As technology advances continue to disrupt business environments, it is essential for every organization to invest in transformative breakthroughs in technology to take their business to the next level. While some finance organizations already use business process management (BPM) platforms, most are unaware of how they can take advantage of combining blockchain technology and smart contracts with their existing workflows. When most people think of blockchain, their understanding is limited to Bitcoin and payments. Blockchain’s innovative power stems from allowing parties to transact with others they do not trust over a network in which there is no trust. The road to implementation of blockchain at the enterprise level is still fully uncharted, but there is definitely a fit for blockchain in financial services as a communication layer for BPM.
BPM and Blockchain
BPM consists of the design, execution, monitoring, and improvement of business processes. According to a paper called, Blockchains for Business Process Management --Challenges and Opportunities, while intra-organizational processes have been used by systems to support the enactment and execution of processes, inter-organizational processes, the challenge of joint design and lack of mutual trust, still need work. Emerging blockchain technology has the potential to change the environment in which inter-organizational processes are able to operate. Blockchain offers a way to complete processes in a trustworthy manner, “key aspects are specific algorithms that lead to consensus among the nodes and market mechanisms that motivate the nodes to progress the network.”
Blockchain technology facilitates the creations of a peer-to-peer BPM system that eliminates the central repository of information and allows organizations to exchange information directly with one another. This enables organizations to verify and enforce that specific steps are being taken and performed correctly by anyone on the network. This also allows for organizations to be the sole proprietor of data generated by their own organizations and related parties. This means data cannot be locked by a third-party application or provider. Blockchain also offers another concept that is important for any business process, smart contracts. For example, the Ethereum (global, decentralized platform for money) blockchain supports a Turing-complete programming language for smart contracts, “The code in these languages is deterministic and relies on a closed-world assumption: only information that is stored on the blockchain is available in the runtime environment.” A smart contract code is deployed with a specific type of transaction. The deployment of smart contract code to the blockchain is permanent. Once deployed, smart contracts offer a way to execute code directly on the blockchain network.
