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The advent of new technologies creates a recurring challenge for business leaders to maintain an understanding of the best method of maximizing value capture in their automation initiatives.  A good example of an emerging technology that sits in a blind spot for many business leaders today is Blockchain.

What is Blockchain?

Blockchain is a subcomponent of a broader technology known as Distributed Ledger Technology (“DLT”). Blockchain technology allows data records to be appended, shared, secured, and reconciled with exceptional security.  Blockchains operate on DLT platforms – distributed and interconnected servers that maintain the same replicated data. DLT networks prevent loss of information from any single node failure and Blockchain technology makes data records (or blocks) unchangeable, immutable, durable, and incorruptible. Collectively, DLT server networks represent a “single source of truth” (“SSOT”) for the data records (or “blocks”) they maintain.

Bitcoins, and cryptocurrencies in general, are good examples of Blockchain use cases in the public domain. Together, DLT infrastructure and Blockchain technology ensure that no two people can claim simultaneous “ownership” of a Bitcoin, even while those data records are housed on public servers. The data records for Bitcoins are public (in a sense) and cannot be copied, changed, or deleted. While there is a variety of use cases for Blockchain, such as cryptocurrencies, real estate and public domain applications that are well-served by unchangeable data records, there are also many use cases for Blockchain in private enterprise. Some of the leading use cases relate to supply chain.

In a typical enterprise deployment, two or more entities in a customer/vendor, partner, or consortium relationship establish the DLT infrastructure in a cloud environment.  This platform is accessible and available only to those entities, and not the general public.  An overly simplistic way of thinking of it, but a good visualization exercise, is to imagine a world where each company is not keeping its own databases – each reflecting its version of the inventories of services acquired-from or sold-to the other (that is, each enterprise having its own version of the truth). Rather, imagine the single DLT deployment means they ‘share an SSOT’ in the DLT. You can see how this provides a degree of transparency that is unattainable without DLT and Blockchain and can lead to a broad set of benefits including reduced business disputes, improved efficiencies, reduced financial accruals in some cases, and several others.

Blockchain in Telecom

Complex supply chain relationships are one of the best use cases for Blockchain and value creation opportunities exist in telecommunications (carriers, as well as tower or fiber infrastructure firms) and in media (primarily with Multichannel Video Programming Distributor services, a.k.a. “linear television”), as well as in healthcare, financial services, and B2C e-commerce, to name just a few.

A good example of a supply chain use case comes from telecom carriers. Telecom carriers often buy services from and sell services to competitors.  These carrier-carrier business interactions are highly structured and rely on ordering, invoicing, and maintenance platforms to automate the management of high-volume complex transactions. Each carrier has its own platforms to maintain this data. Many domestic wireline carriers have legacy platforms that are aging, and maintenance and enhancements are becoming increasingly costly, in both time and expense. These carriers have weathered years of pressure on revenues and margins and have endured difficult capital decisions that left many of these OSS / BSS platforms marginally, or under, funded.  As these increasingly functionally challenged systems struggle to keep up in an evolving industry, the situation often leads to operational challenges and results in disputed performance and fees.

Blockchain could provide an efficient solution to these challenges if industry associations and consortiums recognize the opportunity and carriers begin planning trials and proofs-of-concept to establish foundational experience in this space. These actions can and should happen simultaneously.

Summing it up

An increasingly relevant technology, Blockchain is viable in a large and growing number of use cases. The domestic telecom carrier ecosystem is ripening for Blockchain disruption – which will, in time, produce enormous cost savings, especially for forward-thinking business leaders in this industry.  A business leader should understand when – and why – a Blockchain solution may maximize value capture in an automation initiative. It is equally important for a business leader to recognize processes they manage that may lend themselves effectively to Blockchain so they can begin trialing solutions. After all, transitions to radically different technology can be disruptive and trials will build experience and success, leading to more of the same.

The Northridge team has a broad understanding of the growing use cases for DLT/Blockchain technology across industries, including unique insights in telecom, tower, fiber, and media.  Our business process and technology experts can help your organization achieve the most efficient value capture from your next process improvement or automation initiative. Contact us for a fair and knowledgeable assessment of whether Blockchain is a good fit for your organization.

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