Anything that prevents a potential customer from purchasing your product or service is considered business friction. The unspoken goal of every business is to overcome inertia and friction. Companies’ growth depends upon critical strategic decisions such as acquisitions, mergers, and strategic alliances.
Enterprise blockchain technology can enable connectivity and trusted data exchange across business ecosystems. It creates a new type of database that stores and traces data in a distributed, verified, and secure manner as businesses required.
Through blockchain technology, businesses of all sizes can now transact directly and securely with one another. Everyone involved in a transaction will be aware of what and when it occurred. An immutable blockchain can significantly improve connectivity, secure and structured data exchange between your business networks. It liberates value while maintaining privacy, traceability, and security. It adapts dynamically to your organisational circumstances to address any point of friction in your business operations.
Following are the ways of business processes transformation, simplification, and automation achieved through blockchain technology.
- Enabling shared logic coded into smart contracts on the blockchain.
- Enabling the secure and seamless sharing of consistent data across organizations and firms.
- Eliminating fees paid to trusted dispute resolution intermediaries.
- In addition, reducing complexity on all sides.
Let us have a look at what is a smart contract and how it enables frictionless work?
Smart contracts are self-executing contracts that contain peer-to-peer agreement terms. It is a set of commands and data stored on the blockchain at a specific address. In the world of technology, it is analogous to a physical bilateral contract and represented as a smart contract. It is also known as a piece of code. It saves and automatically validates the terms of a document before executing it when those terms are satisfied. Smart contracts streamline the production system for stakeholders while improving process execution and cost optimization.
A smart contract is a technique that operates automatically. It reduces dependency on manual and paperwork. In traditional contracts or rudimentary digital contracts, tasks such as document collection, data entry into the contract template, and implementation, among others, are still performed manually. On the other hand, a smart contract occurs entirely and automatically in a digital environment, reducing or eliminating the participation of roles that add little value to enterprises. It makes it possible to perform a vast number of transactions simultaneously.
The time-stamp process and immutability also provide proof of evidence, making it easier to resolve potential contradictions later on.
A smart contract automatically updates, stores, and reports all information in a unified distributed ledger, which contributes to a better management system. More efficient processes and the elimination of unnecessary components are critical to cost reduction. It heralds the transformation of a new business operation model. More effective processes and cutting off unnecessary components are keys to reducing the cost. It brings a new business operation model transformation.
The frictionless business could lead to higher customer conversion rates, lower churn, and higher account retention, as well as higher renewal rates and productivity (the ability to increase production and sales while lowering costs). Frictionless business removes all barriers to success, allowing it to operate more effectively – doing the right things – and efficiently, with minimal waste and maximum productivity. With the help of blockchain technology, companies can run with less friction and achieve superior results with fewer resources.