BT

Facilitating the Spread of Knowledge and Innovation in Professional Software Development

Write for InfoQ

Topics

Choose your language

InfoQ Homepage News How Blockchain is Reinventing Business Process Management

How Blockchain is Reinventing Business Process Management

Leia em Português

This item in japanese

Bookmarks

In a recent Hyperledger blog post, Jesse Chenard, CEO of MonetaGo, discusses how blockchain is poised to reinvent traditional Business Process Management platforms (BPM). A challenge with existing BPM platforms is that data is usually stored in organizational silos and challenges exist in counterparty transaction exchanges. A blockchain solution can provide auditing across boundaries, without leaking sensitive information to additional parties.

According to a Reuters article, it claims that the BPM market will be worth approximately $18 billion USD by 2022. Traditional BPM software provides workflow management solutions and have been around for decades. However, one of the constraints of this traditional approach is the data that is captured within these solutions becomes trapped within an organization’s boundary, Chenard describes how this can be avoided:

Traditional BPM services tend to handle internal workflows within a single organization only. They do not manage the workflow process and information across organizations. If they do, they fall into the same trap that blockchain is helping to move away from, which is having a centralized repository of information controlled by a third party (in this case, the business process or workflow provider). If a third party holds data and is responsible for passing it from one organization to another, there is a risk of resiliency problems that come with that central or single point of failure.

However, introducing blockchain for the creation of peer-to-peer BPM systems has some advantages. Chenard explains:

Peer-to-peer BPM systems that eliminate the central repository of information and allows multiple corporations to exchange information directly with counterparties while guaranteeing the integrity of the process. The system allows for organizations to verify and enforce that specific steps are being taken and performed correctly by any party on the network.

An industry that can benefit from this type of blockchain architecture is financial services. The Reserve Bank of India recently licensed three entities to provide a lending solution, built on Hyperledger Fabric, that targets fraud reduction. RXIL, A.TReDS and M1xchange teamed up to build a receivables financing solution. Receivables financing is one of the fastest growing and efficient lending tools for small business to address their working capital needs. Within India, the financing market provides $219 billion USD to micro, small and medium businesses. Yet, there is more than $188 billion USD in unmet needs. Together, this group built a competitive marketplace to address this demand.

A challenge that this group sought to address was preventing organizations from seeking redundant funding by submitting applications for credit to multiple providers. Chenard shares how they were able to prevent duplicate funding:

By implementing a common blockchain platform, these exchanges were able to eliminate instances of double financing without sharing specific elements of any invoice or client. Ultimately, this implementation leads to the exchanges being able to offer better rates across the board to all of their customers and provide access to capital for more businesses otherwise deemed too risky.

Another aspect that needed to be addressed was the three organizations involved in building this platform are all competitors. As a result, maintaining privacy was really important. Chenard explains:

Clients are particularly sensitive about their sourcing inputs, and it is imperative that the exchanges not provide any of their client information to a shared registry controlled by any one entity. By creating a blockchain network built on Hyperledger Fabric, together with some intelligent cryptography, that concern is eliminated as the technology enables the exchanges to work together on a shared network to achieve shared goals without compromising privacy.

One of the benefits of using BPM, in a blockchain architecture, is participants and counterparties are still able to maintain control of their data without leaking customer data. This allows organizations to enforce network rules while still maintaining control.

While the project in India demonstrates that blockchain can be used in BPM architectures, there are still some challenges from a tooling and feature perspective. Chenard adds:

While saying blockchain technology as a communication layer for Business Process Management is a promising use case, it is by no means an out of the box solution – a lot depends on the actual workflow, the use case, and the local laws and regulations.

The BPM industry is very mature and approchable for developers and users, whereas blockchain continues to be an emerging technology. But, as demonstrated in the use case in India, blockchain can play an important role in business process management that spans multiple counterparties. 

Rate this Article

Adoption
Style

BT