We all have heard at least one description of what blockchain is, and perhaps that description had something to do with money or cryptocurrency. But, blockchain technology has broader applications than cryptocurrencies. In the future, blockchain technology could be a part of many everyday business-to-business transactions, including those powered by enterprise applications.
There are many use cases discussed and it can be hard to make sense of them all, but let’s look at the following four scenarios that can bring value to businesses. These four scenarios of how blockchain could work within enterprise applications to provide more flexible, secure, and streamlined business processes—or even enable new business models.
Enable distributed, autonomous marketplaces
Blockchain allows asset owners to track and trade things of value—such as outstanding invoices—in a secure, transparent, private, and self-reconciling “chain” of transactions. This capability adds speed and flexibility to cash and asset management. For example, using verified invoices from enterprise resource planning (ERP) applications, companies could raise needed cash quickly or accelerate cash flow by selling invoices on an autonomous invoice-factoring marketplace.
Autonomous marketplaces for other assets likely will multiply. Essentially, a blockchain-based transaction does away with the need for third-party oversight because the software itself is a controlled and open framework that is visible to all transaction participants. Thus, organizations can view their assets multi-dimensionally in terms of value; instead of just face value.
Reduce friction in business transactions
Managing spending is a challenge in most organizations. Look at these statistics from Ardent Partners CPO Rising 2016:
a) Less than half (45%) of spend is contract compliant
b) Only 39% of addressable spend is sourced
c) Only 63% of spend is linked to a purchase order
Alternatively, enterprises could create a self-governed blockchain network for suppliers and partners. This could enable automated smart contracts, instant payments, and Internet of Things (IoT)-activated shipments. Without human interaction, errors and missing information are reduced across transactions, and transactions happen faster because buyers and sellers are now directly connected.
Manage and secure decentralized private records with encryption
One of the fundamental features of blockchain is that each individual data record or element is encrypted. Traditionally, industries rely on third parties to guard databases of their shared information using firewalls and restricted access. As frequent high-profile data breaches demonstrate, this practice is not working anymore.
But, if each data element is secured and encrypted with a blockchain member’s key, a cybercriminal would need to have access to each key of each member to access all of the blockchain data. This is not to claim that blockchain makes all data 100% secure, but it certainly can help to prevent the exposure of large numbers of private records in a single act.
A logical application for this example could records kept by employers and educational institutions. Not just even they but even industry certification bodies can add new qualifications, grades or work positions as they are obtained. Imagine giving an employee a key for access to all his or her employee records as part of a secure blockchain that human resources (HR) also participates in. Individuals would be able to share their college transcripts or employment with employers or other educational institutions securely and not rely on faxing copies of certificates that are unreliable and easy to forge.
Tracking the provenance of products and materials
These are just four of many more ways to use blockchain technology. We all need to take some time to learn about blockchain, and then consider pilot projects that can add value in our business. In some cases, using blockchain will require building new business processes or reconstructing existing ones using cloud applications. But it is a flexible technology that could benefit any industry.
It will take some time for blockchain to be present in a large percentage of technology stacks, but technology providers are building paths for easier ramp-ups of blockchain initiatives when customers are ready.
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