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


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

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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.

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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


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


oduction, capacity

unutilized resources, there is scarcity of financial mechanism to connect the supply


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


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


ATUL KHEKADE, 2016


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

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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


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


of it’s executives to travel. The 3 additional members of the team are not approved for travel


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


, 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


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


proved for travel


various industries including airline

Looking to sell software products across

various industries including airlines and

70% occupancy


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


Company C

is a real estate fund/investment trust with one of the largest real estate under


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


is a real estate fund/investment trust with one of the largest real estate under


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


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


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.

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their idle resources against each

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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.

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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



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



network. We could be looking at saving 20% of the global costs or over $10 trillion in

and wasted resources.

ATUL KHEKADE, 2016


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


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

How Private Blockchains can save companies 30% of their costs

Economy & Finance

Transcript of How Private Blockchains can save companies 30% of their costs