Besides Cryptocurrency and NFTs (Non-Fungible Things), Blockchain in the enterprise is the new reality. You and your fellow stakeholders are tasked with evaluating and considering emerging technologies, especially if their potential for disruption could impact the way you will do business. A case in point is the use of blockchain technology as a part of emerging technology innovations.
Whether your organization’s focus is on business-to-business activities or business-to-consumer initiatives, blockchain is worth considering for the new value it can bring.
Interest is growing worldwide in blockchain technology. For perspective, McKinsey recently reported that “a World Economic Forum survey suggested that 10 percent of global GDP will be stored on blockchain by 2027.” It added, “Multiple governments have published reports on the potential implications of blockchain, and the past two years alone have seen more than half a million new publications on and 3.7 million Google search results for blockchain.”
Blockchain in the Enterprise: Investment Priorities
At least 64% of blockchain efforts in enterprises are funded by information technology departments or from companies’ budgets for innovation and research, according to Accenture, whose researchers conducted a recent “Building Value With Blockchain” study.
About three-fourths of survey respondents said their three main areas of interest in innovating with blockchain include:
* Able to completely trace information via the blockchain
* Capacity to verify all data for a project has not been altered, with no evidence of tampering
* Allows companies a new method to distribute information, keeping it immutable
The conclusion is that most organizations are looking to add value to their enterprise with blockchain by enhancing current services, rather than budgeting to create new opportunities with blockchain.
Applications for Blockchain in the Enterprise
Enterprises can apply blockchain technology in three key areas: financial services, supply chain logistics, and market transactions that traditionally rely on intermediaries.
Financial Services: Electronic Markets says that blockchain technology is poised to transform traditional ways of handling financial activity, mainly in bank transfers, auditing and accounting: “Blockchain enables cross-border transactions in a short amount of time without having to account for currency exchange fees. Those characteristics disrupt traditional business models in the financial industry.”
Supply Chain: What may be most promising for blockchain is its application for the supply chain. “The formal register of the blockchain enables every member of the system to identify and track the possession of a circulating item throughout the supply chain,” noted Electronic Markets.
In industries categorized as two-sided markets, such as in the publishing and entertainment industries, blockchain brings value to enterprises by removing the need for third parties.
Examples are intermediaries such as Amazon, Google, and Uber, which develop platforms to facilitate work between parties. “Such technological change drives disintermediation and decentralization of transactions between members of the system,” per Electronic Markets. “Simultaneously, it eliminates centralized risk, low efficiency, and high transaction costs.”
Tracking on a Global Basis
The international market will increasingly depend on blockchain for managing the exchange of goods.
Gartner predicts that “by 2023, blockchain will support the global movement and tracking of $2 trillion of goods and services annually.” It reported that IT professionals will feel more pressure to adopt blockchain within five years either because their work demands it or because a rival company has already begun using it.
Benefits of Deploying Blockchain in the Enterprise
Depending on the nature of your enterprise, you may focus on using blockchain to lower fraud, lower costs or stop relying on third-parties to get involved in transactions with entities you do not trust.
Global Cloud Team examined the technology and determined that “from a business point of view, blockchain is an exchange network for making transactions and transferring assets between equal partners without intermediaries. This means reducing costs, for example, on the execution of contracts, and increasing security, and eliminating fraud.”
Since blockchain ledgers contain the details needed to double-check the accuracy of transactions, you can use them instead of spending time with regulators. The result is being able to monitor financial transactions as they occur while lowering costs of auditing, reviewing, and checking up on each transaction from the historical record.
Blockchain Use Cases for Enterprises
Reviewing how various organizations harness blockchain technology can help inspire its use within your organization, or at least give you an idea of what’s possible if you are still determining whether to deploy it.
To promote discussion in your ranks about potentially adopting blockchain in your enterprise, consider the following examples of use cases. From protecting food safety and supply chains, helping with venue ticket sales, and enhancing fraud prevention, these examples can stimulate new ideas that you can use in your company today.
Businesses must rigorously maintain food safety standards, especially in a global economy with many inputs throughout the system, from raw materials straight from the farm, to products that become increasingly refined and processed as they move their way through the system to the point of purchase.
Before food products go on sale as meals in restaurants or as products in a supermarket, they need to have tracking information that follows along with them. With blockchain’s ledger, companies can feel confident in the information they’re gathering and tracking to maintain food safety. ZDNet reports that with blockchain, “it now takes Wal-Mart 2.2 seconds to trace any of their food products back to the exact farm.”
As for restaurants, the report continues: “In another example, one major fast-food retailer uses blockchain to track the temperature of meat as it moves along the supply chain from farm to restaurant.”
Forbes touts the decentralized aspect of blockchain making it ripe for adoption, noting, “Blockchain removes the need for middlemen in many processes for fields such as payments and real estate. In comparison to traditional financial services, blockchain facilitates faster transactions by allowing P2P cross-border transfers with a digital currency.”
What’s more, Forbes indicated that blockchain delivers value by improving property management efficiency, as it allows for smart contracts to automate agreements between landlords and tenants, with a single system for verifying ownership of properties that all parties can access as needed.
Auditing and tracking the movements of goods is enhanced when you use blockchain. “With the blockchain ledger, each time an exchange of goods is recorded on a Blockchain, an audit trail is present to trace where the goods came from,” explained Forbes.
“This can not only help improve security and prevent fraud in exchange-related businesses, but it can also help verify the authenticity of the traded assets.” For example, think of the efficiency and added safety that comes from tracking medicines through the supply chain as they go from the manufacturing facility to a central distributor, thanks to storing the details in blockchain for quick and easy access.
Or, for cultural investments that increase in value over time, such as paintings or sculptures from an up-and-coming artist, blockchain gives buyers unmistakable proof that they own the works of art in question.
This illustrates the wide range of benefits in tracking items being sold while maintaining a ledger storing the salient details, that all parties can access for insight into where goods are moving.
Deploying Blockchain in Your Enterprise to Boost the Bottom Line
Blockchain presents many opportunities to disrupt the usual way you’ve been doing business. In addition to its use as a cryptocurrency, blockchain technology’s function as an immutable ledger can help you eliminate the middleman.
That’s ideal, such as when dealing with financial transactions that cross country borders, arranging for unalterable contracts, or keeping track of items as they transition through your supply chain. The prospect of adding value to your company by harnessing blockchain technology means it deserves your team’s consideration for deployment.