There is a repeatable insight that we have gathered over three years of working with Fortune 500’s on Digital Transformation projects; the next wave of enterprise software is driven through inter-firm sales automation leveraging shared global state, governance mechanisms and organizational incentives.
In every value-chain we have discovered that there is a need for standardization across companies related to revenue driving applications.
What is the state of the art today?
1) cloud SORs, paper contracts, legal liability, ultimately mitigate cp risk
2) internal process standardization, tooling, portals, systems, rpa
3) implemented workflows and automation to decrease cycle times
4) production / provisioning teams that reconcile changes (middle-back office)
5) Cost associated with unsolved discrepancies, resolution, time.
What does the future look like to us?
Blockchain based inter firm-automation of revenue cycle including CRM + revenue driving applications + AI/ML in a GDPR compliant manner whereby all participants leverage encrypted, automated real time data for improved workflow process without losing control.
This is the next version of b2b enterprise software.
The cloud axiom is evaporating. The state of the art today is standardization within one company leveraging cloud based saas applications. This leads to top down visibility, metrics and growth. The processes that have implemented within the customer’s instance can be surfaced via portals, communities for partner re-selling, on-boarding but there is still a disconnect in the value chain. The processes are available via the internet, in some cases via mobile device; however across companies they are siloed, and the data is duplicated, not replicated across the entire multi-tenant instance. Across companies there is opacity, there is latency and reconciliation because they are on separate customized instances of the same exact software from the same companies. This is in part because of a lack of trust ie the company is not going to open up their middle / back office system to another company. The second component it especially for enterprise customers is that their is a ton of custom logic and implementation at each company. How else could the customer actually have the product fit their requirements and solve a problem? But what if they could preserve the privacy of their most critical data while using the same exact processes distributed across their entire value chain with all their trade partners?
This type of technology platform could be applicable to a number of value chains that most of the time today are dependent on other stakeholder’s to drive sales automation. Inter-firm sales automation can be applied to:
Brokers and Providers
Retailers and Vendors
Agents and Universities
Vendor and Sub-Vendor
Contractor and Sub-Contractor
Manufacturer and Distributor
So how do we achieve this? How can multiple organizations operate off of the same processes and data as opposed to reconciling the differences in their in-house cloud based systems?
Top Down Approach
Does consortia work? There are a number of consortiums leveraging the state of the art in the industry but does it solve the human coordination problem? Does the technology itself create the incentive for multiple companies to collaborate together? What really is the incentive for an organization to allocate resources to re-developing mission critical revenue processes with other organizations? Let alone, how do you get everyone at the table committed to leveraging global state and shared processes? Coordination problems can be solved by bringing multiple companies into the same platform but what is the second and third level impact? Is it ultimately going to be making the company money or saving the company money?
These are types of coordination and incentive questions companies should be asking.
Bottom Up Approach
What about the bottom up approach? Build a state of the art network with a number of members who have a stake and incentives to govern and operate the network. Build the technology, create a standardized system, incentivize on-boarding, spread out the cost of operating the network and create distribution through the nodes. Discrete use case to start. Is the bottom approach of developing the technology platform first and then finding validators or participants more effective?
What about for Enterprise B2B Sales and Service Automation?
Is there actually an issue with Sales and Service Automation across the value chain. If you were to call the COO or CRO of any Fortune 500 today and ask, “Do you need a solution for standardizing your procurement processes across your network of trade partners?”
Would they say it is a nice to have to a must have solution for their business? Does it impact the customer experience? Cost and time savings of customized implementations? How do we determine best-practice that is constantly evolving based upon the transactions that are coming into the network. Are we even able to evolve or upgrade the system over time?
What if all of the trade partners in a particular value chain leveraged the same application specific blockchain networks? Would this yield the same data and eliminate the reconciliation cost and latency related to siloed, customized, multi-tenant instances? Would there be benefits to multiple parties standardizing on a set of inter-firm business processes?
What are some of the challenges?
Every company believes it has a unique, best practice for serving their customers and driving top-line growth. Standardization internally is difficult at companies as well! There is always the sacred excel sheet or process that rep cannot git rid of, yet, top down ops improvement and a ROI leads to adoption. Standardization across companies is even more difficult. Each company has their own set of processes and different levels of complexity. What are the incentives for an organization to re-architect their systems to a cross-tenancy, distributed standard? How do the organizations agree upon what is in-fact the best practice or the path to improving the network?
How do we ensure that the data that is being created in the network is going to be compliant with privacy-preservation regulation such as GDPR and CCPA? How can a company ensure today the data mapping processes it has implemented to be compliant will be uniform across all of the processors of data in their value chain. Two examples of this are in the AI/ML and AdTech industry. How can a company be compliant when one customer ask for their data to be removed from the controller of the data. That customer profile has already been feed into the ML model and is being used for analytics not just within the company but has been sold downstream to other companies. Does the entire data-set need to be deleted and model retrained? In the AdTech scenario does the aggregation of the data need to recall the batch customer data from the Advertiser and re-sell them a new data set that is compliant based upon the one customer’s request?These are real, very difficult problems that can be solved by moving towards systems that have inherently built in the data-mapping controls to preserve privacy and move away from the cost of retrofitting existing cloud based systems of record across companies.
How does the network continue to operate when a node wants to leave? Do they have the processes and the data when they begin a net new network. In the Bitcoin and Ethereum Blockchains, nodes can leave at will and rejoin but with the pre-requisite that they have to download the entire chain since they left the network. There is in-fact the dissolution of the challenge with exclusion but for network that do not have to download the entire chain exclusion becomes a very real and difficult problem to address.
What are some of the limitations?
The limitations for the companies and users will be customized logic. This will need to be handle in a creative way for each company. While the main revenue driving processes are orchestrated and yield the same data, there will need to be some hybrid solutions.
What does the future look like to us?
The processes will be standardized across the entire value chain leveraging application specific decentralized blockchain networks where companies have stakes in the networks they govern and drive growth from. The data becomes owned by the customer and is in fact first party data permissioned and replicated to specific members of the network. There are cloud/blockchain hybrids for data mapping controllers and processors of client/customer data. The entire front-office, middle-office and back-office becomes an interoperable network of application specific blockchains. The counter-party risk associated with non-performance and non-payment are mitigated by programming the incentives into the network. Inter-firm Agreements, Payments, Files, Messaging are all part of the interoperable network. The same way to enterprise moved from on-premise to cloud based applications, they moved into application specific cloud/blockchain hybrid networks that are evolving over time. There is a cross-pollination at global scale for blockchain runtime modules, services and privacy preserving software.