The term “programmable economy” was first coined in 2014 by the research firm Gartner Inc. to describe the radical changes occurring in the global economy due to technological innovations. In 2018, the programmable economy will be powered by disruptive technologies including blockchains, distributed ledgers, and smart contracts.
These technologies will significantly change the way organizations do business with vendors, partners, and customers. And they will impact the way companies approach, execute and enforce business contracts.
Blockchain and Distributed Ledger Technology
Although most organizations associate blockchain technology with the financial services industry, it has potential use within the manufacturing, government, healthcare, and education sectors as well. This includes how those industries execute and enforce contracts. Blockchains that utilize distributed ledger technology allow for contracts that are self-verifying, self-executing, and autonomous. Companies can exchange terms, events, and information throughout the lifecycle of a contract without relying on brokers or middlemen.
For example, contracting parties can automate payments due over the lifecycle of a contract. The nature of blockchains and distributed ledgers means that as these contract milestones are reached and payments are made, they are recorded in such a way that neither party can repudiate or manipulate the record.
Blockchains are also useful for managing supply chains to ensure standards are met. As materials flow up the supply chain, each tier can upload their compliance information on to a blockchain. The immutable nature of blockchain means that this compliance information cannot be altered, and can serve as a system of record.
Simultaneously, the technology can also keep information secure: a consortium can be structured to only flow necessary information up to a buyer, giving suppliers assurance that they aren’t divulging sensitive commercial information while showing that they are in compliance.
Truly autonomous, smart contracts eliminate the need for human management and significantly reduce risk. Advancements in technology mean that contracts can be coded to communicate with each other, exchange vital information, reflect what influences them, and stay updated with the most current information.
Through the use of smart contracts, business will become faster and more flexible in 2018 and beyond by:
- Offering the ability to learn from past contracts.
- Providing an understanding of the risk-taking capacity of the organization.
- Creating adaptable contracts that change with underlying assets.
How ICM Benefits Forward-Thinking Organizations
The Icertis Contract Management (ICM) platform equips enterprises with the intelligence, speed, and agility to not only manage the complexities they will face in 2018, but take advantage of them.
ICM allows businesses to create contracts governed by business and compliance rules that can smartly and dynamically decide the clauses, metadata and templates to be used to generate a contract. It also offers an easy, intuitive user interface that encourages adoption by any front-line user. And ICM will enable enterprises to create and operate consortium blockchains to manage their smart contracts.
With smart contracts as a key enabler, companies can transform their commercial foundation to ensure compliance, reduce risk, enhance user productivity, and improve their bottom line.
In addition, advancements in blockchain and distributed ledger will only increase the benefits of having an enterprise-wide contract management platform.
Interested in learning more about how Icertis is leveraging emerging technologies in 2018? Download this special Gartner report on the latest in blockchains and smart contracts.