The surging interest in blockchain initially pertained to its utility as the underlying architecture for the cryptocurrency phenomenon. Nonetheless, its core attributes (its distributed ledger system, immutability, and requisite permissions) are rapidly gaining credence in an assortment of verticals for numerous deployments.
Blockchain techniques are routinely used in several facets of supply chain management, insurance, and finance. In order to realize the widespread adoption rates many believe this technology is capable of, however, blockchain must enhance the very means of managing data-driven processes, similar to how applications of Artificial Intelligence are attempting to do so.
Today, there are myriad options for the enterprise to improve operations by embedding blockchain into fundamental aspects of data management. If properly architected, this technology can substantially impact facets of Master Data Management, data governance, and security. Additionally, it can provide these advantages not only between organizations, but also within them, operating as what Franz CEO Jans Aasman termed âa usability layer on topâ of any number of IT systems.
Customer Domain Management
A particularly persuasive use case for the horizontal adoption of blockchain is deploying it to improve customer relations. Because blockchain essentially functions as a distributed database in which transactions between parties must be validated for approval (via a consensus approach bereft of centralized authority), itâs ideal for preserving the integrity of interactions between the enterprise and valued customers. In this respect it can âcreate trusted ledgers for customers that are completely invisible to the end user,â Aasman stated. An estimable example of this use case involves P2P networks, in which âpeople just use peer-to-peer databases that record transactions,â Aasman mentioned. âBut these peer-to-peer transactions are checked by the blockchain to make sure people arenât cheating.â Blockchain is used to manage transactions between parties in supply chains in much the same way. Blockchain aids organizations with this P2P customer use case because without it, âitâs very, very complicated for normal people to get it done,â Aasman said about traditional approaches to inter-organization ledger systems. With each party operating on a single blockchain, however, transactions become indisputable once they are sanctioned between the participants.
Internal Governance and Security
Perhaps the most distinguishable feature of the foregoing use case is the fact that in most instances, end users wonât even know theyâre working with blockchain. What Aasman called an âinvisibleâ characteristic of the blockchain ledger system is ideal for internal use to monitor employees in accordance with data governance and security procedures. Although blockchain supports internal intelligence or compliance for security and governance purposes, itâs most applicable to external transactions between organizations. In financeâjust like in supply chain or in certain insurance transactionsââyou could have multiple institutions that do financial transactions between each other, and each of them will have a version of that database,â Aasman explained. Those using these databases wonât necessarily realize theyâre fortified by blockchain, and will simply use them as they would any other transactional system. In this case, âan accountant, a bookkeeper or a person that pays the bills wonât even know thereâs a blockchain,â commented Aasman. âHe will just send money or receive money, but in the background thereâs blockchain making sure that no one can fool with the transactions.â
Master Data Management
Despite the fact that individual end users may be ignorant of the deployment of blockchain in the above use cases, itâs necessary for underlying IT systems to be fully aware of which clusters are part of this ledger system. According to Aasman, users will remain unaware of blockchainâs involvement âunless, of course, someone was trying to steal money, or trying to delete intermediate transactions, or deny that he sent money, or sent the same money twice. Then the system will say hey, user X has engaged in a ‘confusing’ activity.â In doing so, the system will help preserve adherence to company policies related to security or data governance issues.
Since organizations will likely employ other IT systems without blockchain, Master Data Management hubs will be important for âdeciding for which transactions this applies,â Aasman said. âItâs going to be a feature of MDM.â Mastering the data from blockchain transactions with centralized MDM approaches can help align this data with others vital to a particular business domain, such as customer interactions. Aasman revealed that âthe people that make master data management have to specify for which table this actually is true. Not the end users: the architects, the database people, the DBAs.â Implementing the MDM schema for which to optimize such internal applications of blockchain alongside those for additional databases and sources can quickly become complex with traditional methods, and may be simplified via smart data approaches.
The rapidity of blockchainâs rise will ultimately be determined by the utility the enterprise can derive from its technologies, as opposed to simply limiting its value to financial services and cryptocurrency. There are just as many telling examples of applying blockchainâs immutability to various facets of government and healthcare, or leveraging smart contracts to simplify interactions between business parties. By using this technology to better customer relations, reinforce data governance and security, and assist specific domains of MDM, organizations get a plethora of benefits from incorporating blockchain into their daily operations. The business value reaped in each of these areas could contribute to the overall adoption of this technology in both professional and private spheres of life. Moreover, it could help normalize blockchain as a commonplace technology for the contemporary enterprise.