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Transcript of How Private Blockchains can save companies 30% of their costs
2016
Atul Khekade
Atul Khekade is a Serial Entrepreneur,
Advisor and Financier with expertise in
Global Trade and Finance. He is a
Blockchain and Digital Currency
enthusiast.
How Private Blockchains can
save Companies up to 30% of
their costs
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
Blockchain revolution has opened up countless possibilities for the way trade
and exchange of value and resources can be managed in the new global
economy. This White Paper discusses a simple implementation using Private
Blockchain and an underlying trade network that can help Fortune 500 and
global corporations save up to 30% of their costs using exchange of idle
resources.
About the Author :
Atul Khekade is a serial Entrepreneur, Advisor and Financier. Atul’s interests
include digital currency, blockchain technology, global trade and finance. Atul
has ongoing professional roles with Netz Capital Advisors, Monetago Inc. and
Airnetz Traveltech. Atul was invited to write for Forbes Magazine and has
been featured across global publications such as Bloomberg Businessweek,
Rediff.com, CNN and Indiatoday.
Companies with interests in exploring the Private Blockchain Trade Network
can contact Atul Khekade at the following contact details :
Email : atul dot Khekade at gmail dot com
Phone : +1 415 513 0026
Linkedin :
https://www.linkedin.com/in/atul-khekade-9076b36
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
Table of Contents
1. Introduction
2. Example of Idle and Unutilized Resources
3. A Look at Corporate Expenses
4. Private Blockchain Trade Network
5. Use Cases
6. Future Expansion
7. Conclusion
8. Regulatory Perspective
9. Next Steps
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
1. Introduction
A Founder of a Private Equity and Alternative Asset Management Company was recently
in the news headlines for taking a home a annual salary of $750 million.
$750 million!!!!! Pay of 1 Person!!
That’s probably more money anyone will need for even 200 lifetimes. What did this
person do to deserve such an exorbitant pay package??
Saving Corporate Costs:
Simple : The Private Equity/Asset Management firm buys a company using pension fund
money. It then cuts down all possible expenses that are non-requisite or less priority. A
year after initiating these efforts, the company balance sheet starts showing significant
improvements. Costs go down, earnings look better and profits go up.
Naturally, the company becomes fitter, leaner and gets a valuation of 2 to 3 times more
than it was acquired for. Over the next 3-4 years, the company keeps on improving or
stabilizing its balance sheet. The Private Equity/Asset Management company then exits
the company at 4 to 5 times its initial valuation. The profit from a leverage buyout
structure gives the private equity/asset management company an exorbitant amount of
profit. This profit is shared by the founders and team members of the company.
And that’s how the founder chairman of the company takes home
$750,000,000 We are all aware how the technology has disrupted our everyday lives over the last
many years.
Blockchain Technology has created a tremendous amount of disruption in Banking and
Financial services markets. We are all aware of it’s first disruption, the BITCOIN.
There have been many platforms built over The Blockchain Technology, to name a few
Ethereum, Ripple or even currencies like Litecoin and Dogecoin.
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
One of the biggest things that the Blockchain is going to disrupt is how large
corporations utilize their resources and spend on their needs. Blockchain provides a
platform for major disruption towards ledger management at the Global 5000
companies which represent over $58 trillion of revenues and over 130 million
employees. This select group of companies represent approximately 70% of the
worldwide GDP. The revenue per employees for these top companies in the world is
over $357,000.
This white paper discusses blue print of a project initiated by myself and a certain group
of highly experienced individuals that will over a period of time help save companies
over 30% of it’s costs using what we call :
“A Private Blockchain Trade Network”
2. Examples of Idle & Unutilized Resources
The global ecosystem is actually terribly linked. In spite of having excess pr
and idle/unutilized resources, there is scarcity of financial mechanism to connect the supply
with the demand. Biggest problem is that money has become such a major instrument that
things are no longer evaluated based on their value, but purely on the price tag th
with.
For example : An airline that operates with 70% occupancy is connected through global
distribution systems that sets it’s daily price of the inventory. In spite of this, there is a wastage
of 30% of it’s empty seats on daily basis.
there is a tremendous wastage of a resource.
We can find similar examples everywhere.
AirlinesNon-Occupied Seats on Every Flight
Hotels Non-Occupied Rooms wasted Everyday
RestaurantsUnderutilized buffets, breakfasts and dining
capacity
Real Estate Funds/TrustsUnutilized Residential Real Estate Spaces
Unutilized Commercial Real
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of
Examples of Idle & Unutilized Resources
The global ecosystem is actually terribly linked. In spite of having excess production, capacity
unutilized resources, there is scarcity of financial mechanism to connect the supply
with the demand. Biggest problem is that money has become such a major instrument that
things are no longer evaluated based on their value, but purely on the price tag th
An airline that operates with 70% occupancy is connected through global
it’s daily price of the inventory. In spite of this, there is a wastage
eats on daily basis. The moment it’s flight takes off with empty seats,
there is a tremendous wastage of a resource.
We can find similar examples everywhere.
Airlines Occupied Seats on Every Flight
Hotels Occupied Rooms wasted Everyday
Restaurants Underutilized buffets, breakfasts and dining
Real Estate Funds/Trusts Unutilized Residential Real Estate Spaces
Unutilized Commercial Real Estate Spaces
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
oduction, capacity
unutilized resources, there is scarcity of financial mechanism to connect the supply
with the demand. Biggest problem is that money has become such a major instrument that
things are no longer evaluated based on their value, but purely on the price tag that they come
An airline that operates with 70% occupancy is connected through global
it’s daily price of the inventory. In spite of this, there is a wastage
flight takes off with empty seats,
Media Buying CompaniesNon-occupied Media assets (Both
Offline and Online)
Schools/CollegesUnderutilized Classroom capacity in
Schools, undergrad schools and grad
schools
Auto ManufacturersYear End or last production lines on specific
car models
Bus Operators/AggregatorsUnutilized seats in buses/Trains
Recreational FacilitiesUnutilized capacity on gyms, swimming
pools, recreational areas in hotels or
dedicated recreational facilities
Software CompaniesSoftware product licenses
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of
Media Buying Companies occupied Media assets (Both
Offline and Online)
Schools/Colleges Underutilized Classroom capacity in
Schools, undergrad schools and grad
Auto Manufacturers lines on specific
Bus Operators/Aggregators Unutilized seats in buses/Trains
Recreational Facilities Unutilized capacity on gyms, swimming
pools, recreational areas in hotels or
dedicated recreational facilities
Software Companies Software product licenses
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
3. A Look at Corporate Balance Sheets
Below is a snapshot of a Fortune 500 construction services company. After analyzing the
balance sheet, here is what takes most out of the pockets of the company.
Manpower Costs
25%
Meeting/Travel /Business Development Costs
10%
Employee Welfare/Recreational Costs
3%
Corporate Training Costs
5%
General and Administrative Costs
8%
Due to the weak global economic conditions, the company has initiated a $1.5 billion cost
reduction plan. Here are some excerpts from the company’s press release :
“We are facing a convergence of challenging marketplace conditions in key regions and industry sectors – namely in mining and energy,” said XYZ, Company Chairman and CEO. “While we’ve already made substantial adjustments as these market conditions have emerged, we are taking even more decisive actions now. We don’t make these decisions lightly, but I’m confident these additional steps will better position Company to deliver solid results when demand improves.”
This year is the company’s third consecutive down year for sales and revenues, and 2016 would mark the first time in Company’s 90-year history that sales and revenues have decreased four years in a row.
Since 2013, Company has closed or announced plans to close or consolidate more than 20 facilities, impacting 8 million square feet of manufacturing space. The company has also reduced its total workforce by more than 31,000 since mid-2012.
“We recognize today’s news and actions taken in recent years are difficult for our employees, their families and the communities where we’re located. We
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
have a talented and dedicated workforce, and we know this will be hard for them,” said XYZ.
Such is the impact of economic conditions on the company. Over 31,000 people are going to
lose their jobs. Why did such a company with revenues in excess of $50 billion could not
efficiently manage it’s resources and costs. Why did it have to come to the point where
company had to take drastic steps and fire people.
The answer is simple. There is a lack of financial ecosystem which enables such companies to
efficiently manage their ledger and keep costs in control.
Ledger Capabilities of blockchain can be used to efficiently run the company and keep it’s costs
under control while at the same time not compromising on meeting employee/staff needs and
keeping long term growth on track.
4. Use cases of Cost savings
Lets take some examples at resources and needs of the companies
Company A is a fortune 500 software products and services company with billions of dollars of
sales. Company A executives are invited for a conference in London, UK. The company however
has downsized on it’s travel budget due to weak economic conditions and has budget only for 1
of it’s executives to travel. The 3 additional members of the team are not ap
even if their presence is critical to long term business development for the company.
Company A provides certain software products licensing to
but doesn’t have company B as it’s client.
Executives looking for Travel, stay budgets
for a Conference Critical to Business
Development of the Company
Company B is one of the world’s largest airline. The airline operates at 60
typically. The airline operates daily with over 150,000 unoccupied First, business and Economy
Class seats. Company B, the airline
is unable to allocate budget for software licensing capabilities of company A.
Daily Empty/Unoccupied seats on the airline
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of
Use cases of Cost savings and idle resource utilization
at resources and needs of the companies :
Company A
is a fortune 500 software products and services company with billions of dollars of
Company A executives are invited for a conference in London, UK. The company however
has downsized on it’s travel budget due to weak economic conditions and has budget only for 1
of it’s executives to travel. The 3 additional members of the team are not approved for travel
even if their presence is critical to long term business development for the company.
Company A provides certain software products licensing to various industries including airline
but doesn’t have company B as it’s client.
ooking for Travel, stay budgets
for a Conference Critical to Business
Development of the Company
Looking to sell software products across
various industries including airlines and
hospitality
Company B
is one of the world’s largest airline. The airline operates at 60-70% occupancy
typically. The airline operates daily with over 150,000 unoccupied First, business and Economy
, the airline is budget constrained due to poor economic c
is unable to allocate budget for software licensing capabilities of company A.
Daily Empty/Unoccupied seats on the airline Looking to enhance productivity and profits
through Software Products but has budget
constraints for their licensing
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
is a fortune 500 software products and services company with billions of dollars of
Company A executives are invited for a conference in London, UK. The company however
has downsized on it’s travel budget due to weak economic conditions and has budget only for 1
proved for travel
even if their presence is critical to long term business development for the company.
various industries including airline
Looking to sell software products across
various industries including airlines and
70% occupancy
typically. The airline operates daily with over 150,000 unoccupied First, business and Economy
is budget constrained due to poor economic conditions and
Looking to enhance productivity and profits
through Software Products but has budget
for their licensing
Company C is a real estate fund/investment trust with one of the largest real estate under
management. Company C has plenty of unoccupied real estate spaces in it’s portfolio in both
commercial and residential segment.
Has unoccupied office spaces in the city
Company D is a well funded startup
estate analytics products. Company D is looking for office space in the city. But
company looking to turn profitable, it is looking to conserve its cash.
Looking at office space in the city for it’s staff
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of
Company C
is a real estate fund/investment trust with one of the largest real estate under
management. Company C has plenty of unoccupied real estate spaces in it’s portfolio in both
commercial and residential segment.
spaces in the city Possibly looking at Real Estate Analytics tool
of company D to improve fund management
Company D
is a well funded startup incubated from a fortune 500 company providing rea
. Company D is looking for office space in the city. But
company looking to turn profitable, it is looking to conserve its cash.
Looking at office space in the city for it’s staff Looking at increasing its product proof of
concepts catering to Real Estate
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
is a real estate fund/investment trust with one of the largest real estate under
management. Company C has plenty of unoccupied real estate spaces in it’s portfolio in both
Possibly looking at Real Estate Analytics tool
of company D to improve fund management
providing real
. Company D is looking for office space in the city. But as it’s a startup
Looking at increasing its product proof of
ing to Real Estate
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
Company E
Company E is a Fortune 500 media buying company looking to increase its media assets
through inviting individual media asset owners to it’s seminars. The company owns several
unoccupied media assets.
Media buying company looking to arrange
seminars
Owns several unoccupied media assets both
online and offline
Company F
Company F is one of the largest hospitality chains with 60-70% room occupancy and 30%
banquet occupancy looking to increase its advertising presence to promote it’s properties to
attract more customers. It is unable to allocate budget for it’s advertising and promotion
spending because it’s reeling under high debt incurred during construction and is also taking a
cautious approach in poor economic conditions.
Hotel Operator with unoccupied rooms and
banquet halls
Hotel Operator is looking to promote it’s
property through promotion and marketing
5. Private Blockchain
Company A, B, C,D, E and F can save costs by exchanging
other’s needs by saving costs mutually.
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of
Private Blockchain Trade Network
Company A, B, C,D, E and F can save costs by exchanging their idle resources against each
s needs by saving costs mutually.
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
their idle resources against each
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
Company A,B,C,D,E and F would get a mining access to trade blockchain & can trade each
other’s idle unutilized resources against a token on Blockchain network. We can even call it a
“tradecoin”
The Trade Network may allocate each company a digital token of equivalent value of it’s
resources.
Proof of Stake (A Method of Blockchain Mining)
Image Source : Cointelegraph
While Bitcoin uses proof of Work mining, it gradually makes infeasible to mine bitcoins because
of the incremental use of energy.
The Blockchain Trade Network however will make use of the Proof of Stake mining.
With proof of stake mining, company A,B,C,D,E and F will be allotted a certain number of Digital
tokens or Tradecoins based on the estimated value and importance of the resources they list.
This appraisal would happen through a team of corporate experts and ex-CFOs.
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
So for example, travel budgets in the corporate generally take major backseat when the
economy is weak. This affects the travel industry completely. Airlines and Hotels lose a major
share of their revenues and have to go through debt restructuring rounds. However, in the
private blockchain trade, the airline and hospitality chain may be given a larger share of Proof
of Stake mining structure. This system however will be reviewed every 3 months and Tradecoin
ownership will change as more and more of the Global 5000 companies join the network.
The biggest advantage of all the corporate joining a Blockchain Trade Network is that they can
now trade their idle resources against idle resources of multiple companies through a common
unit of exchange on the digital network.
Thus, Company A,B,C,D,E and F can collectively save their costs by up to 30%
6. Future Expansion
Companies of significant scale and resources would get an access to Private Blockchain
Trade network. We could be looking at saving 20% of the global costs or over
cost savings. At the same time, there would be utilization of idle
Estimated Total Combined Revenue : $58 Trillion
Estimated Manpower Employed : 130 million
Estimated Revenue Per Employee : $357,000
Note : Logos are used for illustration purposes only
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of
Companies of significant scale and resources would get an access to Private Blockchain
network. We could be looking at saving 20% of the global costs or over
cost savings. At the same time, there would be utilization of idle and wasted
Global 5000 Companies
Estimated Total Combined Revenue : $58 Trillion
Estimated Manpower Employed : 130 million
Estimated Revenue Per Employee : $357,000
: Logos are used for illustration purposes only
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
Companies of significant scale and resources would get an access to Private Blockchain
network. We could be looking at saving 20% of the global costs or over $10 trillion in
and wasted resources.
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
7. Conclusion
Fortune 500 companies can utilize their enhanced balance sheets to enjoy higher
valuations, saving costs and initiating new projects. The companies can turn leaner, fitter
and recession proof.
By making an efficient use of Trade network on a Private Blockchain network, the
companies can save costs on :
• Manpower
• Employee Welfare
• Travel
• Housing and Real Estate
• Employee family Education
The cost savings can be invested in :
• New Jobs Creation
• Investing in new products and Technology
• Corporate Social Responsibility
• Green Initiatives
• Greater Shareholder value and returns
8. Regulatory Perspective
This proposed trade network does not come under the laws of Barter Exchange
because it would happen over a network of traders and exchange value via a coin. We
are all aware that Barter networks are taxed on the equivalent fiat value of the goods or
service in the country.
However the Blockchain Trade Network utilizes idle resources of corporate and
gives a trade platform for such idle and wasted resources through a common unit of
digital token. This would save corporate expenses and help them efficiently manage
their budgets. This would save a lot of jobs and keep the consumption economy in tact
during cash crunch situations and weak economic conditions.
Even if the Government proposes a tax on the trade value, it can be taxed via the
“Tradecoins”. The Government can collect “Tradecoins” as taxes and use them for their
own needs.
ATUL KHEKADE, 2016
How Private Blockchains can save companies up to 30% of their costs
9. Next Steps
Companies/Investors/Partners with interests in exploring the Private
Blockchain Trade Network can contact Atul Khekade at the following
contact details :
Email : atul dot Khekade at gmail dot com
Phone : +1 415 513 0026
Linkedin :
https://www.linkedin.com/in/atul-khekade-9076b36