Efficiency is a major challenge for businesses in all industries across the globe. And since a company’s efficiency directly impacts its bottom line, that’s a serious problem. Continuous improvement, processes review, and an element of automation are all essential factors for becoming more efficient. But how do you reduce downtime and ensure that your company functions like a well-oiled machine? Blockchain can help improve business efficiency and solve systemic problems before they become barriers to growth or earnings potential.
The Need to Improve Business Efficiency
A 2019 survey by OnePoll revealed that as much as one-third of employees’ time is wasted due to inefficient processes. Much of this is spent on avoidable administrative chores, and outdated technology tasks. In addition to these findings, nearly half of those surveyed said they would be more productive with the right technology and tools.
And it’s not only employees who are frustrated by carrying out time-wasting tasks. According to research by Gartner, alongside growth, cost management, and digital infrastructure, senior executives also say that business efficiency is one of their main priorities in 2020. 47% of respondents mentioned technology as one of their top two ways of improving productivity and maintaining their competitive edge.
Fortunately, the solution is now within their reach. Blockchain technology is enabling businesses to increase efficiency across their organisations in a number of ways, from enhanced data security to faster transaction speeds, effective settlement automation to business operational efficiency, and continuous improvement. The transparent nature of blockchain also greatly improves collaboration between businesses and their external partners by providing all stakeholders with a single source of truth.
According to CB Insights, there are at least 58 big industries that blockchain can disrupt. In the manufacturing sector, blockchain is already helping to eliminate security vulnerabilities, protect intellectual property from theft, and streamline project management, allowing the industry to grow and scale.
The entertainment industry is rife with intermediaries. CitiGroup reported that despite an all-time-high spend of $43 billion in the US music industry in 2018, artists took home just $5 billion (around 12%). Blockchain is driving efficiency through disintermediation and ensuring that the profits end up in the right hands.
And the supply chain is perhaps one of the most universally applicable aspects of blockchain, allowing for secure, efficient, and transparent monitoring of goods and transactions. This is just a handful of examples of how blockchain technology is improving efficiency for enterprises across the globe.
The ability to automate repetitive, time-consuming manual tasks, ensure transparency across the business and its wider network, and remove multiple middlemen means that businesses can increase efficiency and achieve dramatic cost savings at the same time. From fintech and telecom to healthcare and entertainment more companies are harnessing the power of blockchain for efficiency. Let’s take a closer look…
One universal example of how blockchain can improve business efficiency in any industry is automating settlements. Many companies dedicate entire departments and allocate thousands of working hours a year to tasks related to receiving, organising, approving, and paying invoices.
The ability to create smart contracts with blockchain technology can reduce this burden almost entirely. Once the smart contracts are coded and deployed, settlements can be automated and handled without human intervention. This removes multiple issues such as delayed payments and human error while reducing costs and freeing up employees for more pressing or creative tasks.
According to a FreshBooks report, processing one single invoice can cost large companies as much $40. With blockchain-based solutions, your business can save hundreds of thousands of dollars a year. Employees can finish the work in a fraction of the time and focus on value-adding activities that help your business grow and gain a competitive edge.
And since smart contracts are tamper-proof and immutable, the conditions can’t be altered. This means that all parties can be sure that the agreed-upon terms will be met which, in turn, reduces the need for potentially costly and time-consuming litigation.
Enhanced Data Security
One of blockchain’s core benefits is that it provides enhanced data security. On average in 2020, cyber attacks cost large businesses a staggering $824,750. This number can go as high as $2 million depending on the severity of the attack, causing a significant dent in companies’ profits.
Using a secure blockchain-based solution can help enterprises to avoid these devastating attacks. This is beneficial for customers whose personal information is often placed at risk due to data breaches, and for the company as they avoid lengthy and expensive litigation.
Since blockchain relies upon cryptography, all the data stored on the blockchain is encrypted, making tampering almost impossible. And thanks to its decentralized nature, you no longer have to store sensitive information on one or even a cluster of vulnerable servers. Having no single point of failure makes blockchain technology infinitely more secure than traditional IT setups. This is a compelling use case for blockchain as a business process improvement for any industry that handles sensitive customer details.
Improved Collaboration With External Partners
Blockchain is a versatile technology that your company can use in many ways to enhance business operational efficiency. Thanks to its transparent nature, it has become indispensable in industries where various external partners are involved, such as the supply chain. Blockchain enables collaboration, allowing all parties to view one accurate ledger with trusted data integrity.
A DHL analysis on the potential impact of smart contracts on logistics highlighted how blockchain could increase business operational efficiency. Beyond the automation of repetitive tasks, smart contracts enable the sharing of information, improve invoice accuracy, and reduce overpayments, among other benefits. All this leads to enhanced relationships, improved collaboration with external partners, and improved business efficiency by default.
Blockchains come in different shapes and sizes. While they allow for increased transparency, that doesn’t mean that all your company’s transactions will be visible to all. Through permissioned ledgers and enterprise-grade blockchain, your company can customise the solution to meet your needs, sharing only the information necessary for improved efficiency and collaboration.
Transparency can be particularly helpful when it comes to the supply chain as companies can track and trace items from their source. Through a customised blockchain network, they can ensure the authenticity of their products all the way from the farm to the store shelves. Many more retailers and logistics companies are also using blockchain to increase efficiency in this way.
Blockchain’s innate transparency is also useful when it comes to sharing necessary data with auditors and regulators. A research paper by Deloitte found that blockchain technology will soon lead to greater standardisation and transparency in reporting and accounting. This will increase efficiency and enable easier data extraction and analysis, not to mention save enterprises vast amounts of time and resources when it comes to audit and compliance.
Leveraging Blockchain Technology With Protokol
Blockchain can drive business efficiency across all departments of global enterprises. Where a business process improvement is needed, its unique attributes make blockchain a front-running technology to provide the solid solution. However, understanding how to best unlock the potential of blockchain can be a complicated process and it’s vital that you team up with the right provider.
At Protokol, we understand that no two business needs are alike. That’s why we offer custom blockchain solutions and a high level of interoperability so that they integrate seamlessly and frictionlessly into your existing IT infrastructure. From automating settlements to increasing transparency and enhancing data security, Protokol is helping global businesses to drive efficiency and generate cost savings.
Our range of blockchain consulting and custom development services provides everything your organisation needs to leverage blockchain technology to increase efficiency. Discover how blockchain can transform your company processes today by booking a free consultation with our blockchain experts to receive a personalised blockchain use case.