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Why Blockchain is a Game Changer

09 Feb 2017 9:51 AM | Christon Valdivieso

Authored by: Estelle Rossman

Original Post on: https://www.linkedin.com/pulse/why-blockchain-game-changer-estelle-rossmann


Within Supply Chain there are many different strategies and trends that companies use to have a competitive advantage over the competition. Paul Dittmann identified seven trends that should be addressed in any supply chain strategy. These trends are called Game Changers which are Collaboration, Lean and Six Sigma, Aggressive Management of Complexity, Network Optimization, Global Supply Chain, Sustainability, and Focus on Cost and Working Capital. Dittmann’s Seven Game Changers move the strategy focus from internal to an external focus on the firm. Although all of these game changers are essential for a company to identify with, I believe that there are some new game changers that companies can benefit from. With so much new technology emerging and there are some new trends that are being introduced in the market. Blockchain technology was introduced to help with financial security and reliability by creating a distributed database that holds records of transactions.

The use of Blockchain is a new trend in the marketplace that has the ability to help strategically serve your customers but also helps by identifying strategic methods to improve tasks such as recording, tracking, assigning, linking and sharing data. Blockchain makes it easier and safer for firms to work together over the internet. Information is shared and continually reconciled on the database, allowing all information to be public and verifiable.

This technology was introduced in 2009 by Bitcoin, a company that is a leading innovator in the financial sector. Bitcoin is the first company to decentralized global currency with the creation of Blockchain. With the use of cryptocurrency or digital currency, it opens up a wide market to provide a new generation of internet interaction, through online payments and transactions for digital assets. This new company is gaining a lot of attention from the financial and technological sectors by being able to access an underground economy which attracts close to $1 billion in venture capital. Bitcoin creates a new game changer in the business to enhance transparency which helps to reduce delays due to human error. 

All transactions done through Bitcoin is permanently recorded in the Blockchain for anyone to see. This technology has the ability to provide total visibility and eliminate the middlemen used to typically conduct, authorize or verify transactions.

"Blockchain could reduce banks' infrastructure costs by $15-20 billion per year by 2022." -Kevin Petrasic (Petrasic and Bornfreund, 2016)

A company named Bitwages uses Blockchain to make their international payroll cheaper, quicker, and more reliable by being able to remove banking intermediaries. With the use of Blockchain, the company is able to reduce time delays in the process by two to three days and saving on average about 8% in costs. Many of these companies are using big data and cloud technology rather than going to tellers and branches to have faster access to lending. Banking organizations are realizing that they are in danger of this disruption to their traditional financing sector. Banks must quickly respond to this technology if they want to remain on the grid in a digitally centric world.

 The Blockchain is a versatile technology that can create value and improve processes when applied to different industries. Tierion was the first company to create a Blockchain in the healthcare industry. With the use of Blockchain technology, it creates a strong data integrity and security to share information regarding patient data from hospitals, doctors, and insurance companies. It has the potential to optimize interactions between health care records, insurance claims, and patient data. As the healthcare technology is known to move slowly due to its high risk and consequences of failure, Tierion applied the technology towards the medical system manufacturers. This would allow Blockchain to record the usage of maintenance history of MRI machines, providing transparency and sharing the data to hospitals for prevention.

Blockchain is also being applied at a startup company called PeerTrack. The company created its own system called MUSE Blockchain which is specifically designed for the music industry. PeerTrack is making is making it easier and convenient for artists to manage royalties and revenues in a sort of equity trading system.

With the use of MUSE Blockchain, the company allows artists to "instantly claim 90 percent of their sales income" instead of only receiving about 15 percent which is currently what they get. -Ben Dickson (Dickson, 2016).



Sources:

  • Chester, Jonathan. "Why Innovative Companies Are Using The Blockchain." Forbes. Forbes Magazine, 11 Jan. 2016. Web. 27 Jan. 2017. <http://www.forbes.com/sites/jonathanchester/2016/01/11/why-innovative-companies-are-using-the-blockchain/#1fc219b52d93>.
  • Dickson, Ben. "How blockchain can change the music industry." TechCrunch. TechCrunch, 8 Oct. 2016. Web. 04 Feb. 2017. https://techcrunch.com/2016/10/08/how-blockchain-can-change-the-music-industry/.
  • "How Blockchain Technology Will Disrupt Financial Services Firms." Knowledge@Wharton. University of Pennsylvania - Wharton, 24 May 2016. Web. 04 Feb. 2017. <http://knowledge.wharton.upenn.edu/article/blockchain-technology-will-disrupt-financial-services-firms/>.
  • Petrasic, Kevin, and Matthew Bornfreund. "Beyond Bitcoin: The blockchain revolution in financial services." White & Case LLP International Law Firm, Global Law Practice. N.p., 7 Mar. 2016. Web. 04 Feb. 2017. <http://www.whitecase.com/publications/insight/beyond-bitcoin-blockchain-revolution-financial-services>.
  • Vorabutra, Jon-Amerin. "Why Blockchain is a Game Changer for Supply Chain Management Transparency." Why Blockchain is a Game Changer for Supply Chain Management Transparency - Supply Chain 24/7. N.p., 3 Oct. 2016. Web. 27 Jan. 2017. <http://www.supplychain247.com/article/why_blockchain_is_a_game_changer_for_the_supply_chain>.


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