Effects of Block-Chain Technology
Abstract
This study seeks to discuss the emergence of blockchain technology and how it has affected the operations in the world of business. This research paper also discusses the pattern shift in business practices. The technology helps address the problem of cyber threats. It also elaborates on the involvement of HR in high-volume financial transactions, a massive volume of sensitive information, and the importance of this technology in these sectors. This study also highlights the growth in the demand for this technology in the HR department in organizations. This paper also discusses the relation of bitcoin and other cryptocurrencies to the block-chain technology. The transformation of HR and recruitment is imminent due to the implications of this technology to the finance industry.
Introduction
Blockchain technology began to emerge around 2016 and 2017 as a viable option in the real world of technology. This technology seeks to become a more efficient and lower-cost method of sharing data and information between different business networks. Blockchain happens to be a distributed ledger technology that allows storage of data across the globe on the many servers available at the same time, allowing other people to see someone else entries almost in real-time. However, blockchain technology has had incidents whereby the blockchains have been hacked. This was done by the use of cryptocurrency applications such as bitcoin. In business, nevertheless, this technology holds the promise of transparency in transactions. This can be achieved by its ability in the creation of a secure and real-time communication network with partners around the world in support of things from the supply chain, healthcare sharing of data to payment networks. This study seeks to discuss the emergence of blockchain technology and its impact on business operations across the globe.
The blockchain technology architecture can be described as an incorruptible online ledger. This technology has had the effects of transcending some operational services, business transactions, and also the technological practices of companies all across the world. This innovation has a combination of some computer technologies that include; encryption algorithms, consensus mechanisms, distributed data storage, and point-to-point transmission. This technology has, therefore, been viewed as an innovation that is disruptive. This is due to its significant ability as an application to authenticate all transactions in a chronological way that includes the facilitation of booking and reservation activities, products and services transactions, supply chain management, clearing of payment, among other activities.
There has been a new batch of innovation from the blockchain technology that has received attention in the industry. This innovation that includes the use of cryptocurrency, ripple, and ethereum has brought about a change in the existing operating models. All transactions between participants are tracked as a global ledger through replication and decentralization of the database, and therefore it also allows the tracking of assets by the owners. However, this technology is used beyond the cryptocurrencies, and it has become a source of innovations in several different businesses, contracts and transactions, trade, and also internal and external management practices. This technology has also provided a way of protecting assets and setting organizational boundaries among parties involved in various business engagements. It can be simply put that this technology has provided an avenue to protect and govern interactions among all the stakeholders involved.
In blockchain technology, the transactions are coded into blocks that are connected to each other by the network of computers in the entire communication system in the form of chains. The blockchain technology secures all the transactions by the use of cryptography. It also terminates all the fees involved, whereby the technology reconciles different databases since it produces a single ledger. Many business sectors, such as hospitality and tourism, use this technology in their facilitation for cheaper, faster, and better experiences and also the availability of instant information about transactions. The companies in this sector are also using this technology in the management of the inventories distribution and handling of internal processes such as reward platforms and loyalty in the improvement of the end to the end-user experience.
We can use the hospitality and tourism industry as our case study to demonstrate how the blockchain technology has affected business operations. There has been the untapped potential in the use of blockchain technology in this sector. Its application to business operations has increased significantly since the first use of data mining algorithms. The technology and its application have, in recent times, become a prototype concept that has really received major attention from the financial tech companies and also academic research. Since the technology uses a combination of technologies such as point-to-point transmission, among others stated earlier, it has been identified as an innovation that is disruptive in the internet era.
Cryptocurrencies and payment
In the hospitality and tourism industry, some of the applications of this technology emerge in the form of transaction and payment, which are facilitated by the use of cryptocurrencies such as bitcoins. This has the potential in the attraction of travelers in the new generation, which has been taking up the use of this virtual mode of payment. However, this sector has been slow in the adoption of the use of cryptocurrencies. This has mainly been affected because of the underlying risks that are associated with their volatility. As more and more businesses explore the use of bitcoins and their potential to lure potential customers, the societal acceptance of this technology can highly benefit a team of players in the hospitality and tourism industry. The technology allows easy money interchange without the need for third parties. The mainstream adoption of this technology will enable the emergence of some new forms of the customer to customer transactions in the major and minor tourism products market.
Service customization and tracking
There are important business functions in the hospitality and tourism industry that include customer management and guest experience. These are some of the core business functions of the hospitality and tourism companies. This technology can potentially provide customization and tracking functions of guests. This is because of the unique features that offer seamless integration of guest services and also management without intrusion into the privacy of the guest. The level of disclosure of private information with networks and these companies can be freely determined by the customers since the blockchain technology use digital IDs.
This is a reality in the sense that personal data of the customers cannot be transferred to third parties while they are making online bookings. This means that there are no fears of privacy invasion from the customers since digital communication cannot be interrupted. This is the complete opposite of current digital communication. The blockchain technology, therefore, has the potential to provide information that is accurate and one that is customized and personalized in terms of tracking capacities.
Disintermediation of hospitality and tourism operations
There has been a major issue since early 2000 when travel agencies gained popularity among customers. This issue is the disruption of the blockchain technology is shifting in the shifting of the balance of power away from the main travel suppliers such as hotels and airlines. These suppliers have lost major control over business operations that are critical that include inventory management, access to customer information, and also pricing. This disintermediation has proved to be one of the biggest attractors for the investment in bitcoin technology by the hospitality and tourism companies.
Effects of blockchain technology in human resource
There has been a growing demand in HR for the blockchain, and it has the potential to affect it in various ways. This technology is associated with cryptocurrencies, as indicated earlier, and it has the potential to revolutionize how the recruitment function in HR operates in a business. (Wang, Feng, Zhang Lyu Wang & You(2017, April).)There has been the implementation of the distributed and decentralized database by many companies all across the globe. This technology can also be extended to other sectors that include fashion, logistics, and health care. The HR and recruitment process is set to become more streamlined by this technology, and companies such as Hays and NRG are in the primary steps of adopting the blockchain tech. This technology will affect and impact the HR function, as discussed in the points below.
The effects of blockchain technology are likely to be prevalent since disruption from this technology is mainly associated with areas such as capital markets and payments. The functions of HR should consider the benefits that are associated with this technology rather than focusing on its intricacies. (Hasan, Shiming, Islam & Hossain (2020).) There are several processes that are labour-intensive, slow, expensive, and cumbersome that are most appropriate for the technological transformation of the blockchain. This technology can be used to assess the skills, education, and the performance of recruits in order to assign each recruit to a task that is most appropriate.
Addressing of HR pain-point
In the HR department in the business, there is a business process that the department goes through that is painful. These processes also involve shared data, a lot of people, time, and risk. There are four that are significantly impacted by this technology in HR. These areas include management and talent sourcing, cybersecurity, productivity gains, and cross-border payments. These areas and how they have been affected have been discussed below.
Cross-border payments
The first steps into this technology for the business operating at the multinational level can include the creation of own block-chain based corporate coins which can be used in the transfer of value across their different businesses around the globe which could enable transaction with their supply chains. In the long run, there is the possibility of central banks being involved in this technology by introducing their own block-chain based means of exchange in support of convertibility into the ‘official’ currencies.
Cyber-security
HR is often involved in high-volume financial transactions and is also responsible for a variety of sensitive information and personal data. In order to squeeze out fraud, this technology uses consensus to establish facts. Due to the lack of transparency in systems and data, cyber threats emerge considerably. Cyber-threats can be a challenge that is addressed by the use of technology. This can be of great importance to big corporate organizations and also SMEs, which are often underprepared for the occurrence of these threats.
Functions of HR to be impacted by blockchain
Recruitment
In the HR department recruitment has been taking up a lot of resources and time. This has made many organizations turn to third-party agencies and recruiters to cover up on time. This method of resulting in third parties, however, can be costly and counter-productive. (Hasan, Shiming, Islam & Hossain (2020).) It will be easy for people with direct involvement to have a view of candidate information such as experience, work experience, and certificates on the blockchain. The blockchain technology seeks to eliminate most of the third parties and back-office elements of recruitment.
Verification
The HR can focus on more strategic goals in business by freeing up time that is related to activities such as; verification of individuals’ identity, work experience, and also the background information of an individual. This has been made a reality by the current use of technology to verify digital identities because the data store comes from sources that can be trusted, such as authorized institutes.
Referencing
Referencing is set to change soon as it has been changing previously. This change will be brought about by the HR having access to a record of employment of a candidate that is accurate often impossible to falsify. This process is also set to be more transparent and also address the issue of fraudulent credentials. This can have the effects of increasing the chances of hiring a talent that is best suited to the job description in an organization. Once a student graduates with a degree, he/she will only be required to put up their certificate in the blockchain, and this document does not need to be verified again.
Attendance
The blockchain technology can be used to store biometric data such as iris scan or fingerprint for legal ID and also record keeping. HR in an organization can adopt this technique of storage of unique data of the employee in the tracking of attendance and expenses for wages. There would be no dispute with the accuracy of records due to the visibility of real-time data to the HR. Since the accuracy of data can be undisputed, it can strengthen the trust element in the authorization of payments and check on the claims made.
Auditing and compliance
More than 40 percent of companies have implemented the use of blockchain for auditing and compliance purposes. (Kwilinski (2019).)Audit checks for compliance can be easy to conduct and visible to the authorized parties, which can be made possible by the accuracy of data that is stored within a blockchain. The Blockchain in HR is closely monitored on how it will evolve, and it’s potential to improve the operations in a business.
Conclusion
It can be concluded that the blockchain technology has brought about a revolution in the business sector. There has been little uptake of this technology by many organizations because of the volatility that is associated with the crypto-currencies. However, it has been predicted by experts that in the near future, this technology will take the industry by storm. It has been discussed that this technology has provided solutions to tasks that are expensive and labor-intensive. It can also be concluded that this technology has brought a pattern shift in business practices. It has enabled the business and especially the HR department to verify documents online from reliable sources. This, in turn, helps the HR to place the trainees to their most suitable working portfolios as well as reducing forgery.
References
Kwilinski, A. (2019). Implementation of blockchain technology in the accounting sphere. Academy of Accounting and Financial Studies Journal, 23, 1-6.
Wang, X., Feng, L., Zhang, H., Lyu, C., Wang, L., & You, Y. (2017, April). Human resource information management model based on blockchain technology. In 2017 IEEE symposium on service-oriented system engineering (SOSE) (pp. 168-173). IEEE.
Hasan, M. R., Shiming, D., Islam, M. A., & Hossain, M. Z. (2020). Operational efficiency effects of blockchain technology implementation in firms. Review of International Business and Strategy.
Hasan, M. R., Shiming, D., Islam, M. A., & Hossain, M. Z. (2020). Operational efficiency effects of blockchain technology implementation in firms. Review of International Business and Strategy.