The blockchain revolution is well underway, extending far beyond financial services. Now, many enterprises are starting to jump on the blockchain bandwagon to achieve a number of benefits that will lead to an entirely new form of digital transformation.
This shouldn’t come as a surprise though, as a blockchain serves as a reliable, almost impossible-to-hack record of transactions, displaying who owns what. A Blockchain is based on distributed ledger technology, enabling secure records of information across a peer-to-peer network. Blockchain ledgers can include land titles, logistics, loans and almost anything of value, which is why the impact can be so great for enterprises.
In particular, blockchain technology can provide enterprises with 3 main benefits – digital trust, faster business processes and financial efficiency. All of this results in an entirely new digital transformation for enterprises.
#1) Digital Trust
The market leader in enterprise application software, SAP, is well aware of the value that blockchain can bring to enterprises. SAP’s Head of Blockchain, Torsten Zube, is focused on initiatives around distributed ledger technology by developing and implementing end-to-end business solutions leveraging blockchain capabilities. In particular, Torsten thinks that the digital trust created by blockchain can help enterprises transform entirely.
“Blockchain is capable of driving digital transformation, as enterprises should view blockchain as a new source of trust that allows for better communication in the digital world,” Torsten says. “For example, with the rise of IoT and machine learning, more people and things are connected, yet often times we don’t know where information is coming from. This is why blockchain is so revolutionary. This technology has motivated the discussion of entering a new data sharing community built entirely on digital trust, where everyone can access data, yet no one actually owns the data. All the data is also highly secure. From a business perspective, this drives discussions on how to optimize.”
When applied correctly, Torsten believes that blockchain technology will accomplish three things for businesses – optimization, a re-imagination of business models, and will ultimately revolutionize the way organizations conduct business. Blockchain has the potential to not just transform business processes, but to change the entire ecosystem.
For example, James Allen Regenor, the Business Unit Director of Transformative Technologies at Moog Inc., just launched a new service called VeriPart. This service combines blockchain technology with 3D printing to create a new level of trust for platform-based businesses operating in regulated industries. One area in particular benefiting from this technology is the aerospace industry.
In a Harvard Business Review article, James described a problem typically faced in this sector:
“How can the maintenance crew on a U.S. aircraft carrier have absolute confidence that the software file they downloaded to 3D print a new part for a fighter jet hasn’t been hacked by a foreign adversary?”
By leveraging blockchain technology, VeriPart has created a new network built on digital trust. VeriPart provides full transparency for aerospace parts, since blockchain technology ensures traceability, history of a part through the design-manufactor-use cycle, authenticity of printed goods and much more.
#2) Faster Business Processes
Blockchain technology can also speed up business processes in multi-party scenarios. Normally, most business processes rely on data from systems outside their control, along with information from other enterprises. Data must then move between organizations, which usually takes time and results in a lack of trust and transparency.
Business processes on the blockchain, however, ensure trust, transparency and speed. For example, supply chains are now looking at blockchain technology to ensure faster, smarter and more secure processes overall.
To illustrate this notion, last year Pindar Wong created the Belt and Road Blockchain consortium to re-imagine business processes for supply chains conducting international trade. The Belt and Road Blockchain focuses on trading non-tangible “virtual” goods to create provable sustainability within supply management chains. Ultimately, the Belt and Road Blockchain aims to make manufacturing a digital business process, built more on demand and less on supply.
“The Belt and Road Initiative provides a rare opportunity to re-imagine what a completely end-to-end digital 'demand chain' process might look like and Blockchain technology ensures cheaper business processes by massively simplifying complex cross-border customs processes,” Pindar says. “For example, the provenance of digital smart locks used on modern containers can be tracked using blockchain to reduce the time needed for customs clearance. As time is money, this is hugely important given that the Belt and Road has potentially 65+ borders. Here, Hong Kong is playing a leading role in designing this new 'soft-infrastructure' to make it better, faster, cheaper and safer to do international trade.”
Other benefits of using the blockchain for business processes include smart contracts, which keep track of each transaction ever made. For supply chains, this can lead to the creation of demand chains, which will ultimately result in more efficient resources. This also helps better track the movement of goods and information across borders.
#3) Financial Efficiency
Another company helping enterprises transform is SophiaTX, a blockchain platform and marketplace for businesses of all sizes. SophiaTX is the first open source platform to primarily integrate blockchain technology with enterprise applications such as SAP, Oracle, and others. 74 percent of transaction revenue worldwide touches SAP systems, and SophiaTX provides a business-appropriate blockchain for B2B collaboration and communication that creates true financial efficiency.
On November 30, 2017, SophiaTX announced a forthcoming collaboration with the power division of General Electric (GE) to design and develop a blockchain solution for GE’s financial efficiency and operations. The initial focus of the collaboration is the design and development of innovative blockchain uses in financial operations, including connectivity to existing systems (such as ERP) and both digital and supply chain applications. The SophiaTX project will also incorporate capabilities to record data from IoT sensors, smart devices and applications.
“Working with a company of this nature and scale allows new and exciting opportunities for our platform,” explains Jaroslav Kacina, CEO of SophiaTX and Equidato Technologies AG. “We believe that the move of blockchain technologies into corporate ecosystems such as this has the potential to transform the way the organizations collaborate and engage with partners and customers alike.”
Adapt or Get Left Behind
Clearly, the potential that blockchain technology can bring to enterprises is great and will result in an entirely new form of digital transformation. From building digital trust, to creating faster digitalized business processes, to ensuring financial efficiency through digital connectivity, blockchain technology is the next phase of digital transformation for the enterprise. And while this technology is still new - and even a bit confusing - it’s best for businesses to start looking at the blockchain now, as this will serve as the technology of the future.