Becoming digital-first has quickly become a priority as companies all over the world navigate a new and challenging environment as a result of the COVID-19 pandemic. However, new technology solutions should optimise entire industries, not just individual businesses, says enterprise software firm R3.
97% of companies have benefitted from technologies enabling digital interaction during the pandemic1. The pandemic will likey lead to lasting change with 99% of firms now changing their technology strategy and operating model based on this new digital-first environment.2
The global crisis has not only reinforced the limitations of disparate, firm-wide systems, but also highlighted the urgent need to evolve to more transparent and scalable business processes, as well as access to real-time data. 80% of IT budgets currently are allocated to keeping legacy systems running3 and 9 out of 10 businesses report they’ve had their growth curtailed by old technology.4
While crisis conditions often breed caution, the unique nature of the current operating environment has meant firms who cut spending on innovation risk falling behind their competitors. Inefficient information exchanges cost a 10,000-employee business $26.5 million annually.5 Businesses have had to adapt to the ‘new normal’ in order to survive, and are placing more importance than ever on accelerating their digital transformation.
David E. Rutter, CEO of R3, comments: “History is littered with cases of businesses which failed to adapt to new technologies. Some continue to try to play catch-up, but many have lost the fight.
“The problem is often rooted in intra-firm, rather than inter-firm, thinking. Software vendors may be servicing industries that remain largely paper-based, and while their product offerings provide internal efficiencies and revenue gains, they don’t necessarily extend these values across their wider business network. Digital transformation at the industry – not just individual firm – level is the only path forward from this crisis.”
Of all the new technologies at their disposal, 75% of businesses consider blockchain as being key to driving digital transformation, and a fifth already have an enterprise blockchain solution in production.6
Blockchain’s immutable, distributed ledger enables businesses to transact directly, reducing transaction and record-keeping costs and streamlining business operations. On a blockchain, everyone involved in a transaction knows with certainty what happened, when it happened and can confirm other parties are seeing the same data.
Rutter continues: “If current solutions continue to be deployed on-premises, they are likely costing more and more to maintain. They may be getting more and more difficult to renew. And they definitely don’t enable end users to seamlessly transact with one another, because different instances of software do not communicate based on a shared view of the facts, or through a peer-to-peer network. The cost and inefficiencies that this generates are unacceptable in the current business environment.
“By delivering a truly digital-first application underpinned by blockchain, software firms can eliminate the trust and efficiency challenges in data exchange between their customers, and their wider business ecosystem.
“Deploying enterprise blockchain technology allows firms to deliver connected and transparent business networks that can overhaul the entire sector they serve. As digital industry transformation continues to gather pace, we will move from a world where everybody builds and runs their own distinct applications, which are endlessly out of sync, to one where everybody is using shared market-level applications, dramatically driving down deviations and errors.
“And this is all happening right now. Countless industries are already using blockchain and other advanced digital technologies such as AI in everyday business scenarios, optimising processes and systems that in many cases have remained stagnant for generations.”