Global Blockchain Leader Arun Ghosh emphasized that achieving meaningful blockchain adoption requires moving beyond the enterprise to the entire ecosystem. In these remarks, particularly when KPMG stressed its role as a network provider, a “trusted layer” across a platform and an ecosystem, TBR heard echoes of the “Business of One” framework and the gradual shift within the IT services, consulting and technology space toward more robust partnering — and clients that expect more from their vendors’ ecosystems. Trust, as repeatedly invoked by KPMG, echoes the firm’s DNA as one of the Big Four, a firm trusted with clients’ financials, systems and regulatory obligations. Neatly pulling these two ideas together — the increasing need to play across an ecosystem, and KPMG’s core value around trust — Ghosh said one key question the firm helps clients answer, when considering blockchain, is quite simply, “Can I create a trusted ecosystem?” If clients can answer that question, they are prepared to move beyond what Grande described as a nonstarter position around blockchain. “When [clients] say, ‘We want it on blockchain,’ they haven’t thought it through,” Grandi said. On a more concrete level, KPMG’s leaders stressed the firm’s role in helping clients move toward smart contracts, a core use case for blockchain’s distributed ledger technology. Smart contracts, as KPMG’s U.S. blockchain program lead, Tegan Keele, summed up nicely, do not automate processes; they remove manual tasks. To remove those manual tasks, businesses comprising the ecosystem have to reach a consensus on process diagrams to establish the governance flows for the blockchain.

One specific example from the day stood out to TBR. KPMG professionals described a large-scale operations consulting engagement, including “pain and trust point mapping,” that led to a blockchain-enabled solution providing farm-to-table provenance, starting with the government agency responsible for licensing the farms. We will explore below how a government-mandated blockchain could enhance societal goals around welfare and certification, but the key characterization of KPMG’s role came from Ghosh, who said the use case highlighted the firm’s overall goal for blockchain, which is to “create [a] common, real-time, trusted source of the truth to help solve industry’s most critical issues … create an ecosystem around something that already exists, then add a layer of trust, enabled by blockchain.”

‘Those who get it want to create their own ecosystem and control it’

Understanding how KPMG defines the core values of blockchain requires also understanding how clients and technology partners see the firm itself, including what KPMG brings to innovations, engagements and solutions. Throughout the event, KPMG ceded the stage to clients and technology partners, such as IBM (NYSE: IBM) and Microsoft (Nasdaq: MSFT), that repeated a few key themes on what KPMG brings to blockchain. Most frequently, these speakers noted KPMG’s industry expertise, especially as related to specific business processes and industry-centric regulatory challenges. On this second point, one client stated that KPMG’s trusted brand and regulatory expertise were essential in the blockchain space “to drive institutional adoption.” Another client said KPMG brought a “holy trinity of expertise” around business processes, applicable technology and change management. (Note: In TBR’s view, change management remains a critical, if sometimes neglected, element of all emerging technology adoption and digital transformation. As multiple clients and consultancies have said, “The people, not the technology, are the problem.”) A technology partner said blockchain is a “team sport” and that “KPMG has deep process expertise in life sciences and supply chain,” two elements that had been critical to the partner’s joint engagement with a U.S. pharmaceutical giant. TBR also noted that multiple KPMG clients described the firm as a systems integrator (SI), fitting with KPMG’s approach to let the solution drive decisions around the technology stack, products and software.