If you are in supply chains or finance, banking or legal, if you are dealing with any kind of transaction which has at least two parties involved and if you are dealing with data that is simultaneously being looked at and modified by a range of constituencies, you can be sure that the new disruption brought in by Blockchain technology will be impacting you.
First of all the biggest challenge with all transactions that the world does is that it is somewhere centralized and large hordes of people have to go down that well to be able to clamber back with the data they need to either modify or share or make use of. Think of stock trading for example and you are at the mercy of an exchange with some intermediaries who connect you with other constituencies who hold stocks or bonds that you want to transact in.
Think of the transactions that happen across global supply chains; if you are Apple you have at least forty countries from where your supply of inputs are being organized (but centrally done) and then these inputs must be logistically moved to where the ultimate assembly would be done, the final product in turn would then move back to U.S. to be warehoused and shipped to customers across the globe. The transactions between hundreds of suppliers is centrally orchestrated through some central databases and every time every actor has to make a change or a modification it would need both sides of the transactions to be audited by a maze of intermediaries.
Let me take this example and make it more mundane. Every organization does transactions between two or more parties and the data is centrally located in some repository for any kind of retrieval. The original parties who did the transaction cannot actually alter or modify or add anything unless others in the organization are involved, like accounts or shared service center together with other agencies like audit who follow the trails of these transactions. The original actors either on the supplier side or the buyer side have very little to do with this data and have to depend on data store houses to be able to access and retrieve any data that may be of use to them.
Clearly the guys who need the data access are the only ones barred from the use of the data, such are the woes of centralization of data.
The Block chain technology starts to challenge this paradigm and it gives the power of data access with an impeccable degree of correctness and transparency that it achieves with the decentralized data. In fact the beauty is in the forceful trust that two actors on both sides of the transaction want to achieve so that they can continually populate the data base whenever they want to choose without going through any other intermediary.
Think of simple Google shared drives and Google sheets that we use to populate data by the simultaneous interactions of various constituencies such that every actor is able to see the changes made in the data and the correctness is automatically ensured.
Google sheets and shared drives is the simplest form of Block chain technology, at least in principle it acts to make the data be drawn away from any kind of centralization or authority and everyone becomes an equal partner to see and modify any data.
The success stems from the trust it builds in enabling two sides of every transaction to be an integral part of digital repository of knowledge which will be put to further use in the future.
This ends the role of intermediaries in stock trading for example or even in any kind of trading where original buyers and final users can come together to be part of a colossal networked world of digital transactions where every ten minutes every change will be recorded and seen by multiple agencies who are in any way connected with the transaction.
Legal contracts also follow the same pattern where multiple agencies have to get connected with centralized pool of legal repository for doing any business that is connected with the next step in their contracts; block chain will enable these parties to get connected in a decentralized form to further their transactions into the future.
The old world of enterprise planning with partitioned walls that follow the functional pattern of doing business so that specific efficiencies could be mustered are falling apart. For all you know the new world of block chain would enable the next transactions to be coordinated between suppliers and partners without any other parts of the organization getting involved in the data warehousing, storage and security.
What this simply means is that the server you use for storing the supplier transactions in your central data warehouse will be made redundant, the supplier will just be connected to your internal buyer through a network of decentralized computers.
The productivity benefits and the speed of transactions, going by these two simple things, is enough to make this new paradigm worth exploring.
Block chains are already at the doors, let us see how best to use this technology.