Rapid Digital Transformation
Forced by the Covid-19 pandemic to institute drastic changes, most companies were caught off guard. For the lucky companies that provide essential services and whose employees can work from home, that means adopting a video conferencing platforms and seeing how peoples' homes were transformed into offices: cats walking across keyboards, children begging for attention. And experiencing "Zoom Bombing."
It's been a wake up call for the unprepared and a nonchalant wave of the hand for those of us adept at hiding our PJ bottoms in video conferencing.
I've been attending a flurry of online conferences around Blockchain and how it could improve healthcare, supply chain and financial systems around the world. The US is a laggard in adopting these open, distributed, secure platforms partly due to our legacy digital infrastructure. But the vision for the future of digital transformation is crystallizing for many transformational companies.
The Covid-19 pandemic has immediately revealed a broken supply chain serving food and manufacturing for the healthcare system here in the United States. We've seen confused and disorganized purchasing from global companies and low inventories as critical supplies run short, shipments stuck in port, competing bidding at the federal and state government levels. Not to mention the impact on our economic infrastructure, the difficulty in global transfer of currency and the stock market.
Smart Contracts
This pandemic pause in our economy is a great opportunity to apply digital transformation, perhaps in small steps at first. Smart contracts is one such step and is already being used in the real estate business. Smart contracts are the basis for peer-to-peer blockchain transactions, generating an immutable transaction history - the "chain" - where each transaction and its pertinent information is a "block" of info on a secure, distributed ledger that exists on a difficult-to-hack distributed network, like the Internet.
Change management company TekSystems has published their findings in a statistics-laden and beautifully designed report called "2020 State of Digital Transformation" (published before the Covid-19 pandemic). They describe digital transformation as, "...Technology and business initiatives—from modernization, to cloud migrations, to digital platforms...the process of using digital technologies to create new—or enhance existing—business processes, culture and customer experiences to meet changing business and market requirements."
Their research shows nine out of 10 C-suite respondents say their company is fully embracing digital transformation. So what's holding up advances in technology such as blockchain? It's a lack of awareness and understanding of the value proposition, how it works, the user experience and reduction of friction. It also is because of the US economy's capitalistic approach to profits over people, the need to deliver shareholder value, lack of a willingness to collaborate using worldwide standards and other reasons.
The World Economic Forum states that "The need for a globally-connected supply chain system is clearer than ever." The example of medical supplies, such as personal protective gear and test kits, is all too close to home. There's no way currently to determine the world-wide inventory, match and redirect it to the demand. Blockchain would solve this problem.
How Does Blockchain Work?
This month the World Economic Forum in collaboration with Deloitte released a white paper on a framework for blockchain interoperability. It explains how supply chain blockchains “help build end-to-end solutions across multiple supply eco-systems.” For a quick summary of the definition of blockchain, here's the WEF's video:
Caveat to Rapid Transformation in Blockchain
Blockchain is still in its infancy as a technology with some drawbacks. An interesting opinion piece on Coinbase, by author Maja Vujinovic, calls slow adoption of blockchain, "A human problem, not a technological one.
"We’re all aware of the resistance to innovation that exists within companies and other organizations, but we tend to describe it in clinical, structural terms and so miss the bigger picture. We need to go deeper," says Vujinovic.
"We must address the underlying fears that guard against meaningful change...Power, competition and profit motives create these barriers and lead to a waste of resources, ideas and time. The central issue of self-interest results in a duplication of work. Ten different companies will tackle the same problem, each developing their own 'best versions of blockchain.' They compete for dominance when a collaborative approach could better solve the problem at hand.
"Technology is not the obstacle here. If blockchain is to scale to the point where it can be relevant to the existing economy, then, we also need to change the mindset and motives that drive the crypto startup community.
"Harnessing the potential of blockchain is not a technology problem, but a human one."
So these are very big mindset changes that won't happen overnight. BUT - we can take small steps to help fix our supply chains with smart contracts.
The author, Maja Vujinovic, a member of CoinDesk’s advisory board, is the CEO of OGroup LLC and a former Chief Innovation Officer of Emerging Tech & Future of Work at General Electric. Vujinovic concludes,
"It is our responsibility to inspire this ideological change, to break free of models that optimize only to the demands of the existing capitalist system."
Now is the Time
It will take worldwide collaboration with a network of tech developers to build a supply chain system that is adaptive. It must meet the needs of manufacturers, international transportation, distributors, resellers, retailers, and recyclers. The hurdles the US face are political divisiveness, an economy based on capitalism and tight financial regulations that benefit big business. Success requires that people change their attitudes and focus on openness to solve for connectedness in our supply chains.
To tackle resistance to change, Teksystems concluded their 2020 State of Digital Transformation report with these tips for business transformation.
TEKSYSTEM'S TIPS TO DIGITAL TRANSFORMATION SUCCESS
- Make your customer the center of your digital transformation vision.
- Secure consensus and conviction among senior leaders regarding digital transformation goals—utilize that alignment to break down organizational silos.
- Cultivate a culture that embraces change and agility. Identifying the right metrics, measuring, and making data-driven decisions are critical to digital transformation success.
- Organizational change efforts cannot be underestimated.
- Identify the skills and expertise required to execute digital transformation efforts and determine how workforce models should be aligned to digital business.
- Implement the right technologies that will achieve the desired outcomes and think about how they can be scaled across the enterprise.