As businesses globally strive to save costs by implementing digitization and increasing proficiency at every turn, there’s no room for merely “going along.” From optimizing data storage or eliminating excesses to dropping unnecessary tasks that consume time and money, only those companies that innovate and transform will keep up.
A recent Bloomberg Survey gave a median probability of 47.5% of a recession happening over the next 12 months, up from 30% in June 2022. As we near a recession and businesses look for ways to cut costs and improve efficiency, Web3 and blockchain technology presents attractive opportunities for internal optimization.
Blockchain is mooted as the best replacement for expensive logistics and supply chain systems. The motivation lies in blockchain’s potential to lower IT costs, speed up administrative processes, guarantee transaction security, and improve efficiency.
As companies become more agile and flexible to survive, continuous innovation in a highly competitive supply chain is the only way businesses can cut costs, remain dynamic and succeed. Organizations can implement the following internal optimization strategies in their bid to replace outdated systems with more efficient and cost-effective blockchain technologies:
Complex datasets are a pain point that creates massive bottlenecks causing delays. Manufacturers can sidestep this challenge by implementing smart contracts, special codes locked within a block on the blockchain designed to automate actions as soon as preset conditions are met.
Companies can create smart contracts that automatically streamline and implement shipping notifications, purchase orders, payments, and inventories from multi party agreements. Payments can also be made and monitored by both parties via blockchain. Besides speeding up the process, manufacturers and suppliers can watch the entire process and not feel disadvantaged.
Organizations can use blockchain to digitize their physical assets and build a decentralized, immutable record for all their transactions. The result will be a transparent system that provides visibility open to the business and the consumer as they can track a company’s assets from production to use by the consumer.
The increased transparency can help reduce fraud, especially involving perishable or high-value goods such as pharmaceuticals and precious metals. Increased confidence in the end product by end-market users can help reduce or eliminate doubts associated with counterfeiting.
Organizations can use blockchain to streamline their administrative processes, communication, and collaboration between involved parties relying on its shared network infrastructure. A restructured process can eliminate wastage and accounts payable headaches caused by duplicate orders, rogue spending, and invoice fraud.
Blockchain can give all parties in a transaction access to all relevant information in real time, thereby eliminating data transfer or communication errors. Parties will spend less time validating data and more time delivering goods and services, potentially improving their quality and reducing costs.
The shared ledger’s transparency can help encourage complete and accurate contract compliance and reduce risk and uncertainty by reducing processing time. By removing all manual compliance checks or credit processing, generally taking weeks, the distributed ledger can help reduce costs by creating an environment that enables effective monitoring and audit of supply chain data by all parties.
By applying the features of Web3 as a means of digitizing employee assets via tokenization, organizations can create social tokens representing an employee’s valuable information on a blockchain which can be used as a form of access, exchange, or investment. Companies can use social tokens to unify or gamify every step of an employee’s career journey, starting from onboarding and leveraging them for recognition, reward, and compensation.
Newly hired employees could start with a set number of pre-loaded social tokens in their Web3 wallets. Using an individualized development plan, they could earn additional social tokens that they could unlock after making some achievements. From attending learn-to-earn sessions to attaining new skills and perspectives, such a blockchain-based system would track the employee’s growth and development and be converted to NFTs of “own moments” in the organization. This would allow employees to create an evidence-based digital skills profile that they can track and access and hopefully lead to better employee retention and engagement.
Most brands run centralized loyalty programs, which are not only limited but also discourage customer engagement. Restricting customers to how and where to redeem points diminish the loyalty program’s overall value for a brand’s loyal customers. Organizations can utilize the growing blockchain adoption to change the loyalty program narrative.
Companies offering more than one loyalty program often need help managing them to benefit both the organization and the customer, leading to frustration, wasted rewards, and missed opportunities for the lack of a streamlined process. Moreover, implementing loyalty programs through third parties becomes expensive as there are costs associated with marketing, tracking points, monitoring redemption, and calculating their impact on sales, all of which add up to the end product’s price.
The alternative is a decentralized blockchain-based program where all the details are accessible to all parties, eliminating most third-party costs associated with fraud detection, transaction management, and systematic errors. Companies can consult with blockchain development companies like Gigster on creating loyalty programs that give more value to customers and encourage them to become repeat customers.
While it’s still a work in progress and gaining momentum by the day, companies that want to survive the impending recession should get off the fence and deliberately begin experimenting with blockchain.
Bear markets are the ideal time to focus inward and improve on internal processes and infrastructure. That way, you can benefit from increased transparency, reliability, integrity, and efficiency from digital documentation courtesy of blockchain and Web3.