(This post has been contributed by Samantha Black, content writer and developer at BackOfficePro)
Business process management focuses on the design and observation of business processes in an effort to find way to improve them. In today’s world, we have seen a lot of business processes swapped over to digital format. Then we bring in blockchain technology to change the landscape even further. Blockchains offer a truly unique method of executing business processes in a secure manner.
This post is going to look at some of the ways that blockchain technology factors into digital business process management. We’ll look at some of the opportunities that the blockchain brings, as well as the challenges now facing businesses.
The management of connections between business processes is referred to as strategic alignment. The goal of strategic alignment is to provide actionable steps that can be taken to boost overall performance. Blockchain technology allows businesses to flip the traditional “process follows strategy” equation, but this won’t work for all business models. It’s up to you to determine whether or not this is beneficial.
Governance of Data
Governance of data is different with blockchain technology than it is with traditional practices. Let me try to explain. Traditional BPM governance provides accountability for the roles of specific data. For example, some data might be used to help improve marketing while other data is used for making decisions related to stability. Blockchain completely changes data governance.
Within blockchain systems, it’s theoretically impossible for any business process to be violated because the network operates on a decentralised network. Algorithms check and verify the history of the public ledger. Since the network consists of different nodes, it’s not possible to violate all of these ledgers. My point is that blockchain enabled contracts would automate much of the overall process.
The Link Between Financial Transactions and Blockchain Technology
We can see that the financial world has started to show a promising level of cooperation between financial services and blockchain technology. That means that it’s going to play a role in many of your financial processes but how big that role is depends on your business. To better understand this, let’s look at the two big reasons why blockchain technology is limited to very specific financial industries:
First, every node within the blockchain must contain complete transparency. Therefore, it’s not suitable for certain sensitive financial processes where security is of paramount importance. Centralized systems offer greater security.
Secondly, each node within the blockchain must record every transaction. This consumes quite a bit of computing power, making it inefficient for certain processes.
The biggest risk for all companies right now is that DAOs are able to compete against many established processes that are currently in place, including human resources and customer service management.
Blockchain technology is capable of impacting traditional businesses and the way they view themselves. As artificial intelligence starts to take over certain business processes, blockchain technology can quicken the birth of networked organisations, reduce overall transaction costs, and require fewer levels within an organisation.
Overall, we will start to see more efficient planning and reporting as blockchain technology takes its rightful place in business process management. Consider the value of having a truly decentralised source to report data, with information being verified across multiple nodes for accuracy.
While we certainly don’t have all of the answers right now, one thing is for certain. Business leaders are going to have to learn how to incorporate this technology into their overall processes as new methods of doing business emerge.
We will start to see many non-core tasks become automated through the use of smart contracts. Blockchain technology creates a new outlook on BPM by providing new methods of automation and new ways to authenticate processes.