Outsourcing Providers and the Blockchain Benefit
Blockchain is finding various applications in emerging domains — the contract management process in an outsourcing environment, being one of the latest. This is a result of IBM and Bank of Tokyo’s decision to pilot a project based on the open-source Hyperledger Project — the Blockchain platform led by the Linux Foundation. The application of Blockchain to a well-established outsourcing model is the starting point for companies to explore Blockchain in a low-risk manner.
IBM and Bank of Tokyo have dedicated their attention to the pilot project, which aims at creating a contract prototype on a Blockchain. The objective is to up the efficiency and accountability of service-level agreements in business transactions, such as, outsourcing arrangements, primarily those which are multi-partite. The idea is to use the Blockchain to manage contracts, starting fiscal year 2017. The next step would involve managing SLAs closely knit with the system on an end-to-end basis, by the end of 2017. Clearly, the agenda is laid out — to give Blockchain the chance to revolutionize a key process like contract management through “smart” management.
Blockchain technology is the next big thing in Fintech and companies are experimenting in the space. The outsourcing model provides the ideal platform since through it, companies can now digitize every aspect of the contract. Of course, the fact that both the companies can learn along the way, through the outsourcing partnership is an add-on benefit. With extensive experience of working together, both IBM and the Bank of Tokyo have more leeway to work with better overall context and operational experience. The idea is to create Blockchain-based processes that allow for fully automating invoicing and payment processing between the two giants. Such an automated and reliable approach to contract management is expected to aid efficiency, accuracy and speed.
The benefits of such an approach go beyond merely the two involved entities. With widespread use, there shall soon develop quality and process standards and regulations for Blockchain contracts and maintenance. This will secure the code and the process, enabling better transaction security across the industry. Moreover, in multi-vendor scenarios, where a plethora of variables from different vendors interact to create outcomes, tracking accountability will be easier with Blockchain. Once an SLA is created, each vendor will key in his/her input that goes into delivering that SLA, and this in turn shall be visible to all related vendors. Thus, a shared-working environment shall develop, with data transparency and access streamlining operations. This can prove to be the answer to an increasingly collaboration-based work environment.
Customers must first exhibit a commitment to try out the Blockchain technology, and service providers must offer clear and concise offerings to plug it in the existing processes. This calls for innovation in process and thought, and a change in mind-set on both parts.