Blockchain is one of the hottest tech trends and an increasing number of companies are starting to realise it has potential for them. Recently, many organisations have associated blockchain with the cryptocurrency sector and didn’t really think it had near term potential impact for their business. A number of enterprises are realising that blockchain, in fact, offers a far wider range of applications and business benefits than simply crypto markets.
The most obvious benefits are for the financial industry simplifying international payments, remittances and complex financial processes. We now know blockchain can solve many challenges and create new opportunities for industries such as logistics, IoT, healthcare, media and entertainment, oil and gas, agriculture, law, defence, luxury goods and many other sectors.
In fact, Gartner predicts that blockchain’s business added value will grow to over $360 billion by 2026, then surge to more than $3.1 trillion by 2030.
This means businesses are starting to pay more attention to this emerging technology and early adopters are finding ways already to reap its benefits.
As a result, CIOs are under increasing pressure to understand and guide their companies in implementing blockchain to drive efficiency, productivity and market competitiveness.
So, what are the main benefits of blockchain businesses should harness?
The immediate advantage blockchain provides is increased transparency, privacy and security. Blockchain is a sophisticated algorithm that stores and encrypts data, creating immutable records in the process.
This is a massive asset for security and privacy. Because there is no central point of vulnerability companies can better protect their data and lower the risk of data leaks and hacks as well. Considering how many world-renowned corporations have reported data loss incidents and malicious attacks lately, blockchain’s security advantages are more important than ever in an ever-changing threat landscape.
From a privacy perspective, by using blockchain companies can ensure that no other commercial or governmental entity can ever access or manipulate their data without their consent.
At the same time blockchain enables companies to easily trace transactions and operations. This is particularly useful for organisations with large logistics and supply chains. With blockchain companies can track the movement of goods, their origin, quantity, quality and so on, simplifying processes such as ownership, transfer, production, authenticity and payment.
If an irregularity is detected somewhere along the supply chain, blockchain systems can easily pinpoint the origin and businesses can carry out investigations and take the necessary actions.
Many commercial relationships have been damaged by human error and lack of transparency. By using blockchain for payments, businesses can remove any guesswork, human error and avoid delayed transactions and financial losses.
Furthermore, because each transaction is recorded sequentially and indefinitely, companies can easily provide an indelible audit trail for each transaction, operation or asset. In this way, the audit process becomes much more efficient and faster.
Additionally, companies can access data regarding any potential issues in real time and they can address any potential problems as soon as they arise.
Paperwork, Data and Storage
By using blockchain businesses can also increase agility and efficiency.
Nowadays, companies generate huge amounts of data and manage countless transactions and operations externally and internally.
With some blockchains, businesses can manage billions of transactions with sub second finality. Of course, not all organisations need this much capacity but it’s encouraging to see how quickly blockchain is scaling to meet the needs of the enterprise.
Many companies still use paper heavy processes which are time consuming, prone to human error and lack transparency. Blockchain streamlines and automates all these processes, enabling organisations to become more efficient and agile.
Because transactions and data queries are validated and completed faster, companies can increase competitiveness and significantly improve the customer experience.
At the same time, the cost of storing all this data and processing endless transactions is significantly lower than traditional storage options.
Another area where blockchain helps businesses reduce cost is third party transactions which can be all but eliminated, streamlining many organisational processes and increasing transparency.
A recent report by Bain and Company estimates that the savings from the implementation of blockchain technology would amount to somewhere between $15 and $35 billion annually.
Fully automated legal agreements known as smart contracts is a major area where blockchain will change the way organisations operate for the better. Companies can now automate any legal agreements and documentation that need signatures and approval from multiple parties without the involvement of humans that are usually the cause of delays and errors.
Smart contracts can have a significant positive effect on cash flow as well. Rather than waiting for several layers of authorisation when the invoice is issued, smart contracts can make immediate automatic payments as soon as a transaction is completed.
And these are only some of the core benefits of blockchain for businesses. Considering that the technology is still being perfected and the sector is growing by the day, many more new opportunities for businesses are being uncovered to increase productivity, performance and profitability.
One thing is clear – blockchain isn’t a pipedream. Applications and services are available already, many of which are fast, flexible and secure and are starting to improve many business functions.
The companies taking advantage of this technology can gain a significant competitive edge and organisations that choose to ignore it risk being left behind.