Answering These 3 Questions Can Help You Decide
By Camille Diges
Blockchain is all the rage. Everyone is talking about how it can benefit and streamline business.
So you may be wondering if blockchain is right for you. And you probably have a lot of questions that need addressing before you determine the answer.
These three questions can help you assess any blockchain proposal. They will arm you with the intelligence to ensure any blockchain efforts you pursue add value to your organization.
1. Does your proposed blockchain project involve multiple parties that would benefit from greater trust and transparency?
Blockchain gives multiple parties access to a decentralized ledger. And it ensures stored data can never be changed or deleted. Data is therefore available and auditable in real-time.
Every person or entity with access to the blockchain works from a single source of truth. That greatly reduces errors, miscommunication and misunderstanding. With complete visibility into the blockchain, participants can seamlessly identify and immediately act upon any issues or problems that arise.
Multiple parties can mean different things to different organizations. For example, a global company might establish a blockchain to support an internal supply chain that crosses various departments or facilities. A firm that employs contract organizations can leverage a blockchain to track raw material receipt, manufacturing activities and logistics. Companies also can use a blockchain to facilitate transactions with various vendors and partners.
In each case, the information contained within the blockchain is critical to the delivery of physical or virtual products. By providing a real-time immutable transaction history, the blockchain resolves issues that may exist with regard to data sharing, tracking, compliance and authentication.
2. Do the parties involved in your business process have different end goals or incentives that are causing friction and preventing optimization?
It would be ideal if everyone in a multi-party process operated under the same goals, expectations and incentives. But that is often not the case. For example, a supplier may take shortcuts in testing or qualification to meet deadlines, resulting in the supply being unknowingly degraded. A blockchain system would record deviations from testing and quality assurance. This enables you to contact the supplier immediately and inquire about the status and quality of your product.
When parties are operating under different rules and priorities, it is natural that conflict will arise. This can lead to mistrust that results in time delays, cost increases and mutual frustration. A blockchain can bridge the gap between parties by offering real-time visibility into business processes, data and transactions. The blockchain therefore enables a fact-based discussion and helps stakeholders avoid confusion and misunderstanding.
For instance, a blockchain that incorporates smart contracts can ensure that payments are made immediately upon completion of an agreed-upon activity or service. Similarly, the smart contract will not execute payment if an activity or service is not handled appropriately, raising an alert in real-time that an issue must be addressed.
3. Will your business process benefit from shared governance and common processes to comply with binding rules and regulations?
Industries across the board are governed by strict rules and regulations. But complying with rules and regulations is just part of the challenge; companies must also prove compliance at a moment’s notice if and when they are audited. For example, a fish supplier might need to prove where its fish were harvested, whether sustainable fishing guidelines were adhered to and whether the people actually doing the fishing were treated ethically.
Additionally, permissioned blockchains can be configured to control access regarding who can see what information. This prevents competitors who are part of your distributed ledger system from seeing sensitive information, such as sales numbers and competitive market information. The permissioned blockchain enables you to share the information that is crucial to improving your business processes without exposing information that would be damaging to your business if made public. At the same time, complete access can be granted to neutral parties, such as auditors, to ensure compliance with regulations.
Blockchains are not standalone entities but require integration with existing business processes, systems and partners. So if you decide to move forward with blockchain, you will need to bear the following in mind:
Employ change management principles. When you implement blockchain, you will be replacing a centralized model with a decentralized model. While the introduction of transparency provides needed insights, it may also disrupt the status quo. Disintermediation may occur and new ways of communicating and collaborating will need to be formalized. You will need the concurrence of all parties involved.
Address holistic security concerns. Even though the information recorded on the blockchain is secure and immutable, the deployment within your enterprise still needs to be secured to prevent hackers from recording, altering or falsifying data on the blockchain.
Ensure availability of skills and resources. Given the impact that blockchain can have on an organization, it is important to ensure that your core team has the skills and experience not only in building blockchain, but in system integration, security and industry expertise. You can also take advantage of the expertise and experience of trusted partners.
Camille Diges, PhD, is the Global Director for Life Sciences at Unisys. She brings over 15 years of experience and expertise in this space and has led teams focused on pharmacovigilance and data analysis, besides driving delivery and fulfillment for pharmaceutical, biotechnology and medical device clients. She has a PhD, Biochemistry, from the University of Colorado, Boulder, and a BS in Chemistry from the University of Pittsburgh.