Blockchain and Collaboration

Updated: Dec 22, 2019

Blockchain is a powerful force in the business world right now. It is both a technology and a technique for multi-party transaction management that eliminates the need for middlemen, central bodies, and clearing houses (although as the deployment of blockchain grows, it will become apparent that completely eliminating central bodies and clearing houses might be impossible - see the Wall St. Journal article on lost passwords). Will it provide us with the long-sought multi-enterprise visibility we want? Maybe. Will it help us collaborate better across enterprises? Maybe. The truth is no one knows. Until the investments are made and it is tried for such problems, we don't know what we have on our hands. Either way, something will come of it simply because of the amount of money being thrown at it. The entrepreneur greed factor has set in, so everyone is jumping into the game, from currency exchanges to iced tea companies.

Collaboration is a squishy term that has been thrown around for quite a while. Software companies have been building so-called collaboration tools for a couple of decades now. B2B hubs were supposed to be the ultimate deliverers of multi-enterprise collaboration. Blockchain turns B2B hubs on their ear - the point is the opposite - there is no hub.

Today we collaborate on plans, purchase orders, shipment notices, capacities, promotions, inventory, and all sorts of other things, with varying degrees of efficiency and effectiveness. We can get visibility for product movements across the supply chain, including hand-off points between different enterprises, carriers, and modes. However, none of this is done very easily or without friction. The general objectives of collaboration are simple - two parties have different goals, objectives, and constraints and they must work together to make globally good decisions, or decisions that are aligned to value chain goals, which presumably are good for the end customer at the ultimate downstream decision point.

Enterprises - and even organizations within enterprises - represent authority domains that are governed by all sorts of rules and regulations. These rules and regulations hinder the ability to create a network effect similar to that which has become common in the consumer world. For example, an individual in the consumer world can sign up for Facebook simply by filling in a form and clicking a terms and conditions button. In the corporate world, the individual represents the corporation and the corporation is governed by internal and external rules, some of which may be common across corporations and some which may be specific to a given corporation.

In the B2B marketplace world, we had public marketplaces and private marketplaces. Initially, everyone was talking about public marketplaces until corporate reality set in and companies decided they would rather not be on a public marketplace; thus private variations became common. The same discussion is now happening with blockchain. As companies figure out what they can and cannot share, they will have to figure out what is public and what is private and for what and for whom information is public versus private.

And, with blockchain, there is the collaboration before the collaboration. Before companies can collaborate on business, they must collaborate on technology standards. Or, there could be a standard that emerges by way of its market strength (which is the historical path; think TCP/IP). Either way, this is an exciting technology (and set of techniques), but there is long way to go if and when it is to achieve critical mass as a value driving enterprise tool.

#blockchain #collaboration #supplychain