Opportunity #1: Streamlining cross-border business
Because of the ease of transfer of information, and the automated tracking of every transaction, blockchain can simplify and partially automate elements of accounting and compliance, making it easier to do business with new global customers and enabling elements of the audit process to be completed with even greater accuracy. Auditors will therefore be able to focus attention on non-automated elements of the audit.
“Blockchain has increasing relevance to the oil and gas industry as a mechanism to reduce operating cost. Even more relevant, however, is blockchain’s ability to transform the contracting process given its aptitude to provide a secure form of collaboration across multiple parties” says Fay Shong, our Oil & Gas Strategy Leader.
Considering blockchain’s origins as the underlying technology of the virtual currency bitcoin, it is also likely to facilitate new systems of foreign exchange via virtual currencies that can further reduce the cost of cross-border business.
Opportunity #2: Encouraging adoption of the IoT
The rise of the IoT is set to bring a new era of devices and networks that blend the physical and digital worlds. At the heart of this new transformation is the near real-time collection, transmission and analysis of data.
“As the oil and gas industry increasingly leverages sensor technology across upstream and downstream assets, the ability for blockchain to store transactions and accounting data directly on these devices can compress process time by connecting assets directly to services contracts,” says Shong.
The challenge has not just been how to transmit such sensitive data securely — but also how to encourage suppliers of data to provide it in ways that are cost-effective for them.
“Blockchain enables you to take the generated data and transmit it securely and in real-time, in a way that was previously very expensive,” says O’Brien. Its security and cost-effectiveness now means “you can sell micro bits of data and receive micro payments in exchange — all in near real-time.”
This means that anyone — from the largest organizations to individuals — can become data providers and receive payment in exchange. This should encourage the adoption of more IoT devices, as smart devices no longer become simply expensive new gadgets, but potential ways to earn money.
Opportunity #3: Changing what business you are in
With blockchain enabling secure IoT data transfer and payments, multiple new opportunities present themselves to the canny businessperson.
For instance, “You can put a sensor on a tractor,” says O’Brien. “This can track soil or weather conditions in near real-time.” As well as providing the farmer with much more information to enable them to adapt strategies to improve output, they could also sell this data to third parties that want to predict yield, perhaps for investment purposes.
It means you may no longer be in the business you think you’re in. As O’Brien puts it, “The tractor manufacturer or even the farmer shifts from being simply the producer of agricultural equipment or crops to being a supplier of information.”
This in turn should vastly increase the amount of available data on every aspect of life and business — which with the right analysis will facilitate whole new ways of working and thinking, enabling the development of new strategies and new business models.