New trends and developments are perpetually hitting the business world in recent years. In the digital age, businesses are looking for new technologies essential to their survival. Digital transformation for businesses allows them to take strategic decisions, streamline business processes, and implement new business models by leveraging disruptive technologies in the marketplace.
Blockchain is one of the key technologies driving business transformation. Blockchain may have gained huge momentum in the marketplace in relation to cryptocurrency or bitcoin, but people are still confused about the terminology. They still see blockchain as a synonym for bitcoin and often use the terms interchangeably.
A result of this is that whenever they think about what blockchain for business means, they think about the extent of cryptocurrencies. However, blockchain for business is built on a distributed ledger technology that is permissioned to increase among trusted partners. It is based on a peer-to-peer topology that escalates transactions’ transparency, data resiliency, and security while reducing additional costs in running business operations.
As a result, there is no excuse for losing out on the immense business opportunities that this technology can offer you, simply because you are living under a rock. Today, we will be discussing the different ways in which blockchain development companies can help you to make a huge difference in your business processes in this article.
But first, let’s take a look into the challenges faced by traditional business models.
Challenges Traditional Business Model is Facing
Traditional business models have limited resources and are no longer sufficient to tackle global competition. Growing and existing businesses come across various challenges that demand different solutions. Here are some challenges traditional business models face in the current growing competitive environment.
1. Autonomy
In the traditional business model, every process functions as “silos”. People belonging to one process are unfamiliar with the information gathered, analyzed, and employed by those belonging to another process. This autonomous nature of the processing of businesses is resulting in lower transparency and trustability among all.
2. Time-Taking Processes
As stated earlier, all the processes act as different entities in a business operation. Because of this, teams often end up searching, gathering, and analyzing the same data to make decisions.
Besides, the teams have to rely upon different third-party intermediaries for the proper functioning of their business processes, which in turn, makes processes time-consuming and cumbersome.
This is again one of the business problems solved by technology.
3. Payment Barriers
Another challenge that has been mitigated with the advent of Blockchain business models is that of payment barriers.
Because of the availability of different currencies across the globe and the involvement of multiple parties into the process, payment transfer often ends up being more complex, time-taking, and costlier.
4. No Security
The traditional business ecosystem – data and stakeholders – are not prepared for the far more intelligent and constantly growing hacking world. This makes information reach only a few steps behind the leak and hack.
5. Higher Cost
In the traditional business models, all the processes are performed manually. Besides, various third parties are involved in every process, which not solely demands an additional amount of money and time, but also charges heavily for their services. This, altogether, results in a stagnant rise in the cost associated with a particular task.
Now that we are acquainted with the issues startups and established companies are facing with the conventional model, let’s see what differences come forth with the involvement of blockchain in business processes.
Ways Blockchain Enhances the Existing Business Model
Blockchain technology provides multiple advantages to businesses and introduces new ways to revamp existing business models while reducing costs, lowering intermediaries’ time consumption, and strengthening a higher level of trust in an ecosystem. Here are the 10 ways businesses can embrace blockchain in their digital transformation journey.
1. Smart Contracts
The foremost application of blockchain for business transformation is smart contracts.
As you can depict from its name, smart contracts are a kind of self-executing contract where all the terms and conditions from both parties are written in the form of codes. These codes are then stored on a decentralized blockchain network, making them immutable.
So, whenever the codes are written are fulfilled, the associated conditions are executed. If in case any of the parties overrules the conditions, the services/products are returned back to the other party.
This way, the use of smart contracts encourages businesses to execute legal actions without involving any regulating attorney, government officials, or other fee-charging middlemen to settle disputes.
2. Ease of Payment
The collaboration of blockchain and digital payments is also one of the obvious applications of decentralized blockchain networks. By removing the involvement of third parties and associated documents like billing statements and invoices, blockchain has also eased the cash flow in the startups and establishments.
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