Most of the contemporary interactions in the marketplace have shifted online. More and more people have understood the value of internet-based platforms and networks with their affordable prices and convenience. But more importantly, it is the trust and transparency which matters more. Other businesses are catching up to this phenomenon and the use of Blockchain for Business proves to be the ultimate tool for bringing trust and transparency into the system.
In simple terms, a business network is a complex group of entities with a common objective. They work on the principle of inter-firm cooperation to gain the advantage of synergies. When a business network is initiated, there must be 4 broad considerations right from the beginning: business, operations, legal, and technology.
In this article, we look at how the business dimension affects a blockchain-centered business network. Let’s begin by understanding the aim of the business dimension.
The primary goal of a business network must be initializing and achieving value for all the stakeholders in the network. Priorities might shift a bit from time to time but such plans must be clearly articulated and explained. The process begins with defining whether it is an intracompany or an intercompany, how is the ownership and organizational structure, and how all the participants/stakeholders fit into the broad scheme. Goals and actions must never affect any particular stakeholder negatively and must be properly communicated.
The effectiveness of your business dimension can be measured on the following 4 elements:
1. Business Intent
The network must begin with answering the fundamental question, “What does it want?”. Relevant organizations who share this common objective can have the intent and vision which becomes the fundamental block of the network. Once the “what” is defined, the company should start searching for the ‘how’ i.e. prepare a plan to achieve the defined intent.
The next step includes creating a process where each participant identifies their contributions and the advantages that bring to the solution of the proposed intent. After identification, the goal must be the optimization of the entire plan from the platform perspective. It can begin by identifying the life cycle of assets held across organizations and listing them on the platform. Then, a Business in Blockchain can prepare an action plan with defined roles, cost-benefit analysis, and the process flow to achieve economies of scale and low-cost production.
2. Business Model
Decentralization should be the focus when determining the overall governance plan with regards to ownership and operability of the network. The foremost step should be to establish ownership of each participant on the business network. It is also important to look for country-specific rules and regulations on business processes if the network consists of participants from multiple countries. A Blockchain Development Company provides assistance in matters related to cross-country regulations.
Now, the business model must contain a cost and revenue model, a formula of contribution for expenses and distribution of gains, and the expected internal rate of return. A preliminary expansion plan with more organizations, business functions, and better capacity for the future must be planned into the current processes.
The more the merrier might not be the optimum business strategy while choosing the participants. All participants must be carefully chosen with respect to cross-industry and cross-geography gains in mind. The more diverse and vibrant the network, the better the gains for everyone. Participants perform the real collaborative function in the network and hence participation type plays a major role. The answer to “What function and step can a participant streamline?” provides us with insight if the participant is really adding value to the business network.
The pillars of trust and transparency must always stay in focus and direct participation by organizations must be encouraged as opposed to indirect participation. Organizations should be identified and segregated based on their direct stake in the network and their ability to validate a transaction. At last, the roles and responsibilities of each organization as well as each persona in every organization should be identified.
4. Value Proposition
The value proposition must be at the center of every decision from the conception till the final production/sale. A network can derive greater value from more cross-industry participation, the level of decentralization, and the incremental number of transactions the network is able to handle.
In the entire process, data is the main commodity that is shared across organizations with the help of a Blockchain Development Service Provider. Hence, globally accepted standards must be followed along with the transparency of such data movements. A decentralized ‘no-admin’ network can fulfill all the objectives of a business network. Control of the entire network by a single ‘admin’ could shake the trust of the entire network and, at times, incentivize unscrupulous behavior.
A business network must always keep the pillars of trust and transparency at the forefront. The business intent of all participants must match their value proposition for Blockchain in Business Development to do its wonders.
comA look at the business in blockchain-anchored business networks