This is a guest opinion post from Susanne Somerville, CEO of Chronicled.
Blockchain has been heralded for the last five or more years as the transformative technology that will change everything in how companies do business. In that time, it went up and then down the hype cycle, and in 2020 we found some of the appeal had fallen off for corporate executives that had been promised a lot and delivered little.
But there are companies, like Chronicled, that have been quietly focused on real use cases with committed companies, building the software, the integrations, and going live with solutions that fix real business problems. My prediction is 2021 blockchain based solutions, now in production, will finally start delivering on the promises and start a new wave of excitement as the path is clear on how companies can implement and gain business value.
However, which promises will be delivered?
Chronicled has been building solutions for the MediLedger Network, a permissioned network for the Pharmaceutical industry since 2017. We have spent a lot of time with companies in the industry figuring out how technology needs to be architected to suit the industry’s needs: preserving privacy while solving business problems that could not be solved before. With the roll-out of our Contract and Chargeback solution this year, we found the inadequacies of Electronic Data Interchange (EDI) messaging for executing business transactions, and believe this will be the traction many companies find in 2021 to start adoption of enterprise blockchain.
EDI enables any amount of data to flow directly from one company’s system to another by following various industry standards. Compared to previous E2E communication options, EDI was a huge improvement at the time. But what if trading partners could integrate systems the way companies integrate systems internally – directly with each other?
|Data validation and rule enforcement?||Yes||No|
|Control over both systems being integrated?||Yes||No|
What good is an EDI standard if you have no real way to enforce it — or even know — that your trading partners are following it? And how much more useful would EDI standards for transactions and data exchanges be if we could certify enforcement across the entire industry?
The reason that this doesn’t happen: there is a trust-gap across enterprise boundaries. A company cannot control its trading partners IT systems, and since EDI can propagate errors (which could be intentional or accidental), humans are needed on both sides of the trust gap to verify, validate, check, reconcile, and sign-off on every single batch of transactions that is processed. This leads to a good-sized team of middle-office personnel doing a lot of low-value activity.
Herein lies the opportunity: by harnessing blockchain as a neutral enforcer of correctness of data exchanges and transactions, we can move to a real-time model of inter-company trade reconciliation that is free of errors, bringing enormous efficiencies to all parties involved.
With the MediLedger Contracting and Chargeback production transactions starting next month, we will be eliminating EDI messages and demonstrating blockchain-based business rule enforcement and perfect data alignment between trade partners. This will eliminate many of the current errors, which will be a huge win for our customers.
We foresee the EDI standards library becoming a bit of a roadmap for blockchain-based solutions development. The effort and collaboration that went into developing each EDI message standard demonstrates a strong desire to create efficiency between trading partners. And it’s a signal that an industry could also benefit from having neutral technology adjudicate every transaction and data exchange to guarantee accuracy and prevent errors from ever happening.
2020 surprised all of us, so let’s see what 2021 holds. With all the great work on solving blockchain for enterprise in the last five years, I think next year will be the tipping point to delivering value that will accelerate adoption going forward.