Blockchain in Digital Transformation: The Technology of Future
Blockchain and its applications for businesses are still the center of attention, so today’s article is about blockchain in digital transformation.
This is an interesting topic, considering the 21st century is the Digital Age. More and more businesses now realize the opportunities of applying digital transformation to improve their processes, customer experiences, and culture. Of all, blockchain is a promising technology.
Scroll down, supposing you are also looking for ways to strengthen your business!
Overview of Blockchain Technology
Have you checked our series of blockchain articles before landing on this page?
If yes, you already know the blockchain and opportunities to implement the technology for businesses. Otherwise, we will give you a brief overview.
Blockchain was first introduced in 1991 and has recently been in the spotlight only after the bitcoin boom. However, blockchain currencies are not the whole thing.
At heart, a blockchain is a chain of blocks used to store information within a decentralized network of nodes. In addition, the chain runs automatically using programmed smart contracts.
Once there is a new transaction, the data is copied to each node so that all participants can view the same information instantly at the same time. Yet, the blocks are immutable, meaning they can merely add new transactions rather than edit the existing ones.
Such characteristics benefit the applications of blockchain in business, as follows:
- Enhanced security since data blocks are immutable and trackable
- Better transparency when all participants get notified upon any transactions
- Improved efficiency of transactions when there is no need for 3rd intervention
- Cost reduction as businesses can fasten the transactions and eliminate third parties.
Also, check articles in the series on blockchain: How does blockchain work, and is it secure? | What Is a Smart Contract? | Preparations to Implement Blockchain Technology in Your Business
The Importance of Digital Transformation
Digital transformation will become a new normal for businesses very soon.
Firstly, this concept begins and ends with customers’ drive. Customers increasingly use digital means to search for businesses before buying products or services.
As a result, companies try to embed advanced digital technologies into as many business aspects as possible to improve digital interactions with customers and, eventually, increase return on investments.
Take Netflix, for instance. It uses digital innovations to stream videos widely so that the viewers can view films and programs on the internet instead of going for cable television or traditional broadcast.
Secondly, digital transformation also increases operational efficiency.
Businesses used to store their valuable information in papers or centralized on employees’ computers. They have to send snail mail or emails to share the information and any updates with stakeholders. This process requires lots of paperwork and consumes significant resources.
Digital transformation tells a different story when many documents and processes go digital. For example, businesses can use Cloud to store and share data. It is quicker and more convenient for stakeholders to access the information.
Now, the applications of blockchain in digital transformation bring it to the next level!
6+ Ways to Apply Blockchain in Digital Transformation
#1. Standard digital transactions
Traditional data storage is centralized.
It means that one business will possess all data and manage to share information with others. Whenever there are changes or updates, the business, as an owner, has to manually inform them via emails, calls, etc.
Not only does the centralization take time, but it also cannot ensure that all parties are updated with the same information in a timely manner.
In contrast, the distributed and decentralized blockchain copies the same transactions to all connected nodes within its network. This way, the shared information is standardized and identical for all chain participants. No one can manipulate the data in between.
#2. Accelerate business processes
Digital smart contracts help validate and execute transactions automatically, which helps reduce the time and effort of waiting for 3rd-party institutions or preparing paper documents.
When transactions run quickly, the business can expect to streamline other business functions and increase productivity.
Moreover, time is money.
#3. Change how a supply chain works
Many case studies have proven the benefits of blockchain in digital transformation for supply chains, such as Walmart, DHL, American Express, etc.
Thanks to the technology’s decentralized and immutable nature, it maximizes the transparency and traceability from raw materials procurement to the sale of the end products. The digitalized process can also replace slow and manual paperwork.
This way, manufacturers can better utilize product quality, delivery times, inventory, and reduced operational costs. Meanwhile, consumers can also track all product information within the supply chain.
#4. Architect the connectivity
Companies have used digital communication for decades, using the Internet of Things, machine-to-machine transactions, or cloud-based services. Helpful as those means are, they can expose companies to security problems and how to handle such large data simultaneously.
Blockchain enhances communities, both internally and externally. The technology allows for storing a large amount of data and sharing it with others almost instantly. In addition, the technology uses a leaner proof of stake to validate and secure the transactions as much as possible.
As a result, blockchain will soon become the next connectivity architecture of businesses.
#5. Be a platform for smart contracts
Business contracts are also an aspect of blockchain in digital transformation.
The businesses use smart contracts of blockchain to store information about the contracts securely and, more importantly, automatically execute actions when the contracts’ conditions are met. This helps avoid contract fraud as both parties must implement all the agreements to get the payments or trades.
#6. Create competitive advantages for business
Blockchain benefits a business in different ways, as above, which in return, creates competitive advantages. The company can enhance its operations, reduce costs, and improve customer experiences.
This way, the business can do better than the competitors on the market!
It’s Time to Think About Blockchain!
Once again, we confirm that blockchain in digital transformation will play an integral role in the economy’s future.
Although applying blockchain to your business is not a short story, you should still take an early step now to go further then. Simple enough, you can digest all of our articles about the blockchain and its applications – or even contact our expert to get a plan!