Transactions have entered an era of disruption. Traditional bureaucratic tools of the past to manage transactions are not as efficient. Many transactions can be tracked and stored with a code or a digital signature, and many of the large fees paid to intermediaries have been removed. This transformation is the result of the digital innovation we are living in now, leading organizations to abandon intuition and make their decisions based on data analysis. Blockchain transformation, like digital transformation, requires the development of appropriate infrastructure. Organizations need new legal skills and more capable human resources, which will only be achieved through the implementation of effective strategic planning.
Traditional and bureaucratic economic foundations are entering a new phase in which new boundaries for organizations are defined and new mechanisms are determined to protect organizational assets. Organizational risk management has reached new levels and transactions between organizations or nations are changing at a rapid pace. New insights and more innovative actions are needed for organizational leadership.
Organizations are thriving to keep up with the time factor, which plays an important role in entering this new age. The hardware and software designed for today’s internet over the past few decades cannot keep up with this huge evolution of digital thought. Aligning with blockchain will impose huge costs. Entering the blockchain and achieving goals with this technology requires strategy and a will to be innovative.
Embracing the Future
Digital transformation has changed the world of business and has become data-driven using emerging technologies encoded by the world wide web.
The internet has led to a dramatic reduction in communication costs, it has also become a suitable platform for transforming intuition-based decisions into data-driven decisions. This breakthrough greatly reduces errors and has become the foundation of the future of blockchain thinking. Blockchain is defined as:
A system in which a record of transactions made in Bitcoin, or another cryptocurrency is maintained across several computers linked in a peer-to-peer network.
Moving toward the future, blockchain, which first appeared in Bitcoin transactions, is based on a virtual currency system that facilitates financial transactions between two parties, peer-to-peer, without any intermediaries such as lawyers or bankers. This data driven technology has made it possible for quick, easy access to a host of expediter information.
This bureaucratic system change may lead to a drastic reduction of organizational costs. By using blockchain, transactions are done in seconds instead of weeks, and many ledgers are replicated in databases. Each party to the transaction can easily access them, and the error rate is almost zero. There is no mediation between transactions, and any changes to the ledger are made simultaneously in all versions to all parties. The risk of hacker penetration is greatly reduced.
Achieving blockchain transformation and realizing these goals requires many factors. Blockchain will cause huge changes in the current form of business models in the not-too-distant future. And with these big changes, many opportunities will be provided to organizations to interact more effectively with their ecosystem.
Our first suggestion is that the development of human skill technology infrastructure becomes an integral part of the strategic plans of organizations. We also recommend organizations design more flexible structures to accept future changes and new innovations. Blockchain, like digital transformation, begins with change. This change should not only be done in people’s vision to accept innovations but should be accompanied by the development of more flexible structures. To develop more flexible structures, our suggestion is that all organizational processes be digitalized under the leadership of chief financial officers who will be using emerging technologies such as artificial intelligence.
Our next suggestion is to use external blockchain consultants. It is a fatal misconception to think this change will happen in the future and we will only go along with it as it spreads. What we are seeing today is the development of private blockchains around the world, especially in the US and Canada. This wind of change will soon reach Europe, Asia, Africa, and will bring great change.
It is also recommended external blockchain consultants coordinate extensively with the customer service management department. Entering this new age requires changing customer behavior. This change depends on the development of an effective plan, in full coordination with different departments of the organization, especially customer service. Customers must feel safe and secure in the new digital divide.
Along with changes at the social and economic levels, and the adoption of new standards by governments, our next suggestion for many managers is to launch a trial blockchain among the units in their organizations. In fact, there will be maximum preparation for a more effective response to external changes. This solution will greatly reduce operational risk for future changes and increase the probability of the organization’s survival against rapid changes.
We also suggest maximum cooperation be established between legal, IT, and human resources departments in the organization. This recommendation is based on the argument that with technological changes and the development of human capabilities, the legal departments of the organization should prepare themselves for the development of new ways of setting up contracts which lack traditional intermediaries (lawyers and bankers).
Considering these new horizons, blockchain will affect business and managers should effectively pay attention to the development needed infrastructure to better coordinate this great transformation. Building a platform for blockchain development is the secret to an organization’s survival. Developing an effective strategic plan, and empowering organizations to prepare for this great transformation of the future, will pay dividends for centuries.