COVID-19 blindsided us all.It impacted not only industries, but also entire economies across the globe. Recovery will be a slow, ongoing effort, but the most forward-thinking business leaders will use the lessons learned during the pandemic to start preparing for the next major disaster.
COVID-19 taught us that preserving business continuity often requires more than a simple change of location — and also that extensive adjustments to existing supply changes can cause delays that drag on for months. When the broader United States healthcare system found itself grappling with COVID-19 in mid-March, for instance, PPE became incredibly difficult to come by. Meeting the vast demand required a massive increase in manufacturing efforts, proper quality assurance of the end products, and accurate information about availability and lead times to deliver what frontline workers needed.
This highlights a common problem in that supply chain transparency is often lacking. However, blockchain technology offers ways to make processes more transparent and efficient than ever before by providing end-to-end visibility and transparency within those supply chains. Case in point: When working with a blockchain network called Trust Your Supplier, more than 500 buyers and suppliers joined in order to make the PPE procurement process smoother and safer for everyone involved. The entire network was built on trust first and foremost.
Preparing for the Inevitable
These issues might become less urgent once the pandemic has subsided, but they’ll quickly rush to the forefront again when the next disaster strikes. It’s not a matter of whether that next shift will happen, but when. For companies around the world that want to be better prepared in the future, having blockchain as part of an overall digital strategy can help you achieve the following:
Unlock new business models and variable cost structures. Look no further than bitcoin for an example of how blockchain can disrupt existing systems and replace them with entirely new models. From its inception in 2009, cryptocurrency has evolved to a global currency replacing all intermediaries needed for money transfer with its peer-to-peer money transfer business model.
The trusted data and logic in a peer-to-peer economy powered by a blockchain network create opportunities for innovative business models for enterprises, including track and trace, provenance, assets digitization, dispute resolution, compliance and process simplification, elimination of intermediaries, data monetization, tokenization, and identity management. This is all done while ensuring privacy and confidentiality.
As a bonus, it can also integrate with AI to offer business intelligence, work with the IoT to create transparent records, and more. Additionally, blockchain-as-a-service models can help reduce capital expenses and improve variable cost structures.
Implement agile operations by automating manual processes. With smart contracts, businesses can automatically execute, document, or control events and actions according to the terms of the contract, eliminating manual processes and disputes. This also prevents delayed transactions and drastically improves efficiency.
Air travel offers a great example: A blockchain-based solution could automatically integrate flight information with travel insurance claims, issuing delay settlements automatically. In yet another example, IBM Blockchain already automates contract labor processes by resolving 100% of discrepancies in its contingent labor contracts during invoice reconciliation.
Integrate and share data without losing any proprietary information. Large businesses amass a treasure trove of valuable data regarding sales, inventory, manufacturing, and more. This information is essential to the accuracy of demand forecasting efforts, but many companies worry about the risks of sharing more than they should. Within a blockchain network, they can more securely share information on a permissioned basis without losing control over it, and they can even track the use of the data in order to effectively manage compensation for its use.
At the same time, with COVID-19 sparking a nearly 240% increase in financial cyberattacks, companies pushing security to the wayside do so at their own peril. No cyber defense can be considered 100% secure. However, blockchain with distributed nodes provides availability, data confidentiality, and integrity. It’s time for companies to look for cybersecurity controls and standards equipped with blockchain in order to shield themselves from external attacks.
Avoiding the next disaster requires individual, organizational, and institutional responses as well as large-scale coordination. We can see crises as something of an inflection point — the right response to a crisis turns it into something else entirely. To effectively capitalize on the opportunities a crisis can present, we need appropriate organizational capabilities, innovation, and entrepreneurship. Using blockchain for digital transformation meets all three requirements.