As tech-friendly company culture continues to break down adoption barriers, blockchain hits product innovation and digital transformation roadmaps. Now more than ever, the technology is used to achieve future achievements, such as quantum technology.
In this guide, we explain what digital transformation is and how blockchain will be used to drive future business innovations.
What is Digital Transformation?
We’re in an age of keyboard-and-screen disruption. Businesses encourage experimentation with machine learning, AI, chatbots, and other emerging technologies to drive innovation.
Digital transformation is the application of technology to disrupt and improve existing products, services, and industries. Businesses achieve digital transformation by delivering strong user experiences.
A recent Gartner survey shows that 73% of businesses ranked digital transformation as a top priority.
Users are at the center of digital transformation, with deep customization and human engagement at the forefront of technological innovations.
User demand is shifting towards:
- Minimal-step processes
To better serve users, an increasing number of businesses are evolving from tech company to tech-enabled companies. These tech-enabled companies blend emerging tech with human interactions to deliver an experience rather than just a product.
Digital transformation is the driving force behind this change and innovation. With it comes more opportunities to:
- Identify areas of growth.
- Take advantage of improvement opportunities.
Can you think of a digital breakthrough that broke technical barriers or delivered a new format to satisfy user needs? That’s a digital transformation.
Google’s dynamic online tools is a well-known example. Users were frustrated with static word documents until Google introduced multi-user editing with Google Docs.
Among the many technical solutions to digital transformation, blockchain stands out. Blockchain influences the ways businesses think about their own internal processes. Current adopters predict blockchain as the new internet, or Web 3.0.
Blockchain’s use cases alone hold promising potential to change the way we approach industry-wide problems. Even now, the technology is used in:
- Supply chains
- Digital rights management
Virtually every industry has pain points that lead us to think blockchain will drive the next digital transformation.
Blockchain and Digital Transformation
What is blockchain?
Before you can understand blockchain as a disruptor, you need to first be familiar with how the technology works.
Blockchain is a self-updating, digital spreadsheet that records and secures data fed into its network. This data is packed into permanent blocks by mining and user-submission.
It promises transparency and security through decentralization, meaning that no one entity controls a blockchain network.
- Near impossible to hack.
- Data cannot be overwritten.
- Users have more control and privacy.
It’s important to note that blockchain is not siloed into cryptocurrency. Blockchain is a framework that’s allowing innovators to apply digital transformation to reimagine industry-wide business processes. In fact, many believe that blockchain will bring on Web 3.0.
Read more about blockchain in our in-depth innovators’ guide.
Advantages of using Blockchain
Depending on its use, blockchain’s potential to drive change is astounding. We asked our Head of Digital Studio, Cody Musser, about the impact of blockchain on digital transformation,
“The market’s adoption of blockchain in so many other industries and use cases is a great example of how powerful technologies can be when they’re created more as a process than a single tool.”
Blockchain was designed to build trust and transparency between users and developers. Trust is created through the use of permanent data storage that can’t be tampered with or deleted.
Quality control and high costs are two supply chain concerns that blockchain addresses by tracking its blocks of data. The food industry is already preparing for major changes brought on by blockchain.
IBM Food Trust plans to use blockchain to create a fully transparent food supply chain. Following the movements and actions of each ingredient allows food tracking “from farm to fork.”
- Verify product quality and ingredients.
- Identify contamination sources.
- Confirm the origin of an item.
Instead of purchasing food labeled with official vegan or GMO-free seals, we may soon be seeing official blockchain seals. These seals can be scanned to track the product’s journey through the supply chain.
Vehicle rental processes across the industry highlight terrible user experience (UX). If you’ve ever rented a car, you might have your own horror stories.
Blockchain can improve payment systems across the board. From e-commerce to exchange, blockchain promises digital transformation by securing and authenticating data.
Visa and DocuSign are building a blockchain platform to reduce the car leasing process into a few simple steps. Legal documents are uploaded onto blockchain as a permanent record and are updated as customers sign documents. Integrated blockchain-based payments create a streamlined -and secure- system.
Blockchain is used to streamline:
- Application process
- Determining eligibility
- Processes financial quotes
The need for digital transformation within similar industry processes enables blockchain to tackle similar issues in the legal, financial, and healthcare fields.
Data Security and Control
At present, digital advertising relies heavily on user browsing data. Ads are purchased and distributed based on how a person interacts with the web. Blockchain may soon change this.
The need for better security and personal data management highlights blockchain’s potential to drive a new era of digital transformation.
Users are aware that businesses track and sell their online activity, and as a result, are demanding the right to own their data. The passing of GDPR shows a rising need for data ownership.
The Basic Attention Token (BAT) is a blockchain platform already working to make transparency a standard practice. The token model of privacy-by-design lets advertisers:
- Reach highly targeted users
- Deliver consensus-based ads
- Operate without selling browsing data
This process requires the use of the Brave browser, which blocks malware and tracking pixels. The result is secure, anonymous user data. Say goodbye to ad blockers and hello to consensual ads.
How is Blockchain Evolving?
There are plenty of dApps that prove blockchain’s ability to reshape the way we think about businesses. Blockchain will support digital transformation at an increasing rate as innovators find new ways to improve upon existing products and services.
Business Processes Made Easier
Users have increasingly high expectations when it comes to digital products and services.
Blockchain enables digital transformation by reducing app friction and the cost of services, letting developers focus on UX. Its decentralization means that no one party is in control. Users are not dependent on businesses to process requests. Instead, they can take matters into their own hands.
Removing the middleman and integrating users within business processes will:
- Deliver an intuitive UX that users have come to expect.
- Streamline work on the business side of things.
Take healthcare, for example. Rather than enduring long wait times for medical record transfers, documents can be securely stored on a blockchain network and shared with healthcare professionals. Or, in the case of BAT, users can choose to reveal their data to brands they trust in exchange for better offers.
This example circles back to the demand for highly personalized user experiences.
Peer-to-peer Interactions Reimagined
User communication sees major improvements when blockchain is applied to digital products. Blockchain-powered digital transformation is putting them back in control.
Direct transactions via peer-to-peer exchanges change the way users interact. Cryptocurrency can be bought and sold from exchanges or third-parties off-the-chain.
LocalBitcoins allows users to buy and sell Bitcoin from each other without using a liaison to facilitate transactions. This system benefits users with reduced costs and faster purchasing processes.
The good news is less dependency on third-party services does not put users at higher risk for fraud. Records and users on a blockchain network are securely verified, eliminating doubt on who you’re buying from or what you’re buying.
Shifting Development Mindsets
Blockchain will drive digital transformation because it changes the way we approach problems. Developers can look at projects from completely new angles, thanks to blockchain’s decentralized framework.
With that in mind, developers will need to update their programming skillset to take advantages of all of blockchain’s benefits.
In the coming years, the development landscape can expect a shift towards:
- Object-oriented programming
- API integrations
- Changes in coding patterns
Businesses working with blockchain to drive digital transformation must overcome design and usability challenges. One of the main barriers facing developers is delivering a UX that users will understand and enjoy.
Until blockchain reaches widespread adoption, many users won’t be familiar with the processes and technical terms found within dApps.
Companies looking to implement blockchain strategies should turn to agencies to fill gaps in blockchain development. Developers that have experience programming for blockchain already understand the differences between blockchain networks. Frameworks and libraries
the differences between different blockchain networks — such as when to use frameworks and when to use libraries.
Creating a Digital Transformation Strategy
Research and planning are necessary first steps to a digital transformation strategy. There’s no point to investing time and money into a project without proving it can provide user value. The planning phase will reduce project risk.
Businesses need a complete analysis of their industry before considering how they can implement blockchain to drive change.
Decision-makers should consider the following on both an industry and an application-level:
- Competitor offerings.
- What made past offerings successful.
- User pain points and how to improve them.
- Blockchain fundamentals.
- Where and how the industry implements blockchain.
Identifying gaps in an industry, products, or the competitor ecosystem reveals areas of improvement and potential innovation.
Digital transformation doesn’t happen overnight. Blockchain applications must undergo several rounds of testing until the final product is ready to be shipped. Implementation is as much of a strategic process as it is the creation of a usable product.
Businesses must consider the following elements of a blockchain project:
- Information architecture
- UX Design
- Visual asset creation
- UI Design
Introducing an agency at the point of implementation is a smart move for companies looking to maximize product value.
The success of digital transformation depends on a great UX. Agencies have a wealth of development and design resources to pull from to optimize a blockchain project.
Finding a partner with experience in all areas of product launch strategy ensures a product’s goals are met by integrating perspectives from all angles. If you’re looking to drive digital transformation using blockchain technology, reach out to our team of expert designers and developers.