Blockchain technology finally seems to be passing its initial hype phase. It is finally beginning to gain a foothold in the real world due to a combination of increasingly realistic expectations, cautious yet growing investments, and feasible proof-of-concept stage applications. Despite the technology’s growing trial and adoption, it is constantly being emphasized that the fullest potential of blockchain can be achieved primarily through wide, completely decentralized platforms spanning entire regions, industries, and economies. However, establishing such widespread networks for the technology requires us to overcome the challenges to mainstream blockchain adoption such as the governance and regulation conundrum, not to mention the scalability issue. This means global scale applications of blockchain are still some time away. But this hasn’t stopped organizations from testing blockchain to enhance their business processes. Businesses across the globe, especially leading organizations in various industries with the requisite funding and vision have already tried implementing enterprise blockchain — blockchain networks that are controlled by the organizations themselves.
Enterprise blockchain: a brief introduction
Contrary to the popular, fully decentralized version of blockchain that we are all very familiar with, enterprise blockchain networks are usually created and controlled by individual businesses or consortia of related business. These networks are used by the owners for improving their internal business processes through the decentralization, immutability, and transparency offered by blockchain. Usually, these blockchains are not decentralized (at least not fully so) but are private networks of devices centrally controlled and governed by the parent organization or consortium. For instance, a bank with a multinational presence can create a blockchain network comprising of all its regional computing centers to transfer information between them or to facilitate funds transfer exclusively for its customers across the globe. Or, a consortium of the big players in a specific industry, say the healthcare industry, can create a common blockchain platform to share and store information for mutual use and benefit. There already quite a few use cases demonstrating the viability of enterprise blockchain and its benefits.
Enterprise blockchain: the use cases
Following are a few use cases that CIOs and technology leaders can consider to incorporate blockchain into their organizations.
1. Supply chain visibility
Most businesses, especially those operating in industries such as manufacturing, automotive, food, and agriculture, function as part of supply chains. Keeping track of components, raw materials, agricultural produce, etc. can get complicated by virtue of sheer volume, variety and the number of sources that are involved. Businesses can use blockchain to trace the flow of materials in a reliable, immutable manner using blockchain networks. Parts can be tagged and traced at every stage of the supply chain, enabling the businesses to verify the source of every part. Each product can be traced back to its earliest source, even for the smallest of its components, using blockchain. An example of this use case the use of blockchain by IBM and Walmart to ensure food safety by tracking the source of every item.
2. Vendor relationship management
Transactions between partners, just like the movement of parts and material between supply chain partners, can get complicated. Transactions can be hard to track and sometimes, even hard to process without losing efficiency. This is because there are numerous parties involved in these transactions, and even more intermediaries to facilitate these transactions. Using blockchain-based transaction systems can enable these businesses to streamline their payments processes. The enterprise blockchain-based transaction systems can enable businesses to pay their vendors directly without the need for intermediate agents such as third-party banking institutions.
Partner businesses can also use smart contracts to execute payments based on mutually agreed conditions, such as the delivery of ordered goods. This will ensure that all payments are not only carried out automatically but are also documented in an easily traceable manner. This record of transactions is also immutable, eliminating any chance of manipulation, fraud, and foul play. This trustless system of vendor management also enables businesses to establish partnerships with a larger number of vendors and partners without needing to even know them, as trust is an intrinsic feature of the enterprise blockchain system.
3. Customer information security
The need for securing the privacy of customers by ensuring the confidentiality of their personal data is not only being vehemently demanded by customers, but also required by regulators. Laws like the GDPR in Europe and HiPAA in the United States require organizations to have the personal data pertaining to their customers and patients (in case of healthcare organizations) stored in a highly secure manner. The data must be kept in an anonymized manner to prevent compromising every individual’s identity.
The use of blockchain to store and retrieve personal information can ensure anonymity and privacy of customers. Healthcare CIOs can consider the use of blockchain to store patient health records and other patient-related information in an encrypted manner with the use of cryptographic hashing. Healthcare organizations have already begun exploring blockchain EHR applications to secure patient data.
In addition to securing patient and customer data, businesses should also consider storing employee information on enterprise blockchain networks, as data privacy laws are also applicable to the data pertaining to organizational employees.
4. Identity and access management
Identity and access management is a key security function in business management, which involves protecting data from being accessed by those not relevant to the information. This means creating and managing identities for personnel with differing levels of access to different kinds of data, and ensuring that there is a system to prevent specific people from accessing specific data. A blockchain based system can be used to manage the identities of all employees of an organization in a secure manner. The blockchain can be used to create immutable access logs where every instance of any individual member accessing a specific piece of information is recorded on the blockchain ledger. This ensures there is a record of all access attempts for sensitive information, deterring personnel from accessing data that is irrelevant to them.
5. Loyalty and rewards schemes
Businesses can use enterprise blockchain networks to provide exclusive services, functionality, and rewards to their customers. Loyalty schemes based on redeemable loyalty points can be executed on blockchain networks to smoothly facilitate the process of assignment and redemption of loyalty benefits. Using a blockchain to facilitate can minimize the need for customer ID verification during every interaction within the context of loyalty programs. This makes the execution of loyalty and rewards programs highly efficient, saving costs and time for the business. Additionally, the ease of earning and the convenience while spending loyalty points enabled by the blockchain will help in further pleasing and retaining customers.
In addition to giving the implementers of these use cases the early adopter advantage, applications of enterprise blockchain will expedite the overall development and refinement of the technology. The increasing number of proof-of-concept cases of enterprise blockchain will add to the evidence of blockchain’s potential feasibility and benefits, leading to further investment, trial, research, and improvement. This will trigger an iterative cycle of growing blockchain adoption, eventually leading to the realization of even the most ambitious of blockchain projects.
