Blockchain and IOT in Supply Chain Industry

3867 words (15 pages) Essay in Information Technology

08/02/20 Information Technology Reference this

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Project Seminar- Final Exam

1)     Explain how blockchain technologies, big data and internet of things are coming together to enhance innovation and competitive positioning of organizations? Illustrate your answers with examples.

What is Block Chain?

Blockchain is a distributed, decentralized, digital ledger which is used to record and share transactions across many computers or parties securely. In this process the record cannot be altered reiteratively without altering all subsequent blocks. Each record will have a timestamp and is connected to the previous one. The network can be public or private and can be used to store any sort of data.

IOT- Driver

IOT is creating new convenience and providing a competitive advantage for businesses and new markets. Internet of Things(IoT) is an essential driver for customer-facing innovation, data-driven optimization and automation, digital transformation, R&D application, business models and revenue streams across all sectors.

How IoT and big data related?

If there is a requirement of managing huge data, then we can use IoT with bigdata. The IoT is the largest single generator of data from a company. The IoT devices will generate fresh data daily and those devices can number from dozens to hundreds to thousands and this data stream will be an uninterrupted flow of raw readings that can then be complied along certain lines to draw conclusions. Big data is the only one which will provide the insights for the business. In this context the IoT is the partner to big data. Because both works together as Big Data collects the data and the IoT turns the collected data into actionable information.

Examples

Trifecta

One of the example is trifecta of information technology advancements in the early 21st century in big data, IoT and blockchain have been known to everyone as they broke into the mainstream.

Omnilytics

Omnilytics is a startup company which aims to combine the blockchain with big data analytics. Omnilytics uses artificial intelligence and machine learning, with marketing, financial due diligence, auditing, trend forecasting, and in many other industries.

In this company by utilizing blockchain technology the company can disrupt the big data giants. It mainly powers the block chain smart contracts which are using data fingerprinting, data protocols, data exchange and other API’s.

HDAC (Hyundai Digital Asset Currency)

Hyundai is Korean industrial giant which is using IoT blockchain startup HDAC (Hyundai Digital Asset Currency), which is building its own private blockchain designed specifically for IoT.

Filament

Blockchain startup Filament company recently made a new chip which is designed to enable machine made IoT devices to work with multiple blockchain technologies.

The idea behind Filament’s Blocklet chip is the [IoT] sensor data will be coded directly into the blockchain. The main goal of this idea is to provide a secure foundation for decentralized interaction and exchange.

Blockchain and IOT in Supply Chain Industry

Blockchain technology and the Internet-of-Things(IOT) in combination have the potential to solve important problems in traceability and provenance challenges.

Breakthrough blockchain technology enables companies to record each event with in a supply chain on a distributed ledger.

The main purpose of IOT is to link the physical world with the digital world.

In this process the steps include:

  • Collect data from real-world objects
  • Communicate and aggregate the collected data into information
  • Present the results to the users to make decisions.

The usage of analytics on the collected data in combination with intelligent devices gives the systems the possibility for data aggregation and analyzing trends and monitoring the performance.

The main challenges faced by supply chains relates to sharing of information and trust.

The intrinsic properties of Blockchain and IOT will help in creating bright opportunities to address these problems.

The solutions with the block chain are Continuity of Information, Accessibility to Information, Link between Physical and Information flows and Fraud Detection.

With the ability to provide continuity in information sharing, blockchain and IOT capabilities helps in reducing the operational risks for global businesses by ensuring reliable consecutive flows.

Blockchain and IOT will play a major role in the optimization, they need to overcome challenges to become standards on the market in the long term.

The blockchain will keep an immutable record of the history of smart devices in an IoT network. The IOT feature makes to enable the autonomous functioning of smart devices without the requirement for centralized authority. With this the blockchain opens the way to a series of IoT scenarios and without using IOT it will become impossible to implement the same.

Block Chain and IOT in Insurance

IoT data and blockchain in combination lead to intelligent automated insurance policy applications.

The important use case of blockchain in insurance are smart contracts which is an importance feature of block chain and the develop and enhancement of several processes for example claims management. 

The applications include fraud management, legally required applications and even the usage of technologies in an insurance context.

It’s curious to look at the combination of blockchain and the Internet of Things as it’s used in insurance and will be more, and in pure telematics model too.

IoT and blockchain – From manufacturing and security to ERP

The operational technologies and manufacturing technologies are necessarily revolving around data capturing, analyzing, , making interoperable, leveraging in broader ecosystems in which the data exchanges and blockchain certainly also are looked at in an IoT data perspective, increase the making of  autonomous decisions based on the analysis.

IoT and blockchain – Energy industry

Smart Contracts are one of the important feature of the Blockchain. When consider the building management and building energy management the evolutions is towards convergence in which in this area there is a scope to use IOT. One of the areas this occur is leveraging energy which is coming from solar or wind systems and microgrids in the context of energy efficiency and facility optimization.

This diagram represents the benefits of using blockchain for IOT.

2)     Nicholas Carr argues in the 2004 HBR article “IT Doesn’t Matter” that IT was becoming an infrastructure technology, like a utility, and the way to manage commoditized products and utilities is to focus on reducing their costs. Please explain where you agree with the author and where you disagree and think IT is indispensable for innovation and gaining competitive advantage for organizations. Illustrate with examples.

IT Doesn’t Matter a widely discussed article which is by Nicholas Carr.

In this article the author is talking about traditional IT services almost 10 years back time, specifically the ITSM technology which end up in holding big enterprises companies back its little more nuanced than just saying technology is dead.

In the current world which is now dominated by tech giants such as google, and startups disrupting everything from travel to finance, with their advantage almost entirely gained through effective use of modern technology and an ability to go from idea to product as quickly as possible, it’s so interesting to think that intelligent people thought, 15 years ago, that the advantage gained through technology was diminishing.

The article mainly talks about the IT infrastructure. Carr explains to Network World basically about what IT departments were mainly concerned with 10, 11 years ago. But in my view, this has become uninteresting from a strategic point of view.

Personally, I like this article and when thinking about computers for employees there are some other additional factors that we need to consider for this situation.

The factors are mentioned below

According to some recent industry reports, hardware failure goes up 20% year, that is why we need to think about the cost of unplanned down time for employees and unpredictable emergency repairs or replacements for the IT employers.

Keeping a computer updated for security and stability becomes increasingly costly over time as well, and eventually impossible as the vendors will stop providing the update about older products.

In this factor the company culture component or atmosphere will place a role. It’s possible to do great work on 5-year-old PCs, sitting on rusty benches and eating cup noodles, a company probably isn’t going to attract or retain the best and brightest employees by providing that environment. Especially at software companies, high quality furniture in a hip office, new powerful laptops with great peripherals, and of course free snacks/drinks are expected.

Points Which I don’t agree

Carr argued that IT is like other technologies which will lose its competitive potential once everyone able to access it.

But I personally don’t agree with it because IT is different, it has constantly expanding functionality, when I consider Carr’s other technologies for example railroads, steam engines, electricity, telephones have narrow functionality in which I oppose Carr in this context.

Electricity was Carr’s key historical equivalence, But IT is very different compared to electricity when we consider 10 years ago.

Electricity is a commodity, but IT is not. But Moore’s Law proposed by Carr makes IT also a commodity because of relentless reduction in the cost of computing.

Carr tells Network World from his view that may be he will understated the new things that IT departments would have to confront with. But in my view, it’s not required by him to wait ten years to understand that there were new things. For example, Amazon was well advanced in its innovative use of IT by 2003, and VMware was already a rising star by that time.

Points Which I agree

I completely agree with the statistical analysis by the author which is described below.

In the year 1965, according to a study by the U.S. Department of Commerce’s Bureau of Economic Analysis, less than 5% of the capital expenditures went to information technology. With the introduction of the personal computer in the early 1980s, that percentage rose to 15%. By 1990s, it had reached more than 30%, and by the end of the decade it had hit nearly 50%. Even with the recent reduction in technology spending, businesses around the world continue to spend well over $2 trillion a year on IT.

I agree with the author point there should need the distinction to be made between proprietary technologies and infrastructural technologies. Proprietary technologies are the ones which can be owned by a single company. For example, a pharmaceutical firm, may hold a patent on a compound that serves as the basis for a family of drugs. An industrial manufacturer may discover a new way to employ a process technology that competitors find hard to replicate.

Carr was right to complain about over-hyped technology. Vendors, consultants, analysts, and the press still overvalue technology, by the latest buzzword big data will reform our lives. All this hype masks the huge and real benefits of IT where most of the sharp people make it increasingly in good use in all the parts of the world and in more areas of government, and leisure, business innovating as they go along new innovative information technologies.

Examples

Carr writes that some companies are running into the risk of spending more money without evaluating cheaper alternatives and the returns from investments.

One example is FoxMeyer Drugs, a pharmaceutical distribution company which is worth $5 billion, taken a step to spend $35 million dollars on an ERP project. When compared with the old and new system, the

new system was processing only 10000 orders while the old can process 420,000 orders. The company went bankrupt in 3 years due to huge loss.

The other example, a British supermarket giant Sainsbury’s invested almost $150 million to automate their fulfillment system. The new system ran into barcode reading errors. This indicates that even if a great expenditure not always gives the best results.

Another example in this context is General Motors CIO Ralph Szygenda who is Nicholas Carr says IT doesn’t matter but business-process improvement, competitive advantage, optimization and business success will matter, and they are not commodities.

Conclusion

Being cost of doing business(CODB) –whether the price is same or lesser the sensible course of action is not better than the competitors. The smart way of achieving this is through standard services, mainly which are based on utility to avoid customization.

IT matters in the same process that manufacturing, finance and operations matter. It is the method of making the most of the available resources to advance business goals.

The mistake many corporations did was to treat IT as part of their core business. Many others avoided IT like the plague. In my view both extremes were wrong.

IT is mission critical, and it also a part of the cost of doing business. No more, no less.

3) Select any non-IT S&P500 organization (a different organization from the one you may have chosen for question 1 above) that you like. Then, explain how some of innovation concepts and frameworks discussed during the course of the semester (e.g., the Strategic Innovation Thinking framework suggested by Goldberg and Mazursky, among others) could be applied to create process or product innovations in the organization.

4)  Select any current CEO of an S&P500 organization (a different organization from the one you may have chosen for earlier questions) that you like. Then, analyze the managerial/leadership qualities of the business leader in terms of the various frameworks discussed during the course of the semester (e.g., Level 5 leadership, Leaders vs. Managers, How Managers become leaders, etc.) with examples.

Here for this question, I have selected amazon CEO Jeff Bezos for explaining the managerial and leadership qualities.

The concept behind the amazon logo:

Smile from A to Z. Logo signifies that amazon is willing to deliver everything to everyone.

Amazon, is a charitable organization run by elements of the investment association for the benefit of consumers.

Prioritizing Customer Service

Jeff Bezos is well known for his empty chair tradition. During staff meetings, he keeps an empty chair as a reminder of customer.

Bezos is known for his clear and profound thinking about business, how to delight customers, and how to build and sustain an incredibly new enterprise.

The vision of the amazon is to use this platform to build the most customer-centric company, a place where customers can able to find and invent anything and everything they might want to buy online.

This vision still holds true today, Amazon first started with books later amazon web services or Alexa will start with customer and work backwards from there.pf

This customer-centric theme is the success criteria for amazon. As the customers made amazon what it is now, they are the ones with whom we have relationship and they are the ones whom we owe a great obligation. Bezos is even willing to forgo short-term profit over long-term advantage in his commitment to Amazon customers.

Key takeaways From Jeff

  • Have a clearly articulated long-term vision.
  • Communicate it to both internal and external stakeholders frequently.
  • Based on the vision make the product decisions.

When we see the quality in Benzo’s vision it still holds true after two decades. Improve your thinking, simplify your message is one more key factor for the success of Bezos. Self-promotion is a quality which made Benzos to be there in a successful position.

When we take the Level 5 Leadership framework it talks mainly about

  • Highly Capable Individual,
  • Contributing Team Member
  • Competent Manager
  • Effective Leader
  • Great Leader.

According to me the amazon CEO Jeff Bezos used all the 5 leaderships to become most successful in the current world. Level 5 leaders are passionate about what they do, and they are not afraid to show it. These Level 5 leaders have a unique combination of fierce resolve and humility. They were the first ones to own up to the mistakes and the last to take credit for success.

When we observe little deep into the principles followed by Jeff Bezos he followed even the other framework which is Managers become the Leaders. The ownership principle says as the leaders are owners. And Jeff Bezos thinks every time as a manager to implement any decision in the amazon in a way whether it will improve the customer satisfaction.

According to Managers become Leaders framework enterprise leaders must be able to

  • make decisions thinking business that are good.
  • evaluate the team talent.

Our CEO Jeff Bezos followed the same principles for making his own decisions and makes to evaluate the talent on their hiring teams.

High-performing unit and the respective company had strong systems in place for evaluating and developing talent in key functions. 

According to the Managers become Leaders framework the primary responsibility of functional leaders is to recruit, develop, and manage people and their focus is in analytical depth on specific business activities. An organization leader’s job is to manage and integrate the collective knowledge of those functional teams to solve important the enterprise problems.

I can support this framework functionality in which Jeff Bezos have implemented in his principle which are Invent and Simplify and Hire and Develop.

Below are the leadership principles followed by Jeff Bezos.

14 Leadership Principles of amazon

Customer Obsession

In this Leadership principle the leaders start first with the customer and they work backwards according to their requirement and it keeps the customer trust. Even the leaders pay attention to competitors they value customers.

Ownership

The leaders are owners. These leaders think long term and they don’t sacrifice the long-term value for short-term results. They are the ones who act for entire company not for just their team.

So, the Level 5 Leadership framework works better in this context.

Invent and Simplify

Leaders always expect, and they require invention from their teams to find ways to simplify the process.

Are Right, A Lot

Leaders are always right a lot with strong judgment and good instincts.

Learn and Be Curious

Leaders think learning is a continuous process and always seek to improve themselves. They are always curious about new possibilities and always try to explore them.

Hire and Develop the Best

Leaders will always choosy in selecting the right candidates for the organization. They are very particular in identifying the exceptional talent for hiring and recruiting.

Insist on the Highest Standards

Leaders will be having high standards and they are continually raising the bar and drive their team to deliver the high-quality products services and processes.

Think Big

Leaders will always think big and they create and communicate a bold direction that inspires the results. They always think differently and look around corners for ways to serve customers.

Bias for Action

Speed matters in business. Many decisions and actions are reversible whenever we can, and they do not need extensive study.

Frugality

Leaders always follow to accomplish more scenarios with less faculty.

Earn Trust

Leaders will always listen attentively, speak candidly and treat others respectfully. Vocally they are self-critical.

Dive Deep

Leaders operate at all levels of the process and they will connect to every process and audit frequently.

Have Backbone; Disagree and Commit

Leaders do not compromise for the sake of social change. Once they take the decision they will commit for that.

Deliver Results

Always leaders try to deliver the results with the right quality and in a timely manner.

References

  • Harvard Business Review. (2018). IT Doesn’t Matter. [online] Available at: https://hbr.org/2003/05/it-doesnt-matter
  • Harvard Business Review. (2018). How Managers Become Leaders. [online] Available at: https://hbr.org/2012/06/how-managers-become-leaders
  • Metz, T. (2018). 5 Key Takeaways from Jeff Bezos’ Leadership Style • Pagely®. [online] Pagely®. Available at: https://pagely.com/blog/5-lessons-from-jeff-bezos-leadership-style/
  • amazon.jobs. (2018). Amazon’s global career site. [online] Available at: https://www.amazon.jobs/en/principles
  • Mindtools.com. (n.d.). Level 5 Leadership Achieving “Greatness” as a Leader. [online] Available at: https://www.mindtools.com/pages/article/level-5-leadership.htm
  • Www2.deloitte.com. (n.d.). [online] Available at: https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/technology/lu-blockchain-internet-things-supply-chain-traceability.pdf
  • Datafloq.com. (n.d.). How to Secure the Internet of Things (IoT) with Blockchain. [online] Available at: https://datafloq.com/read/securing-internet-of-things-iot-with-blockchain/2228
  • Blockchain at Berkeley. (n.d.). Blockchain in Enterprise: How Companies are Using Blockchain Today. [online] Available at: https://blockchainatberkeley.blog/a-snapshot-of-blockchain-in-enterprise-d140a511e5fd
  • I-scoop.eu. (n.d.). Blockchain and the Internet of Things: the IoT blockchain picture. [online] Available at: https://www.i-scoop.eu/blockchain-distributed-ledger-technology/blockchain-iot/.
  • Jones, S. (n.d.). Why you need to merge big data, IoT and blockchain | Articles | Chief Innovation Officer. [online] Channels.theinnovationenterprise.com. Available at: https://channels.theinnovationenterprise.com/articles/why-you-need-to-merge-big-data-iot-and-blockchain.
  • Medium. (n.d.). IT doesn’t matter — Critique – Mounica Vennamaneni – Medium. [online] Available at: https://medium.com/@mounicav/it-doesn-t-matter-critique-b19687fee320
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