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As costs rise across the economic spectrum, businesses are seeking ways to reduce expenses when purchasing tech and IT equipment. To reduce roaming and identity fraud, telecommunications companies are exploring blockchain technology as a possible solution to rising costs and data breaches.
Blockchains are distributed ledgers or digital databases shared among peer-to-peer systems. The difference between a blockchain and a normal cloud database is how it fills in information. Using a data structure known as blocks, information is packaged and permanently closed off after a set or specific amount of data is recorded and validated. It then creates a new block that links to the previous one, ready for information to be entered.
It is not possible to alter or remove data once it has been recorded this way. As blockchains are a decentralized record of all transactions in a network that can be managed by more than one member at a time, as well as display a timeline of events via links between data points.
How Can Blockchain Reduce IT Procurement Costs
By not using a centralized server, blockchain technology reduces the amount of intermediary expenses an organization can accrue. Since blockchain records data in an unalterable way, complex contracts and records can be verified and transferred without the need of tertiary parties. Allowing you to keep that service charge costs for yourself.
“There was a couple in New York who bought a house using blockchain,” Tanya Seda, a Blockchain PSU Executive Board Member, said. “They didn’t have to pay title tax, inspection fees, or realty fees. All those intermediaries were eliminated because they had to put all those variables on the blockchain marketplace to be verified.”
While blockchains are not yet applicable to every aspect of your expense recording, they do offer more options when it comes to IT procurement. Blockchain can save you the most money by reducing human error. Generally speaking, if an analyst and accountant are two nodes in a blockchain, and both verify the same information, there effectively can no longer be ongoing error as the previously recorded information will always have to match the next occurrence, unless there is a recorded reason as to the change.
Blockchain is better able to track data and transactions than through traditional means, ensuring the authenticity of goods at the source and tracking a purchase throughout the supply chain. With the removal of third-party systems (such as banks), you can more easily and quickly track purchases, saving your business time and providing real-time transparency in determining the quality of products and services.
“The standard blockchain handles distributed ledgers,” Tanya Seda explained. “These transactions are cryptographically signed, (which) is the most important element. When they are cryptographically signed, you go from one block created to the next block. So now you know that every block that will follow the last block in the length of the chain is accurate, as there is built-in trust and integrity through the history of the ledger.”
The multiple verification process allows you to determine quickly if a new expense has met your company’s needs without having to worry about being scammed by unknown suppliers. Using blockchain to mitigate the risks associated with working with new parties could lead to new relationships between smaller businesses. The system allows both vendors and buyers to rate how well it meets the other’s needs, and that rating is public.
Blockchain is still a growing and evolving asset of both telecommunications and to the business ecosystem. These systems are still early and their implementation at a large scale and have only started to get into large scale use (such as with credit card companies keeping track of transactions). Analysts believe that blockchain technology will still need three years of refinement before being readily used on a massive scale.
Industries that have seen successful use in implementing blockchain have been the government, healthcare, banking and real estate industry. But as it stands, blockchain is more so used as an efficient tool to reduce cost and save time in these sectors rather than a full replacement of regular commerce transactions or data management that ensures the truth of documents and unalterable contracts.
With technology in the telecommunications sector always growing, it is important to learn as much as you can about these potential growth opportunities available to you and how to recognize them. AOTMP® urges those looking to learn more to look into blockchain and consider how it can save you money on your companies’ operational expenses and look into the potential advantages of early adoption.