Enterprise blockchain is needed for the same reason as public blockchain – the world of trust has changed and we live in a ‘trustless’ World.
Enterprise organizations are complex and global – they span many divisions, teams, and entities internally AND they span many different external partners and organizations.
An enterprise network spans a significant number of different ‘parties’, the majority of which do not trust each other. Even intercompany is a trustless world – even though you are part of the same group company, you are still governed and incentivized by different people and leaders.
Outside the internal network, trust is extremely low – even though these organizations are your partners, you still do not fully trust them.
Characteristics of enterprise blockchain
There are a number of key characteristics of an enterprise blockchain organization:
1. Global – organizations which span different countries and often span the entire globe.
2. Scalable – these organizations require solutions which scale to their needs which often involve millions of transactions.
3. Secure – these organizations often deal with large volumes of private data related to people and property.
4. Speed – these organizations work at speed, and they often need to process their transactions at speed and with accuracy.
Enterprise organizations, with these characteristics, need to use an enterprise blockchain for the above-listed reasons.
Why use enterprise blockchain?
You may wonder why you need to use enterprise blockchain, as there are many reasons as to the general benefits of blockchain. For enterprise organizations, the challenges are bigger and more complex – the need for a different type of blockchain is important.
The world is changing fast, and digital transactions and technology are advancing quickly. This is causing unprecedented levels of competition – from existing organizations and new organizations who can grow and scale fast in the new world.
Adopting enterprise blockchain technology will allow an organization to compete with the new entrants to their world and help keep them ahead of their competitors.
The following are main pain points your organization is experiencing and where enterprise blockchain will make a difference.
- Enabling trust in business to business transactions, both internally and externally
- Reducing or avoiding the cost of intermediaries, which can add significant costs in a highly competitive world
- Avoiding the risks of intermediaries, which can slow down process or worse, allow data breaches or other risks to occur
- Reducing the manual, human error-prone information exchange and processes across enterprise systems, both internally and externally
- Reducing the high cost and delays of offline reconciliations, which slow down analysis and decision-making
- Removing the poor auditability of records due to cross system discrepancies and reconciliation issues
- Reducing the high risk and cost of fraud in cross company transactions
- Eliminating the lack of real-time information visibility within a trading ecosystem
Where to use enterprise blockchain technology
Blockchain technology is not a solution for every issue in your organization, so a great place to start is by asking yourself these questions – if you respond yes to most of these questions, then you need to look at implementing Blockchain technology in those areas affected:
- Is my business process mainly multi-department and cross organizations?
- Are there cross system discrepancies which slow down decision making?
- Is there less than full trust among transacting entities?
- Do my processes involve intermediaries – charging fees and adding risk or delay?
- Do my processes require periodic offline reconciliations?
- Is there a need to improve traceability or audit trail?
- Do we need real time visibility of the current state of multi-party transaction?
- Can I improve a multi-party business process by automating certain steps in it?
There are many more questions to ask, but if you start with these, you will begin to establish which processes and business areas would benefit most from Blockchain technology.
The next 20 year transformation
Over the last few years, we have had many transformations – BPO, digital transformation, six sigma – and all of these have transformed the competitive landscape. We are now entering the next stage of transformation.
I would argue that we are at the start of the next 20-year transformation cycle – blockchain technology will allow organizations to completely transform their entire business. I am not saying blockchain technology will transform every business process, I am saying that the adoption of blockchain technology will transform many parts of your organization, and this will transform your entire organization.
If the benefits of blockchain technology can be harnessed effectively, businesses will be able to transform their current back end systems and gain significant efficiencies and benefits.
The complexities of large enterprises have grown exponentially, as they have developed new systems to keep up with the pace of change in the customers’ world. This has led to many large, complex, and unwieldy systems, which now slow down the enterprise and act as an ‘anchor to growth’.
The entire complexity of enterprise systems can be simplified, and in some cases automated, with blockchain technology. This will allow the enterprise to concentrate on its customers, and ensure that they are continually meeting or exceeding the customer expectations.
Total business transformation led by blockchain technology
Blockchain technology will transform many parts of an enterprise, and these changes will help to create a culture of change throughout the entire business. The changes will affect all areas of your business, and this will help to transform the culture and the people working within your organization.
One of the fundamental blockchain concepts regards the sharing of data and transactions – currently, in most organizations sharing data is often complex, inaccurate, and time consuming. Data is often not shared for these reasons, and yet if we had the accurate data needed for our jobs, we would no doubt be able to perform much better in our roles.
If blockchain technology helps the sharing of accurate data, I would suggest that your organization would be able to make better, quicker, and smarter decisions – decisions in all areas of the business which will have a positive effect on the business performance.
This is an edited extract from Commercializing Blockchain: Strategic Applications in the Real World by Antony Welfare (Wiley, 2019).
About the author: Antony Welfare is an eminent leader in the world of blockchain, dedicated to helping others understand the transformational potential of blockchain technology and implement it, particularly in enterprise organisations. As Group Managing Director of Luxoft, a DXC Technology Company, Antony is leading the strategy to deliver enterprise-grade blockchain solutions across all sectors, and using various leading-edge blockchain solutions, including Hyperledger Fabric, Indy, Corda and Ethereum.
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Enterprise organizations are complex and […]