As an enterprise, you want your business network to trust you. However, often times the cost of trust is not in what we can trust, but in what we cannot trust. These costs are rarely accounted for in business networks.
Normally, account reconciliation techniques are in place to act as a catch-all for untrusted parties. This means that with immutable proof and consensus within a business network, you can significantly reduce or eliminate the need for data reconciliation.
While closely examining over thirty retail enterprises, we found that the ability to trust your business network is a critical factor in supply chain success. Creating trust, however, isn’t as straightforward and to establish trust requires a measured approach.
PWC’s Global Blockchain Survey in 2018 found that 45 percent of companies investing in blockchain technology believe that lack of trust among users will be a significant obstacle in blockchain adoption. This is due to uncertainty with regulators and concerns about the ability to bring business networks together. However, by confronting this trust gap early, we’re able to plan cybersecurity and compliance frameworks that regulators and stakeholders will trust.
Generating trust within intracompany business networks is a critical component of customer success. Fortunately, looking at data from supply chain networks across the retail industry, we identified three key measurable areas often considered the foundation of enterprise trust.
1. Validity of data. An organization has, to the extent and to the effect, accurately sourced information that holds true when shared with the consumer.
2. Governance of data. An organization has defined fair business rules to manage data and to align with business processes.
3. Reliability of data. An organization acts consistently and proactively, in a timely, thought-driven manner.
The adoption of blockchain technology is measured by how well it is understood and trusted. Generally, enterprises hesitate to embrace an emerging technology, especially one that requires a new method in sharing data. Blockchain technology has proven several concepts across multiple industries, delivering value in a manner that delegates data management back to the consumer and to regulatory bodies. As we embark into the next phase of scalability, we’re beginning to zoom into the immutable proof this technology demonstrates with the ability to further define measures and report results that not only impact an enterprise, but also an industry.
With more than a decade of this transformative technology, through the rise of digital commerce, trusting business networks have raised significant questions in transforming IT. As a result, this transformation has redefined technical stacks and has developed new data models. However, technology cannot scale trust within a transaction, hence, to reduce the cost of trust, we must identify quantifiable metrics.
How do you quantify trust?
Today, blockchain presents an interesting predicament in corporate America with businesses boxed by traditional infrastructures and long-standing processes. With the rise of blockchain technology, businesses are demanding data quality reviews prior to progressing into solutions that apply automated business logic across a value chain.
Although trust is a qualitative attribute, the measure of trust depends on quantifiable metrics. Quantifiable measurements of trust include:
System behavior. Programs and applications that capture the movement of data, as exhibited by transactions, consensus or votes.
Content analysis. Using techniques like Natural Language Processing (NLP), deep learning and AI/ML to analyze structured and unstructured data.
IoT and web-based identities. IoT devices, QR codes, and web-based identities for cybersecurity.
By capturing quantifiable data, enterprises begin to establish governance with a collection of automated business processes, improving regulatory compliance and safeguarding the customer experience. The expansion of blockchain data depends on the migration of enterprise legacy data into building blocks, defining rules for each block that results in significant enhancements to business outcomes.
How does trust interoperate?
Today, data silos exist within business networks that can lead to inaccurate information. Compatibility between data silos requires stronger interoperability between all parties within a network. In order for compatibility to exist, trusted networks must share information that complies with regulatory standards and industry-wide initiatives, in real-time.
Interoperability in business networks for blockchain consumption can be demonstrated by:
- Integrate databases to align based on identity
- Enable a data engine, like Watson, to seek keywords
- Parse notes with techniques, like NLP, to structure data
- Define rules within measures to validate data
- Translate business rules into a smart contract to automate a business process
This generates an immutable record on the blockchain. When you begin to acquire blockchain records, you then begin to track and report measures that are linked with industry-wide initiatives, resulting in the proactive management of data, automating a business process atop unstructured data and across supply chains. To correlate this a step further, based on the logic within smart contracts, automating a business process, we eliminate the requirement of trust within a business network, or in other words, we increase trust with immutable records.
Blockchain automates trust
Blockchain has become a technology on which to build tools that automate trust. In a collaborative economy, that means trusting enterprises not based on reputation or brand but based on the immutability of blockchain. The cost of trust is high, and we incur risk each time we cannot completely trust our business network. If trust is measured, then the cost of trust becomes marginal when two parties trading goods must trust each other and the business network to govern a transaction.