Blockchain Development for Business Cost Reduction And Efficient Workflow

Blockchain Development For Business Cost Reduction

It has been a decade since blockchain technology was introduced to the world as a peer-to-peer cryptocurrency exchange platform; now blockchain has spread across many industries other than just the finance sector. Even now, blockchain development is being seen as the panacea of every organizational problem which might not be true as ERP and DBMS also comes with its advantages which blockchain based system is yet to offer. But yet again, giant conglomerates in pursuit to decrease their limitations and to achieve organizational targets, always thrive on accepting and experimenting with emerging technologies and blockchain technology is at number one right now in these kinds of companies. 

Those experimentations led to innovation in blockchain technology and resulted in Hyperledger and Hedera Hashgraph. These two types of blockchain innovation are particularly for an enterprise solution, but the underlying benefit of blockchain technology remains the same which is to have an immutable and transparent data. By applying this blockchain system, enterprises can benefit itself on following problems they might face or are facing: 

• Payroll Management

For large enterprises or manufacturing companies, one of the most significant cost is labor cost. In some of the organizations, it counts to 70% of the total business cost borne by the company. The labor cost includes employee wages and salaries, benefits, payrolls or other tax-related expenses. And when it comes to managing these aspects, Human resource department hardly pays 15%-20% of their time which result in more overtime payment cost. The high overtime payment cost might be beneficial for employees as they receive double the salary per hour depending on countries’ labor and wage payment laws but it costs companies regarding extra business cost without much improvement on departmental tasks. A company aims to achieve based on stipulated time, and when employees do over-time, it does not reflect much on company performance.This visibility is possible through blockchain based system or blockchain integration. By gaining more visibility on the overtime work cost, the reduction in the burden of human resources executives and decline in business cost can be achieved. This visibility is possible through blockchain based system or blockchain integration. Moreover, the blockchain system will be easily accessible and is effortless to retrieve data which can help in the analysis of it. By accurately measuring which department of the company is contributing to excessive overtime cost, right actions can be taken to reduce the business cost. 

• Reduction in Excessive Collaboration

Excessive collaboration in simple words means many responsibilities to a single employee or a team. As we know, an employee is hired for a particular job profile but sometimes diversity of knowledge possessed by that employee or a group and demand by company results in excessive collaboration or responsibilities. This excessive collaboration results in employee burnout. Now employee burnout is considered the cause by the employee him/herself, but by having a closer look, the company’s unintentional excessive collaboration results in this. Moreover, this excessive collaboration and employee burnout affect the performance of the employee or team and further reflects in the company’s performance. Also, companies overestimate the workload of an employee through digital productivity tools without cross-verifying the actual results and expectations of an employee or team increases over time. 

By redefining the organizational structure and analysis of employees task logs can solve the problem of employee burnout and excessive collaboration. Blockchain system which is transparent and provides immutable data can enable this solution easily. By implementing Hyperledger based blockchain system, all nodes are identifiable. Identification of nodes is necessary as these nodes work as decision makers and excess of decision makers leads to unnecessary organizational complexity, slowing down the time for each action. By identification, these nodes can be reduced, and the decrease in complexity is visible through blockchain development. 

• Reduction in Agency Cost

Agency cost arises out of Agency problem, and an agency problem is a conflict of interest between stakeholders and company management. Company stakeholder aims to gain out of their investments and company management which consists of a board of directors aims at the growth of the company. When this problem arises, agency cost is unavoidable and had to be paid. A hired manager by a stakeholder to act as an agent avoids stakeholders interest of profit and favor’s company management decisions for a company’s interest to grow business. Moreover, manipulation in company decision is often happening due to no transparency leading to bad practices in the industry. 

Smart contracts are offered by blockchain development for the internal transactional purpose. 
By enabling the blockchain based decision-making system, even anonymity of company management and stakeholder’s representative is possible. Even if anonymity is not a priority, transparency of data and immutability helps not only stakeholders but also increases trust in the company. Moreover, the consensus process provides better decision making at each level. 

• Reduction in Internal Supply Management Cost

A multinational company consists more products and services compared to a business. This type of enterprises does many internal transactions to support other departments or subsidiary companies. The requirement of third-party while executing various tasks such as trade confirmations, reconciliation, cash management, asset optimization, and others cost as operational management cost in books of company accounts. The legal cost cannot be avoided at this point, but other supply chain cost can be reduced with the blockchain development. Moreover, a layer of private channels also known as smart contracts is offered by blockchain development for the internal transactional purpose. 

Blockchain technology is yet to evolve more to be a perfect fit for large organizations, but the large organizations are ahead on the road to motivate blockchain projects which can benefit the entire industries. Above mentioned reasonings to reduce business cost and achieve high efficiency in the workplace can also be obtained through other solutions such as internal automation, staff reduction, and outsourcing but the integration of these resources again cost the business. 

We hope you have found this article informative and interesting. For more information or queries visit at icodevelopment.io and know more about this technology. You can also contact us or send us an email at sales@icodevelopment.io  

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