How Blockchain Technology Leverages Digital Transformation Without the Usual Downsides
March 2023
The world is becoming more digital. Businesses that are not leveraging emerging technologies like blockchain will be left behind, and already are. Every industry today stands to benefit from revolutionary distributed ledger technology and its role in digital transformation.
Digital transformation has become a catchall term that underscores how businesses, organizations, governments, and other entities across all industries need to leverage emerging digital technologies if they want to both thrive and enjoy a competitive advantage.
Every so often a technology comes around that fundamentally changes how we do something within an industry or society as a whole. Video streaming technology popularized by services like Netflix led to pioneers in the video rental industry like Blockbuster getting left behind because of their inaction on leveraging the novel technology that came to their industry. It's a common tale of tragedy we can point to throughout the modern digital age, and will likely continue to be a story acted out by those who do not keep up with the march of progress.
Technology is in a constant rate of evolution. It does not sleep and it waits for no one. If you are not paying attention, you may miss out on opportunities that could position you as a leader in your industry and likewise reap the rewards. One of the latest digital technologies being adopted by an increasing number of businesses, organizations, and even governments is distributed ledger technology aka blockchain technology.
What Is Digital Transformation
Before we get ahead of ourselves, it is important to first understand what is meant by digital transformation and what the overall benefits of digital transformation are.
To put it simply, digital transformation is when a business integrates digital technology into everything it does as an entity. This includes the adoption of a customer or client-driven digital-first approach.
It goes far beyond just going paperless. You have blockchain technology, machine learning, edge computing, automation, and numerous other emerging technologies that will help your business become a disrupter in your niche. There will be a fundamental shift in how you operate your enterprise and provide value to your customers.
Going digital is quickly increasing across all industries and has already changed customer expectations, which places even more pressure on companies to adopt digital technologies. With these expectations increasing we also see the creation of new business opportunities as well, and that's a win-win. The current trend shows that the higher the digital maturity of a company, the greater its profit margins.
How Companies Are Reacting to an Increasingly Digital World
There has been a significant acceleration of digitization across all industries towards the end of the 20th century, with speed of adoption skyrocketing during the start of the 21st century (mostly during the 2020-2022 COVID-19 lockdown era).
Now that we're approaching 2030 (an often-mentioned target date for various ambitious goals), the need for integrating emerging digital technologies is more important than ever. Ignoring the very clear and obvious digitizing of everything in society spells bad news for anyone looking to be successful within their industry, field, or niche.
"We’ve been given a glimpse of the future, and the organizations that are accelerating their digital transformation now will be poised for success in the Data Era that is unfolding before our eyes."
-Michael Dell, Chairman & CEO of Dell Technologies
This sentiment is echoed by many enterprise leaders. In fact, when Dell Technologies released its Digital Transformation Index 2020, we learned that an impressive 79% of businesses are reinventing their business models to go more digital.
This is on the heels of the fact that nearly one in three companies are worried they are simply not going to survive over the next few years. The 60% of companies that do believe they will survive are bracing for a reality where it will take them years to start turning a profit again. Yes, COVID played a big role in this fear, but the rapid acceleration of doing digital during that period has not showed any signs of slowing down, leaving this fear very much a present danger to businesses that are not modernizing how their operate.
It doesn't have to be this way. Regardless of what industry or sector you operate in, adoption the digital technologies available to you right now will provide you with an exceptional opportunity to be at the leading edge and reap the rewards that come with such a prudent positioning.
Benefits of Digital Transformation
Is going digital in every area of your business really worth it? Here is a list of the key benefits of digital transformation that should answer that question for you.
Improved Efficiency
Integrating digital solutions streamlines processes and removes the need for manual tasks, as well as automates routine ones. The outcome provides significantly improved efficiency and productivity, which consequentially reduces costs.
Enhanced Customer Experience
The customer experience can be greatly improved thanks to digital tools available today. This means a business can provide a more personalized experience, quicker response times, and 24/7 availability to its customers. This translates into increased customer satisfaction and loyalty.
Improved Decision Making & Agility
Receive real-time data and analytics that will ensure your business can make the best-informed decisions possible, while also responding swiftly to market changes and demands, as well as pressure from competitors.
Reduced Costs
Save money by reducing human labor, customer churn, operational costs, and optimized resource allocation.
Increased Revenue
See a boost in your revenue thanks to an improved customer experience, a more efficiently-run business, and the opening of new channels.
Increased Collaboration
Take advantage of digital tools that make collaboration seamless and make communication more effective, no matter when or where in the world someone is.
Greater Innovation
Going digital spurs more innovation due to the new opportunities it provides for developing and delivering produces and services to an ever-evolving customer base.
Strengthened Security
Enhance the security of your business through leveraging digital technologies like encryption, blockchain, authentication, and real-time monitoring.
Competitive Advantage
Differentiate your business from its competitors by becoming more innovative, agile, and customer-centric.
The list goes on but by now you can reflect on how clear it is that adopting a successful digital transformation can be a boon to your business.
Blockchain – A Digital Transformation Revolutionary
"Blockchain technology isn't just a more efficient way to settle securities. It will fundamentally change market structures, and maybe even the architecture of the Internet itself."
- Abigail Johnson, CEO of Fidelity Investments
One of the most promising emerging technologies in this digital age is blockchain technology. Getting its true start in 2009 with the launch of the Bitcoin cryptocurrency, it has since expanded into a universe of over 1,000 different blockchains and around 20,000 active cryptocurrency tokens.
What Is Blockchain Technology?
In essence, blockchain technology is similar to a database but is actually a distributed ledger that involves a decentralized network of computers communicating and sharing data (transactions) in blocks that store the data.
Each computer (peer/node) has a copy of the ledger, and that ledger is continuously updated and verified by the entire network. This ensures every transaction is accurate and secure. This process is called a consensus algorithm.
The lack of a centralized entity ensures the entire network is trustworthy (aka trustless) and harboring no single point of failure, which makes it exceptionally secure. Transactions on a blockchain on transparent, immutable, and secure.
A Maturing Emerging Technology
The level of excitement within the blockchain industry is seldom seen in other areas of the digital space...and for good reason. It promises nothing short of a fundamental redesign of society's underlying digital architecture – one where centralized points of failure relying on trust shift to decentralized and distributed networks that are trustless and permissionless. What this means is that blockchain technology promises us a future where society is more equitable, prosperous, and secure.
Although currently having a tiny fraction of the roughly 27 million software developers in the world today, the blockchain space is growing every year, with over 61,000 new developers becoming a part of this revolutionary digital space in the "crypto winter" year of 2022. What is driving developers to distributed ledger technology is the tremendous potential and real-world improvements it can provide all industries.
While it is definitely still in its infancy, it has begun maturing. After all, over one billion people have used it in some way over the past decade, usually through the use of cryptocurrencies, especially in developing nations with a weak fiat currency. This adoption is projected to go far beyond this as the benefits of blockchain technology become too appealing and beneficial to ignore.
As with any emerging technology, there will be challenges to overcome, as well as others that can be mediated (such as the blockchain trilemma). The consistent increase in developers diving into the blockchain arena, even during 2022's crypto winter, highlights just how powerful this technology is perceived by the very people who are developing the scaffolding of the future's digital architecture.
Blockchain Optimizes Digital Transformation
A digital transformation strategy is important, and indeed necessary, to stay agile and ahead today. However, without integrating distributed ledger technology into that strategy, businesses, and even governments, are not optimizing their digital shift.
Why is this, exactly? It's due to the significant benefits using blockchains and smart contracts platforms provide:
Decentralization – Transactions are distributed across a network of nodes, which prevents manipulation or corruption
Transparency – All transactions are immutable, visible, and traceable
Security – Advanced cryptography secures transactions, ensuring data is tamper-proof
Efficiency – Transactions are usually executed in seconds to minutes, and at lower costs than traditional methods, all while eliminating intermediaries
Traceability – Any goods, assets, or transactions can be tracked and traced from end to end, thereby improving supply chain management and reducing fraud
Trust – Smart contacts allow for transactions to be executed in a way that makes them trusted by all parties
Programmability - Smart contracts can be programmed, customized, and upgraded to match specific needs
Accessibility – Smart contracts can be accessed by anyone, enabling them to be a global solution for public and private sector transactions
This is by no means an extensive list of what blockchain technology has to offer, but what it does is provide you with insight into how it can optimize your digital transformation strategy.
Once someone starts to understand the scope and ability of blockchain technology, the very way they think and perceive the world will change forever. This is one of the leading emerging technologies today that is only going to become more integrated into society across all industries over the coming decade.
Conclusion
The world is ever-changing, and with that comes the need to continually adapt or get left behind. Instead of becoming the Blockbuster of yesterday, it's possible to become the Netflix of tomorrow. Countries like Singapore are leading the way as visionaries of what digital transformation technologies like blockchain can do for commerce, industry, governance, society, and more, and are becoming welcoming environments for innovation.
Digital transformation and emerging technologies like blockchain offer a panacea that is essentially saying we can experience a better life thanks to innovative software. More opportunities, greater convenience, and increased resilience in a complex and changing world are all waiting for us. The best time to get started leveraging the digital technologies available today was yesterday. The next best time is today.
If you'd like to learn more about how to adopt bespoke digital transformation solutions in your business, you can contact us to start your journey.
About the Author
Paul Lenda is a Digital Advisor at Pacific Advisory. He has a decade of experience working and operating within the blockchain industry, and advises on the responsible use of emerging & digital technologies, as well as adoption of regenerative systems, in a way that leverages benefits, reduces risks, and optimizes processes, resulting in improved socio-economic models.