A global wake up call is gaining steam for industry to address the rising public concerns over data privacy and transparency. While we may be in the throes of the technology’s hype cycle, I believe blockchain has the potential to answer that call — and transform every aspect of society. Blockchain’s potential is clearly much bigger than cryptocurrency. I predict blockchain will become the next underlying technology platform accelerating innovation and fueling global industry within the next few years.
The distributed ledger technology will make a larger impact on business than the cloud, with the global blockchain market currently projected to reach $20 billion in 2024. But first, blockchain will need to overcome trust, security and utility challenges to realize its massive enterprise potential. The biggest hurdle will be a fundamental requirement for companies across global sectors to adjust business models for blockchain, a monumental shift that will supersede enterprise efforts to embrace the cloud over the past decade.
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Tapping Blockchain to Take Back Control
At its core, blockchain is built to allow users to erase intermediaries from information exchanges and put businesses in the middle of transactions, rather than governments or institutions. Regular people will have the potential to create individual identities within blockchain to connect everything from travel history to medical records to finances to commerce, which would result in a massive shift in the world — let alone the business world.
For the enterprise, blockchain technology returns control over the flow of critical and sensitive data to people building businesses. As IBM’s senior vice president of global industry platforms Bridget van Kralingen noted, the fundamental elements of blockchain’s value proposition — namely openness, transparency and access to data — will help bring the technology to real-world use cases and ensure diverse groups of people work on and benefit from it.
However, there is a growing need for the business world to define what blockchain means for specific industries and to present real-world use cases with global relevance. Understanding blockchain’s applicability for specific industries and applications presents a key challenge for organizations exploring the technology’s viability and impact. This is especially true for small- and medium-sized companies looking to justify significant investments in blockchain technology, development and the personnel needed to realize scalable ambitions.
Blockchain places data owners in the middle of transactions and data transfers, which offers a potential use case for enterprises of all sizes looking to connect diverse elements of their businesses through an accessible, central platform. It also promises to make administrative and back-end business operations — from accounting to HR to payroll — more efficient, allowing executives and personnel to focus on other core parts of the enterprise. The administrative relief that blockchain and connected technologies offer could be the difference between success and failure for young companies that require every cent to invest in people and products to rise above competition.
Meanwhile, global companies like IBM, GE, AIG, Maersk, BNSF and others are currently working to bring blockchain to mainstream sectors, from insurance to logistics and to enterprise operations from legal to B2B sales. In fact, IBM revealed it has at least 400 blockchain clients — spanning international industries and including well-known brand names from Walmart to Visa — alone. These large businesses will need to continue partnering with smaller companies, such as AgriLedger, that have specific technical expertise and forward-looking public sectors around the world in order to fully realize the technology’s value proposition for the enterprise.
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Understanding Blockchain’s Utility will Change Entire Industries
Blockchain is still a total mystery for many businesses. Accordingly, the first step every organization exploring blockchain should take is to understand what it is within the context of their work, and to pinpoint what specific problems it can solve for their company. In order to embrace blockchain, enterprises will need to fundamentally reimagine their business models. For shipping giant Maersk, a dip into blockchain meant partnering with IBM and Agility in order to deploy a working platform that makes complex elements of global supply chain seamless. Unilever is looking to use blockchain to monitor and settle discrepancies with advertising partners around the globe. I view this tectonic shift in corporate mindset as similar to how Netflix introduced a completely new model for bringing movies into people’s homes that challenged Blockbuster and other brick-and-mortar video stores to change or become obsolete.
Businesses nearing the procurement stage will need to consider which blockchain is right from them, whether it be public or private, and which permissions are necessary for specific operations. Either way, blockchain’s inherent ability to package, distribute and secure critical data will be evident. The technology’s selling points will soon come into clearer focus for industry, especially as businesses operating in the European Union work to navigate GDPR, and enterprises around the world increase their reliance on data to rise above competition.
As technological and institutional change increases, a gradual adoption of blockchain-driven platforms, apps and systems will create new foundations for business and societal change. I see an enterprise future in which legal contracts are embedded in digital code and stored in transparent, shared databases, one where these codes are distributed to all trusted parties involved with transactions and protected from deletion, tampering and revision.
If blockchain takes off across the business world, the integrity and security of data would be supported with a traceable footprint that could be easily identified, validated, secured, stored and shared. Ultimately, while different companies and industries will adopt blockchain for their own uses, its biggest contribution will be introducing inescapable transparency and accountability to enterprise dealings — and institutionalizing it in a way other platforms cannot.
Nuno Godinho, EVP of Product Delivery at Sage, is an expert in blockchain and cryptocurrencies. At Sage, Nuno is tasked with envisioning the ways in which blockchain will impact and improve business operations, from crypto payments and more efficient invoicing, to producing a more streamlined supply chain, within Sage Business Cloud.