Here’s How Smart Contracts Could Impact Businesses
Technology is undoubtedly revolutionizing how businesses operate. At the wake of cryptocurrencies and cloud computing, businesses strive to gain a leading position by adopting the most promising technologies before their competitors. During a time when the globalization process is presenting businesses with opportunities to grow their businesses beyond geographical borders, smart technologies are aiding businesses by saving time, easing the supply chain management and facilitating automatic fulfillment. As more businesses continue adopting smart contracts, they will benefit from smart contracts both directly and indirectly on a day-to-day basis. Soon, every business deal that requires a contract may rely on smart contracts rules by the Blockchain Technology. Using a few lines of code, businesses will be able to handle different activities including purchase order financing and accounts receivable financing. The codes run on a global and decentralized computer meaning that businesses will be able to use smart contracts regardless of geographical boundaries.
Companies already adopting the Blockchain technology
Understanding the value of Blockchain is key to understanding the benefits of smart contracts. Business transactions have become more transparent by enabling each user see the processes from every transaction. Through platforms such as Etherparty, a portal to Blockchain, businesses are able to experience the benefits of smart contracts in their daily operations. This can be understood by referring to how Gmail helps people send e-mails through the internet. Therefore, smart contracts aim at helping businesses adopt technology easily on their everyday operations. An example is Wal-Mart that has partnered with IBM in implementing Blockchain in order to reduce the high cases of food contamination. Others include Nestle and Unilever that have adopted Blockchain in order to enhance efficiency in their operations. Justifying the reliability of Blockchain, IBM Blockchain Vice President Brigid McDonald made it clear that the system is safe to use across the companies since it monitors any changes while allowing the companies to share information.
According to Sergey Nazarov, the CEO of SmartContract.com, some businesses benefit more from smart contracts than others. While these contracts may aim at helping businesses increase reliability and efficiency while reducing costs, not all businesses can benefit from jumping on the Blockchain bandwagon. However, a 2017 research by Accenture shows that other industries such as banks could be able to save 12 billion dollars annually if they chose to adopt smart contracts in their day to day operations. Research further estimates that more than 25% of global organizations will be using smart contracts in 2022. Evidently, Microsoft is also offering Blockchain solutions to willing enterprise clients. By working hand in hand with platforms such as dApp Builder, businesses are able to easily create smart contracts without experiencing technical or legal problems along the way.
Automatic fulfillment through smart contracts
Throughout history, society has survived and thrived through both verbal and written contracts. Contracts form a basis for reference in future. Initially, businesses had to keep manual proof of transactions in order to compare against the terms of the contract. This would mean a lot of time consumed in the verification process. Adopting smart contracts will enable businesses to reduce the time spent on verifying transactions against contracts. Businesses and firms would also find it easier to do businesses since they would only need to trust the smart contract and not necessarily each other. Smart contracts, through an automatic fulfillment concept, will be able to transform the relationships between employees and their employers. Smart contracts would enable employers offer contracts of employment written in programming languages like Solidity. The contracts would then be executed on a distributed platform. Furthermore, this would ease the process of payments since the smart contract would make automatic weekly payments possible as long as employees complete the terms of their contracts.
In the past, businesses have had to deal with many intermediaries negotiating between operations. Often, this means higher legal fees in any contract negotiations. Therefore, computer based contracts will help reduce the legal fees thus affording the businesses more time to grow. Furthermore, the use of crypto currencies means it will be easier for businesses to transact over regional barriers. However, the high demand for Blockchain technologies means challenges in terms of tech developers. The problem is most evident in non-tech ventures that have to wait in line for Blockchain developers to offer their technical expertise. In order to eliminate this challenge, select ventures have been making technical aspects of the technology easy to manage as a way of encouraging Blockchain adoption. Smart contracts also make it possible for businesses to transact easily and safely while ensuring that there are lower barriers and more business. Through the necessary technical support, enterprises are able to take advantage of Blockchain technologies to improve and expand their organizations.
