Considerations to Become an Early-Adopter of Blockchain Technology
Blockchain technology is proving to be a revolution in today’s digitalized world and is bringing about a paradigm shift in the media industry. The application of blockchain technology has progressed from cryptocurrency to a wide range of industries and sectors. One such area where blockchain is looking to bring about major transformation is in the […]READ MORE >>
Blockchain technology is proving to be a revolution in today’s digitalized world and is bringing about a paradigm shift in the media industry. The application of blockchain technology has progressed from cryptocurrency to a wide range of industries and sectors. One such area where blockchain is looking to bring about major transformation is in the procurement sector. The currently available technologies in the procurement sector face problems in product traceability, contract management, information sharing, and auditing. Blockchain solves all of these issues with tamper-proof and streamlined records of all information within a supply chain.
So, it seems imperative that a company adopts the blockchain technology to reap the benefits provided by it. But, it’s easier said than done since it’s still an alien technology for most of us. Here are some pointers to look into before considering implementing blockchain:
Category of Blockchain
- Public Blockchains: Public blockchain is the underlying principle of cryptocurrency, where anyone is allowed to read and write to the blockchain. Such blockchain does not provide confidentiality of data wanted by procurement managers
- Private Blockchain: Here, the write permission is centralized to one organization but read permissions can be restricted to a few key stakeholders. For instance, a marketing agency can gain spend information of an organization to suggest corrective strategies.
- Consortium Blockchain: It’s similar to the private blockchain but the writing is restricted to a particular group of companies. This provides added advantage over the private blockchain, as it lays the foundation for industry standards to be developed. This allows for information exchange between two different organizations within the same industry also facilitating inter-organizational processes
A blockchain is typically based on distributed ledger, where the information is replicated, shared, and synchronized across multiple users. Using such a ledger would result in sensitive information such as costing, prices, revenue, and contracts being available to all. A hyper ledger ensures the privacy of data and information by providing collectively defined membership and access rights within the business network. This allows only select individuals with the correct encryption key to access the information.
Blockchain technology is different from other ready-made packaged software since it’s still very new. Due to its complexity, it’s highly advisable to follow a prototyping measure before developing a full-fledged solution. It is advisable to undertake a rapid prototyping instead of breadboard prototyping as it allows for cumulative requirements collection and testing leading to lower cost of development.
The blockchain technology operates without a geographical barrier and thus crosses jurisdictional boundaries posing a legal risk. Suppliers may face legal risks since this technology is so ambiguous and falls outside the ambit of taxation. It is important to analyze all possible legal risk that could arise out of blockchain implementation and abide by the existing regulations.
The blockchain is still a complex technology, and expert analysis should be performed before opting to implement the technology. SpendEdge’s report on the global blockchain technology market 2017-2021 delves on the intricacies of the blockchain technology, major suppliers, key markets, and major application areas. Click here to:
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