Blockchain technology is transforming countless industries and business disciplines, including Business Process Management (BPM) and Workflow Management. When most of us think of blockchain technology we think of Bitcoin or related innovations, such as hardware wallets. We might also think of the ways Bitcoin has challenged the traditional finance world, leading to new forms of banking and trade finance. What’s more, many bring to mind different digital platforms that enable consumers to trade or invest in popular cryptocurrencies. Most people don’t think of business processes or blockchain workflow automation. However, the utility of blockchain technology is vast. With the right datasets, properly applied, blockchain technology has the power to transform rapidly your business.
How Does Blockchain Technology Work?
In order to keep things simple let’s begin with Bitcoin (BTC). Bitcoin acts as a store of value. When a trader, let’s call her “Laura”, purchases a Bitcoin using US dollars (USD) she is essentially converting her USD into BTC.
This transaction is then recorded on a digital ledger, built out of “blocks” (records), confirming that Laura has ownership of this Bitcoin. In a traditional transaction, a centralised authority has to confirm this procedure. With blockchain, a network of individuals confirms all the transactions.
There are several ways that transactions can be confirmed on a blockchain. Some, like Bitcoin, use Proof of Work consensus. This requires computers to solve transactions in order to “confirm” a transaction as legitimate. Others use Proof of Stake, which requires users to “lock” cryptocurrency to validate a block or nodes. This allows specific computers to approve transactions without the heavy computing power Proof of Work calls for.
No matter how a blockchain secures itself, the end goal is to add barriers to making and sending transactions. This prevents users from spamming a network with false transactions and “double-spending” money that they don’t have.
The most interesting thing about blockchain technology is that the contents of a block are completely irrelevant! In theory, Laura could be recording a housing deed, customer data, or even her vote using Bitcoin or another blockchain solution.
This is exactly what has begun to happen thanks to the creation of smart contracts — computer programs that automatically run when given criteria are met.
Blockchain Workflow Automation and Business Process Management Go Hand in Hand
Blockchain has high potential from a business process management perspective. It can bring multiple stakeholders together and provide them with transparent tools to improve processes across companies. For instance, this makes it easier for different participants to standardise their reporting processes. Furthermore, it enables far more scalable reporting systems than the ones currently exist.
A key factor for a blockchain to work is structured data. This fact forces companies to review their internal processes and ensure that everything is being done correctly. It encourages operational excellence and helps to record and catch individuals not following the system.
To understand how this works, let’s take a look at what would happen with a supply chain management case. Today you would need to trace all products based on their ID number. Then, you would need to work backward to figure out where the problem occurred. Every time you would hope that every person in a siloed supply system had followed business processes correctly. Consequently, this is expensive, time-consuming, and potentially risky to the public.
Blockchain works as a shared database. Inside this database, each product would have a unique ID number. This means that a company could track all those ID numbers and know exactly what happened and wherein the supply chain. It also enables them to quickly understand the scale of a potential threat and act accordingly.
Case Study: Blockchain In Food Production
The key benefit of blockchain from a business process management (BPM) standpoint is that it can make data easily accessible and untameable without the need for centralised confirmation. This is particularly useful in sectors such as charity or food production, where good information is critical to a project’s success or failure.
Let’s take a look at the example of food production. This industry has 3 key pain points at the moment:
- Lack of communication between a large number of participants operating in information silos.
- A complicated supply chain where the correct information is essential in order to fight fraud and avoid costly recalls.
- Consumers find it difficult to verify where their food is from and whether they get what they pay for.
Blockchain can solve all of these problems and help to encourage better business operation practices thanks to the necessity of maintaining good data. With blockchain workflow automation, it is possible to track the journey of a food product from the field to the shop shelves.
The most immediate area where blockchain technology can make a positive impact is in breaking down information silos. Blockchain can be accessed by anybody with a public key, but the information can’t be altered.
This would enable companies to monitor the status of a project in real-time, and be forewarned of any potential problem. It can even use IoT technology to collect metadata about refrigeration and transport requirements and append that to each individual shipment.
When something does go wrong, blockchain makes it much easier to get correct information about where the error happened. Each participant in the chain can be given a unique ID, thus ensuring transparency and trust in the overall chain. Also, this means that it is easier for companies to act quickly and limit the scale of threats.
At last, the final area where blockchain can make its biggest impact is by making it less difficult to verify the origin of food products. If the entire production process was placed on the blockchain, with each step recorded, it would be possible for companies to prove to customers that their product is legitimate.
This use case isn’t just a pipe-dream. Many businesses have implemented a significant number of blockchain projects in the real business world. Blockchain workflow automation improves almost every aspect of business operations: from product sourcing to financial agreements, providing customers more transparency.
To sum up, as scalability continues to improve, it is likely just a matter of time until your business implements a blockchain solution of its own.