Blockchain technology is continuously improving and developing, and it’s here to stay. It might have seen its first application with the advent of cryptocurrencies like Bitcoin, but its real potential lies in its ability to transform the business landscape as we know it.
What's Blockchain, You Ask?
Basically, blockchain is a digital ledger that currently is used to track, record and store transactions on blocks. When applied to business, these same blocks of data have the potential to perform any type of sale, goods exchange, contract, payment, monitoring or recording.
As this technology becomes fine-tuned over the coming decade, companies will start to integrate blockchain more and more into their processes and business relationships. And with so much potential on the horizon, it’s worth taking a look at how exactly blockchain technology can transform business.
Changing the Way Companies Track and Record the Supply Chain
Stored blocks on blockchains produce numerous copies of a ledger, which then move across multiple computers (nodes). With this new type of recordkeeping, every transaction has maximum transparency and can be tracked by each side involved in a deal.
For example, Walmart teamed up with IBM’s blockchain in 2017 to trace and monitor products it imports from China, such as pork. Blockchain allowed Walmart to track and record the source of each portion of meat globally, including where it originated, where it was processed and stored, and its sell-by-date.
In fact, as reported in a September 25, 2018 article in Retail Info Systems, Walmart and Sam’s Club have asked their providers of leafy greens to apply blockchain tracking technology to all of their produce.
The benefit? In a letter to suppliers, Walmart stated that by using the IBM Food Trust network which relies on blockchain technology, it has shown that it can reduce the amount of time it takes to track a food item from one of their stores back to its source in seconds, as compared to traditional methods' days or sometimes weeks. Other companies like Nestle and Unilever are also planning to use blockchain in the same way.
Unquestionably, one thing is clear—blockchain's sophisticated level of monitoring and tracking supply chains is changing business across industries, probably forever.
As long as we're on the subject, you might find our On The Brink podcast with Marton Ven relevant. Marton is Chief Marketing Officer for TE-FOOD International in Germany which has become a world leader in the application of blockchain technology to the food industry. Grocery shopping will never be the same. Hear why!
Redefining Business Relationships with Smart Contracts
Smart contracts are another feature of blockchain technology which will significantly influence business relationships and the way organizations interact with one another, ensuring and enforcing a standard of quality in goods and services that are exchanged between companies.
These types of crypto contracts currently control transactions of digital currency. However, when translated into business use, they also form an agreement between two sides, finalizing pre-determined conditions before payment is issued to complete the transaction.
For example, if one company hires a supplier or service provider on a project, it can set up conditions regarding quality, material, deadlines and any other commitments using blockchain. Upon delivery, the receiving company inspects the purchase, and if accepted, issues the payment to the subcontractor. Thus, smart contracts protect each party, and if necessary, forcibly transfers funds to the wronged side.
The most prominent application of this standardization is already taking shape in Australia’s real estate industry. The Australian government is taking steps to regulate real estate documents by incorporating smart contracts and conditional confirmation via blockchain.
To get up to speed fast, read this blog: Absolutely, You Must Join the Shift to Blockchain!
Increased Security Will Open Up the Market
So, why is blockchain the hottest thing in business today and only getting hotter? Primarily because of the security it provides. The basis of its technology is cryptography, which is the main reason it's becoming so prized by business because of the degree to which it can improve data protection and security.
With blockchain, every cryptocurrency transaction gets placed in a block which links to a previous and forthcoming block to form a chain (hence the term blockchain). This security encryption prevents hacking and fraud, which makes it the safest form of digital payment and information storage.
By using blockchain, organizations can now more easily expand globally because they can source partners around the world while maintaining a safe flow of information and protecting payment via cryptocurrency.
Across industries, corporate anthropologists are predicting that as the fear of doing business with distant organizations is removed due to blockchain, companies will take more significant risks to succeed in the market because they now feel they can more fully trust complicated transactions and the people implementing those transactions. With blockchain systems, today's smart contracts and track-and-trace capabilities reduce yesterday's uncertainties. Nowadays, what you see is what you get!
Indeed, psychological and social changes like these in the business world will very likely bring the rise of a new open market space where competition will drive quality, and where partnerships develop across continents and national lines. Businesses and their consumers will expect a higher standard of products and services, and with blockchain security, they will get it.
Are You Ready For The Changes That Are Coming Now?
Blockchain might still be in its infancy, but it is quickly transforming business as we know it. Yet, at Simon Associates Management Consultants we are continually surprised at how people typically flee or fight the idea that something new is coming, like blockchain. Instead, they should be building corporate cultures that embrace change! Is this you?
Rather than ignoring what's coming, you need to adapt your organization to meet the changing landscape in your industry. That means you must change. This is hard because the way you have always done things is embraced and reinforced by you and your staff every day. But very soon, those old ways will no longer work and if you continue to cling to them, you'll quickly be left behind.
We know, people's brains hate to change. Yet, blockchain's smart contracts, better security and sophisticated track-and-trace systems are what will allow your organization to expand and sustain growth in these fast changing times. In this case, change is good!
As we work with clients, we keep wondering why culture change is so hard. Perhaps it is even more important in today's business environment to solve problems with customer-centricity. Your customers are asking for you to lead them, not wait for them to leave you for another, better solution. Don't wait.
Yes, indeed, it’s time to rethink your business strategy and plan for the future. At Simon Associates Management Consultants, we specialize in helping organizations like yours adopt blockchain technology so you can grow and thrive in today's fast-changing business landscape. We can prepare you for this significant shift, and provide innovative solutions to allow your organization to succeed. Contact us, and discover how we can help you embrace blockchain, not flee from it!
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