Incorporating Blockchain Capabilities Into Enterprise Applications
Tamal Chowdhury is a distinguished AI Executive and CTO with extensive experience in AI-powered product & platform engineering, cognitive automation, data science, machine learning, and next generation technologies like Big Data, Blockchain and IoT. He currently serves as the SVP & Head of AI and Engineering at Course5 Intelligence, a global digital transformation company
Blockchain has received tremendous hype over the past few years, and the trend continues. New use cases get generated, new investments are poured in, and new Blockchain platforms are built on a fairly regular basis. However, many of these initiatives are at early stages of development, mere proof-of-concepts, or even failed exercises. Enterprises are still far off from adopting Blockchain at a scale at which they have adopted (or are adopting) other path-breaking technologies like Cloud, Big Data, IoT and Machine Learning.
Blockchain, or the broader Distributed Ledger Technology (DLT), is often considered to be the building blocks of ‘internet of value’. This path-breaking technology, along with Artificial Intelligence, Big Data and the Internet of Things, are virtually ruling the global discourse on technological innovation today. There is immense hype around blockchain, some of which may even be difficult to justify. VC Investments are pouring into blockchain (and allied) startups almost exponentially. For example, a TechCrunch report in May 2018 claimed that the VC funding for Blockchain in less than the first five months of 2018 had surpassed the entire VC funding for 2017. Additionally, a large number of corporates, particularly from the Banking & Financial Services, and Healthcare sectors, are investing heavily in Blockchain projects.
The Enterprise Applications space has witnessed massive disruption over the past 8-10 years, primarily on account of two reasons: (a) transition from On Premise to Cloud, and (b) adoption of Big Data Processing. A third disruption is on its way, and that will be driven by the enablement of blockchain capabilities within enterprise applications. However, despite the tremendous benefits that this disruption is likely to bring, it has not received much attention from blockchain developers, corporates and the general public. This article is intended to highlight some of those use cases and benefits.
Enhancing Enterprise Applications with Blockchain
The biggest advantage of blockchain is that it allows for distributed data storage and rules-based processing; but this data cannot be copied or modified, only appended. Incorporating blockchain capabilities into enterprise applications enhance both the scope and the value of these applications. Let us explore the same with four major enterprise applications – ERP, SCM, CRM and HCM.
Enterprise Resource Planning (ERP): At a broader level, blockchain can efficiently capture and store ERP transactions, manage contract conditions in real-time, and deliver ‘transfer of value’ between digital entities. These result in process streamlining, greater transparency, resource optimization, efficient data analysis, simplification of business systems, automation of several tasks, and other benefits.
Supply Chain Management (SCM): SCM is arguably the biggest area (within enterprise apps) that is ripe for large-scale disruption through blockchain. Several companies have already started building use-cases and developing prototypes related to this. The entire network of vendors, partners and customers of a company can be integrated using distributed ledger technology, thereby leading to significant efficiencies.
The biggest advantage of blockchain is that it allows for distributed data storage and rulesbased processing
Customer Relationship Management (CRM): The entire CRM industry thrives on relationships and loyalty, customer journey mapping, and consumer behaviour. Blockchain is a natural technology for enabling the same.
Human Resource Management (HCM): HCM is an area that is often overlooked while defining blockchain use cases. However, there are two major capabilities that blockchain can infuse in HCM applications.
Payroll Management: Blockchain has the potential to transform the global payroll field through smart contracts and distributed ledgers. This is particularly relevant for the Contingent and Gig Economy Workforce, where traditional HCM solutions have been sub-optimal at best. Notably a significant chunk of the workforce of emerging economies are contingent-based, so this is more of an imperative cause for those nations and businesses. Moreover, blockchain-based methods also efficient for enabling global payments in real-time and with lesser costs; so today’s multi-national companies can leverage the same for their payroll systems.
Employee Verification and Record-keeping: Two critical HR functions are pre-hiring and/or post-hiring verification of employee records (academic, certification and employment), and safekeeping of all employee records for the future. On one hand, many HCM solutions provide decent record-keeping capabilities but blockchain-based record-keeping is better. On the other hand, current HCM applications are largely ineffective in adequately addressing the verification needs of companies. Blockchain offers a great means of addressing that gap.
The above are just a handful of use cases where blockchain can make an impact to the world of enterprise applications. There are many others, most of them quite complex. Implementing these use cases will require a lot of R&D and experimentation. There will be some easy wins, but for the most part, there will be challenges. Having said that, the medium to long-term ROI far outweigh these challenges. Moreover, blockchain itself is constantly evolving as a technology. This means that even though some of the use cases might be difficult to implement today, they may be easy to deliver in the near future. The critical point is to identify and study known and unknown gaps in enterprise applications, and address them through blockchain and other top technologies.