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Blockchain, the payment technology that underpins the digital currency bitcoin by creating a “distributed ledger,” or database of transactions, might just be what drives the next level of digital hype as we enter into 2016. It is already the focus of a cover story in The Economist (The Trust Machine: How the technology behind bitcoin could change the world), the subject of numerous fintech conferences, start-ups and on the research agenda of every systems integrator serving BFSI and the Public Sector. But, that’s for a good reason. It has the early makings of being a very disruptive idea, arguably much more disruptive even than the bitcoin currency itself, which has been dogged by scandal, suspicion and more than a little greed.
It’s not our place here to re-tell the story of bitcoin, nor even to delve into the math, cryptology nor the methodology behind blockchain, there are other sources included the aforementioned article in The Economist, which can serve that role. No. Instead, we are interested in looking at how a new technology could drive greater relevance for an idea—Business-Process-As-a-Service—that has been slower to achieve market presence than was thought over the last several years, can be reignited by the potential of blockchain.
As a technology, blockchain systems have a chance to disrupt the entire payment process industry by replacing the roles of various third parties that exist act as intermediaries in transactional reconciliation. It is that same process of reconciling transactions, that underpins much of the task work done by BPO, whether in payments, finance & accounting, supply chain management, public sector records management and more. BPaaS was supposed to remove this often manual, transactional work with its delays, exceptions, flawed datasets, and more, by automating these processes. Yet, most BPaaS solutions have been deployed not across an industry sector, but within the walls of individual enterprises, which limits their ability to act as solutions for counterparty exchanges. It is very hard to share technology solutions in the back office as it turns out and, as a result, these same reconciliation processes are only slightly more efficient after the arrival of the platform solutions, than they actually were before.
By putting shared data out into a commonly trusted system of record, Blockchain offers hope for BPaaS solutions that seek to build across enterprises and become “fabric of the industry solutions.” Now BPaaS can solve for problems of trust and reconciliation between parties with a shared visibility and control over the transactional data thereby encouraging the adoption of common platforms.
For this to happen, current BPaaS solutions will need to be re-written from the ground up around blockchain systems which, in turn, will need to become more robust, independent of the bitcoin market and resolve some their own limitations and concerns about the required computing power, environment impact and required security. This isn’t a solution for today, not even for the immediate tomorrow but for those of us interested in how BPO can become BPaaS at a systematic level, it becomes a new topic to follow, reflect on and discuss as we collectively move towards an As-a-Service Economy.