THE IMPACT OF BLOCK CHAIN
Business Information Systems
APRIL 26, 2023
STUDENT ID:
2121804/1
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Introduction
Blockchain is a tool recently developed with a variety of usage inside the different aspects of the
organization in relationship to the corporate strategy. Is essential to evaluate the hard and soft aspects
of the impact that blockchain has upon the failure and success of its appliance to the corporate
strategy, and how can it facilitate or challenge the company in order to archive expected standards.
Therefore is essential to identify the characteristics of the blockchain since its creation and the current
development to optimize the entire value chain, satisfying a modern approach to transactional
processes, as well as sufficient implementations inside the value chain.
In depth analysis and collection of information related to blockchain may help to facilitate the
understanding of the impact that this new tool has upon to the food sector and its contribution to the
growth of the company DeliverEat after successfully being established.
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Identify and evaluate the characteristics and significance globally of blockchain.
Blockchain Characteristics and Evaluation.
Blockchain was initially developed in 2008 by a group or a person under the pseudonym of “Satoshi
Nacamoto” and issued to the public as a distributed ledger. Based on the work created by Stuart
Haber, Dave Bayer and W. Scott Stornetta, with the initial intention of implementing the blockchain
within the bitcoins cryptocurrencies, creating so the first digital currency, and utilise the bitcoins
cryptocurrencies to solve double spending digital transactions, that is an imperfection in the digital
transaction protocol, which in the same digital token can be used in multiple digital transactions.
(Oberhaus, 2018) (Marr, 2018). Developing this blockchain process inside the digital transactions
with the help of the cryptocurrencies, which avoid any type of imperfection as the case of the double
spending issue, will effectively facilitate and improve the era of digitalisation. This process also,
prevent third party transaction processing such a paypal, apple pay google pay, etc. Drastically
improving and accelerating the whole transactional process, due to any failure coming from the third
party involvement.
A blockchain is a share ledger, or also called distributed ledger technology (DLT) which is a digital
data geographically distributed across institutions, countries and sites. With the particular
characteristic of not being a centralized database (a data that is store, located and maintained in a
single central place), consequentially it does not have a single central point of failure and thus,
benefiting for not depend on a central administrator. (Government Office for Science, 2016)
(Scardovi, 2016) (Majaski, 2021). Adopting a digital transaction process that avoids single centralised
administration will evade any type of disturbance coming from a single failure in the central
database, preventing so a snowball catastrophe from a single damage on the central administrator.
Blockchain, possesses the attribute of continuously grow a list of different records in blocks, securely
stored and linked throughout CHF (cryptographic hash function) creating a chain, as every single
block keeps important information from the previous block, such as: Trusted timestamping, which is
a process of securely keep records of creation and modification time of any document; A
cryptographic hash that is a hash algorithm with a special property desired for the cryptographic
application; And finally, a transaction data in a form of a Merkle tree. (Menezes et al., 2018) (Majaski,
2021). The cryptogram functions count with many forms of authentication in order to be extremely
secured, such as: InfoSec (information-security) applications, which is a practice and reducing the risk
of inappropriate or unauthorized access to information/data, including unlawful use, inspection,
deletion, disruption, modification, disclosure, devaluation, corruption or any type of recordings of
such a information. (Curry et al., 2018) (Joshi et al., (2017) (Fletcher, 2016). Therefore, this makes the
blockchain information strongly hard to access manipulate or corrupt from unauthorized source,
satisfying a high level of security and thus, the tranquillity of the users. Such a process that avoids
third party involvements also prevent the whole process to be hacked or any type of information
being filtrated due to the nature of the current “clumsy” and tedious transactional process.
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Blockchains and commonly administrated by a P2P (Peer to peer) computer network distributed
ledger for public usage, where a point network or diagram usually called “Node” or “Data nodes”,
conjointly are introduced to a coordinating process or protocol in order to reach a consensus, in any
data value during a digital transaction or other type of computing. This process is denominated
consensus algorithm, which is a protocol to agreeing on what transactions commit to a data base,
considering also the exact order, and thus add a validate transaction block. (Iansiti, 2017)
According to Bernanrd Lunn (2018) adopting a blockchain transaction process as a payment rail,
which is a payment platform in charge of transferring money from a payer to payee, will facilitate
millions of transactions within seconds avoiding any type of fraud or disturbance.
Utilising Blockchain as a payment rail transaction process that could avoid the interference and
intermediate payments to third parties which allow millions of transactions in seconds for the users
and companies, counting also with a strong security system that is not dependant of a central
administration, is a solid way to step into the new era of digital transactions as a company and
individuals. Therefore, is important to consider in depth some of the benefits of including it in the
company, analysing the organisational opportunities and challenges in the specific sector desired.
The Analyse the organisational opportunities and challenges of the food sector by
blockchain.
Every business depends on information. The quickest the information travels, the more reliable the
information would be facilitating the business processes. Therefore, blockchain plays an important
role inside the organization as it provides a transparent, shared an instant information that is only
accessible to permissioned members, store in such an immutable ledger avoiding any type of breach
or filtration in the information (IBM, 2020). As an organization being able to speed up any
transactional process will contribute to the growth of it, as more processes can be archived in certain
amount of time. Blockchain provide also a much reliable and secured information of such a process,
making it more accessible and costumer friendly, rather than third party involvements that hinder
the smooth flow of the transactional process.
Blockchain is such a flexible and reliable tool that can be used efficiently in almost every process
related to the organization such as: order tracks, accounts, production, payments, and many more.
Contributing so with a much more transparent information, as all the members share the same single
validated information. Which in the end to end transaction of such an information can be verified in
detail, providing so much more efficiencies, opportunities and confidence, not only to the
organization itself, but also to the costumers that make usage of the products and services (IBM,
2020). For our organization DeliverEat, is essential to count in such a reliable tool that facilitate all
transactional process as the food sector will benefit immensely from faster orders, payments,
production and tracking orders as it is our value, providing the costumer a quicker response, with a
transparent and reliable information with immutable record as the transaction can not be alter, and
in order to fix a error in any transaction, another transaction block must be created to reverse the
error, and so both transaction can clearly be visible (IBM, 2020).
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A smart contract, which is a program stored in the blockchain with the intention of automatically run
once certain criteria is met, such as defining conditions for corporate bond transfers, execution of
agreements without intermediary’s involvements or time wasting, etc. Allowing blockchain to take
over these duties will benefit companies such as DeliverEat with speed, efficiency and accuracy by
automating the execution of the contracts, avoiding paperwork processes or manually filling
documents. (IBM, 2020). By automating the management of these processes DeliverEat can be
confident to be receiving accurate and timely data, assuring the information and records are
completely confidential within the network members with permission of access to the information or
records kept (IBM, 2020).
Another important benefit DeliverEat can benefit from blockchain is the solid security it possesses, as
non transaction can be removed or deleted, not even the system administrator. All validated
transactions are constantly recorded, and so this makes all transactions immutable (IBM, 2020). This
would help DeliverEat to keep a record from all validated transactions without having to stress about
losing the information, or beneficially alter for corruption. Transparency in every transaction not only
will have a huge impact inside the company as everything will run smoothly but also in the image of
how the company is being perceive from the outside, with a more reliable figures and clearness.
of consumers say that knowing
where food comes from is veryto-somewhat important. ¹
of Americans surveyed said they
would pay up to 36% more for
products that are responsibly
made and transparently
sourced. ²
of consumers surveyed said they
would be more loyal to a brand
that offers complete
transparency. ³
(IBM, 2020). IBM Supply Chain Intelligence Suite- Food Trust | IBM
As it can clearly be appreciated in the previous picture transparency not only will bring benefits as
efficiency in the process but also will improve the position of the company and its growth. According
to IBM consumers are willing to put they money in companies that feel more reliable and trustful,
with 94% of consumer desiring to be loyal to a company that offers complete transparency, as they
may feel identified with the organization, and thus generation a much better reputation and a long
with it, improvement, development and growth of the organization.
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“IBM Food Trust achieves new levels of trust and transparency, making food
safer and smarter from farm to fork.” Scott Gottlieb, former FDA
Commissioner
DeliverEat is a company that is willing to improve the brand image and transparency, although
DeliverEat’s value is to focus in facilitate and improve the efficiency on the orders, is also important
for the company position themselves as a transparent and reliable company, commenting to a more
sustainable environment inside and outside the organization. Therefore, blockchain play an
important role in helping DeliverEat to archive their goals, and so become a company with a efficient
process without having to sacrifice the reputation and brand image.
Blockchain is a vital part inside the food chain, as part of the modern world, due to new regulations
and compliances, in order to ensure a food safety and more transparency inside the company, where
according to IBM (2020) “The Food Safety Modernization Act (FSMA) rule 204 requires that
companies provide traceability records digitally within 24 hours of the FDA’s request”. Therefore,
as part of becoming a flexible company, willing to survive and compliance with the regulations and
laws in the current world is essential to consider apply such a tool as Blockchain, as it certainly will
contribute to a safer supply chain and to compliance with the new regulations established by the
government (IBM, 2020).
Blockchain is a relative new tool which was recently developed, and therefore is important to
consider its role inside the corporate strategy to apply it correctly, in order to make the most of it,
avoiding any sort of hindering inside the organization procedures. As George Lawton has stated
“Blockchain is proving to be useful in the supply chain, but without a strong understanding of it
and a viable use case, your organization can run into several problems along the way”. (Lawton,
2019)
According to George Lawton (2019) Forrester, which is a leading global market research company,
estimates that approximately 90% of the companies DLT projects that started between 2015 and late
2017 have already been discontinued or will never result in operational system, and this failure is
attributed to starting a blockchain project without due consideration of a viable use or technical
feasibility. Martha Bennett which is principal analyst at Forrester suggest starting from understanding
what is it that the company is willing to archive when applying blockchain in order to improve the
supply chain (Lawton, 2019).
Applying blockchain for the supply chain requires a lot of groundwork, as majority of the experiment
are designed to be tested quickly and is hard to emulate a plan for a real scale, consequentially, this
causes a lot of failures when entering the market inside the hard reality, highlighting the number of
important factors omitted or forgotten. Therefore, to avoid this type of situations is advised to
collaborate with other companies in order to identify technologies, business processes and practices
in real scenarios that can be apply to work supply chain management (Lawton, 2019).
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Analyse how value is created and delivered in DeliverEat business by
blockchain.
DeliverEat value is to archive the quickest transportation and delivery service food by becoming the
main platform for meals kit also, providing flexible solutions for its user. Therefore, blockchain plays
an important role inside our organization, as blockchain can provide a solid support identifying the
gaps in the supply chain and deficiencies in production. According to IBM (2020) blockchain is
designed to help identifying deficiencies in production and monitoring processes for end to end
traceability exposing the vulnerabilities that can be eliminated inside the food sector, and
consequentially improving the entire value chain.
In order to become the quickest transportation and delivery system, DeliverEat must keep the cost as
low as possible inside the whole supply chain, which is something that most of the companies fail to
do so. “Food Safety magazine counted 337 food safety recalls in the US. Companies surveyed put
costs at up to $30 million per incident” (IBM, 2020) (Foodsafety Magazine, 2020). Which in some of
the amount is from direct cost and some other from indirect cost such as: penalties, lawsuits, lost in
sales and finally damage of the brand image. This without considering the number of stocks of food
that is constantly wasted and consequentially the consumer trust ruined (IBM, 2020).
As not all the companies can quickly identify the cause of the food incidents due to the numbers of
days or weeks that take to track a mix of digital and paper food documentation across the complex
network of distributors and suppliers (IBM, 2020). Therefore, blockchain can support DeliverEat with
a digital food system where network participants can have access, in order to identify the gaps and
track almost immediately the cause of food incident, promoting trust and transparency ensuring a
better and safer food system (IBM, 2020). Reducing so the amount of money and time wasted
facilitating so the way to archive DeliverEat value also providing flexible solutions to the costumers.
“IBM Food Trust creates a secure, shared and permissioned record of transactions. This enables
unprecedented visibility during each step of the food supply chain, so you can achieve new levels
of trust and transparency, making food safer and smarter from farm to fork.” (IBM, 2020).
A digital food chain working with blockchain will enable all the supply participant to work in the
same level and understand each other easily in order to collaborate and operate in a more efficient
way with the strength of being flexible to quickly adapt to any change due to the easy access to
information and quick response to difficulties (IBM, 2020). This, will provide DeliverEat a more
flexible and optimal environment that will certainly support the idea of compile the value chain
throughout the different stages of it. And thus, improving the process in order to create a more
realistic and archivable corporate strategy and values, considering a proper implementation to avoid
at any cost the hindering of a smooth and reliable operational process thanks to blockchain.
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Conclusion
Its can be concluded the essential impact that blockchain may have upon the different aspects of the
corporate strategy and how assertively can be used and applied correctly to develop and improve the
current value chain. Is evident how blockchain help facilitating the transactional processes and many
other sectors inside the organization and food sector, if utilized correctly with the sufficient knowledge.
Therefore is vital of the company to understand and align the strategy and vision with the right
appliance of the blockchain in order to make full use of it, and finally archive the desire goal in the
current modern world.
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Reference list:
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