Assignment Task :

Task:

1. Introduction

With an upsurge of the ramification and agitation of the business environment throughout the globe due to constant changes happening in technology, many orgnanisations are finding it tough to maintain their stability on the competitive market as well as innovating their business processes in order to create a competitive advantage. The purpose of this report is to demonstrate how Blockchain technology is reinventing business process management by using smart contracts and as a result of that, how companies want to digitize their business process model in Industry 4.0. Despite that business process modelling brings a lot of benefits to businesses but there are many challenges and pitfalls that are associated. According to Mendling (2018), business process management is related with the arrangement, execution, auditing and enhancement of business processes. With the integration of business process management by using the latest technologies, there is a massive improvement in the workflow processes of businesses in terms of risk identification, smooth operation management and overall increase business performance. As many businesses deal with many external stakeholders, they should be transparent in their processes if they want to build trust and maintain a long-term business relationship. Undoubtedly, with the arrival of blockchain technology, it facilitates the interaction of business processes across organisations without needing a central authority. Basically, a business process model that contains many details, responsibilities and tasks which are executed by various parties can now be easily coordinated by implementing a smart contract running on blockchain technology. This technology enables several organisations to interact, communicate and exchange data with directly to counterparties while maintaining the business integrity throughout the whole process. This paper will introduce the topic of the report and then analyse the different pitfalls of business process modelling as well as the technological innovations that is reinforcing the business process management. Due to the close attention that blockchain technology is getting from several organisations, this paper will also look at its execution using smart contracts by going through a case study of how real estate businesses use smart contracts to improve their business processes. Then there are also challenges in the business process management area that the paper is going to identify following by concluding the paper.

2. Business Process Modelling Pitfalls

Due to the growth in the global economy, many businesses feel the pressure to grow as well in order to be sustainable in the long run. For an organisation to achieve success, the business should operate collaboratively with both internal and key external stakeholders. To achieve the business goal, proper documentations and processes should be in place. Failure to meet the proper processes, sooner or later the business will collapse. So, the combination of proper business processes is vital which will contribute to the success of the company. Roseman (2006) in his study argued that any organisation should have all business issues connected either directly or indirectly otherwise it is a waste of time and this is related to business modelling as well principally when the process management have not yet reached a maturity stage. The business should make sure that the overall process management modelling is linked to the corporate strategy for continuous success. Whereas, Weber et al. (2016) mentioned that due to the lack of trust can lead to multiple problems because once the process modelling agreement is finalized, question such as the control of the process will be under whose control. Additionally, Alotaibi (2016) pointed out that one of the considerable issues for most organisation is the positioning of IT needs and business. The author quoted that during the implementation stage itself, the process modelling fails because of the misalignment of Information systems and the business strategy. Inappropriate business process modelling planning create a big gap in between the Information systems and the organisation’s strategic objectives. Weber et al. (2016) demonstrated a scenario in their paper how there are issues in executing combined business processes when a buyer orders its good with a manufacturer and how the goods will be delivered by going through the middleman, supplier and the carrier. When there is no transparency in between all of them and the goods get delayed or there are errors, someone may be blamed even though it is not their fault.

Research from Roseman (2006) which focuses on potential pitfalls of process modelling mentioned that there should be the right persons for the success of the business modelling process. He proposed in his research that three categories of people are critical for the modelling process. Firstly, if within the representative there are people without the current insight of process modelling, there will be no innovation. Secondly, without people that does not provide any objectives, the project will tend to fail and thirdly, without creative people, the project might be delayed and be underdeveloped. According to Alotaibi (2016), due to the rapid change in business process modelling because of digitalization, it becomes very difficult to manage. As, remodeling the business process of an organisation comprises people with a specific backgrounds, it is hard to find one person that understand the whole system process, so, due to many people working together, collaboration and communication may be an issue due to different skills, culture and experiences.

3. Technological Innovations to reinforce Business Process Management

With the support of latest computer technologies, businesses can use these technologies to produce business processes and align it to their business strategies. As a result of that, organisational system has drastically improved where communication and data sharing became more effective. Due to this innovation, many business structures changed and started to operate innovatively where goods and services are produced in a timely and effective way. With the rapid changes in technology occurring, many sectors are being impacted and they are forced to reengineer their business process and modelling. This proves that innovation is crucial for any business to be sustainable in this competitive business environment. Scuotto et al. (2019) claimed that in the fashion industry, social media networks helped in developing new innovative business processes with the help of big data analytics. They also mentioned that fashion companies in the past were solely relying on internal resources but due to the transformation of macro-trends, forced fashion brands to rethink their business process management approach and started to collect information about consumer’s preference to manage better customer relationships. For a company to deliver on its brand promise, they should not only focus on their operation but on their processes as well. Sometimes, the quality of a product or service may not be the issue, the issue may lie on the quality of their processes. Furthermore, Stjepic, Ivancic & Vugec (2020) argued that business processes are a method related to adding value to a business and it is vital for an organisation to monitor and control their processes effectively with the proper tools and techniques. They further added that business processes are the very foundation, so their management should be of high priority.

4. Executing Blockchain in Business Process Management

 4.1 Blockchain Technology

As technology keeps on evolving, one of the rapid changing automation that is disrupting the share economy in the world, is the blockchain technology where it is receiving extensive recognition among both researchers and government organisations (Karamitsos, Papadaki & Al Barghuthi 2018). Weber et al. (2016), they pointed out that blockchain technology assist Bitcoin and as well as (Karamitsos, Papadaki & Al Barghuthi 2018) mentioned that in 2008, Nakamoto demonstrated how blockchain technology can turn into the core unit to aid digital currency activities of Bitcoin. By upgrading smart contracts and the verifiability of distributed ledger technologies, blockchain can ease the business process model by incorporating guidelines and regulations for numerous parties. Researchers consider that blockchain technology in various vertical industries could guide to three blockchain generations known as firstly, Blockchain 1.0 where digital cash is used to decentralise payment methods. Secondly, Blockchain 2.0 is used to decentralise finance in terms of assets, smart contracts and properties. Thirdly, Blockchain 3.0 is used to decentralise the digital community that are related for example to government and health entities applications. In the research paper of One of the essential aspects mentioned by Weber et al. (2016) about blockchain technology is that it does not depend on any significant reliable authority like banks to proceed with payment systems. Due to the arranged list of blocks of the blockchain data design, each block is detectable and related to the preceding block in the group. (Karamitsos, Papadaki & Al Barghuthi 2018) mentioned that the front block is known as the genesis block and any intention in the falsification of a block, is required to falsify the previous block as well. As a result of that, the system is secure and does not permit any changes in the transaction which lead to trust among parties.

4.2 Blockchain as a facilitator

With the introduction of Internet of Things, Industry 4.0 and Blockchain Technology, they redefined how business processes are being governed in this era (Viriyasitavat & Bi 2019). They further claimed that due to this revolution, industries need a lot more to protect their privacy and need a high degree of trust. As changes are inevitable, Industry 4.0 will drastically remodel the traditional business processes that were manually performed, will now be operated digitally with automated system supported by blockchain technology. Presently, there are two major pain points that business process management is facing which are efficiency and trust. To meet these needs of Industry 4.0, Blockchain technology comes into action to deliver and encourage security and trust without using the traditional brokers or middle representatives to facilitate the business processes across multiple cross organisations.  This is where blockchain technology provides transparency meaning information can be gathered and process it through the automatic system and using human understanding to further proceed with a decision. In other words, blockchain technology will fix the two pain points mention above by assisting as a communication platform for the business process management software. With the introduction of blockchain technology, business process management will operate effectively and help companies to cut cost. 

Moreover, Weber et al. (2016) claimed in their study that to implement Blockchain Technology into business process management, there are two principal approaches. During the implementation of blockchain as an active mediator, it has an extra active aspect all along the business process. Depending on an organisation’s business model, the active mediator will send and receive information automatically and it will convert the data and perform the process. In addition, this technology acts as a trigger while the process is running and can contact external application programming interfaces when the need arises.

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