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Alibaba In Blockchain Integrating Blockchain Based Remittances Into Cloud Services Case Solution
A unique application of the blockchain technology can be applied to the field of social work and companies like Alibaba can use this to their advantage. Social work has become part of a lot of companies’ agenda nowadays as consumers prefer a socially responsible organization. Alibaba can utilize the blockchain technology for social causes and cement its image as a socially responsible company. As blockchain enables traceability and introduces greater transparency, it can be used to fight human trafficking, help refugees, prevent slavery and child labour to name just a few (Al-Saqaf & Seidler, 2017).
Following questions are answered in this case study solution
Based on this case (and some external research if you’d like), please explain in a lay language ‘what the blockchain is’ and ‘how a logistics company can benefit from applying blockchain technology’.
Please explain how some (or all) parts of the Iron Triangle (i.e. the technologies that have supported Alibaba's Iron Triangle) can be applied to the products or services in Financial Institution (banks) in order to improve the KPI's (Key Performance Indices) of your organization.
How does a blockchain-based remittance fit into Alibaba's cloud offerings and what unique value does blockchain technology provide in Alibaba's remittance offering?
What are other areas of application for blockchain in Alibaba's cloud business? (You may suggest some applications that are not mentioned in the case.)
Please discuss how blockchain technology can be applied to the products or services of Financial Institution industries.
Case Analysis for Alibaba In Blockchain Integrating Blockchain Based Remittances Into Cloud Services
1. Based on this case (and some external research if you’d like), please explain in a lay language ‘what the blockchain is’ and ‘how a logistics company can benefit from applying blockchain technology’.
Blockchain is a freely distributed database that records transactions (Crosby, Nachiappan, Pattanayak, Verma, & Kalyanaraman, 2016). It is a public ledger where all exchanges taking place can be saved without fear of alteration or corruption. This is because the blockchain technology is maintained by a peer-to-peer network. The strength of the blockchain is in the ability of the system to work effectively without a central authority, given that the individual participants within the system trust the system. They may not trust one another, but their trust in the system ensures that the mechanism works. Blockchain technology has a lot of potential with a whole host of practical applications. Its most apparent use in trade of goods and services is one such example. Using blockchain transactions can be carried out without the involvement of third parties as intermediaries. If a person in Canada wants to buy a car, they will have to use a digital platform like eBay and process the exchange through a bank. With blockchain, the need for a middleman to act as a guarantor is removed.
Since blockchain is publically available, verifiable records they can be used by anyone. Aside from famous blockchains that are open to the general public, companies can get together to create their own private blockchains. Firms in the logistics industry, for instance, can get together and create a private blockchain. The logistics industry has expanded rapidly over the past few years due to e-commerce. To deal with the growing scale of operations, the logistics industry can keep track of every single transaction, shipment or exchange by simply creating a blockchain to record all of these. In doing so, shippers, auditors, consumers can have free access to verifiable information that is practically unalterable. The entire process of exchange is not only streamlined through the application of blockchain technology, but it is also highly transparent and completely legitimate. This is because, for an entry to be recorded into a blockchain, it requires the consensus of the participants within the system. Logistic companies can improve their data collection and storage as well as increase their production efficiency while cutting costs by implementing the blockchain technology.
2. Please explain how some (or all) parts of the Iron Triangle (i.e. the technologies that have supported Alibaba's Iron Triangle) can be applied to the products or services in Financial Institution (banks) in order to improve the KPI's (Key Performance Indices) of your organization.
Alibaba's Iron triangle consists of the three cornerstones that support the company and make it the e-commerce giant it is. These being e-commerce, finance and logistics. Each element of the Iron Triangle provides Alibaba with a unique advantage due to the advanced technology it employs and the sheer scale of its operations. While the e-commerce and logistics elements are may not be suitable for all organizations, the financial element is something all companies, no matter which industry they operate in, can benefit from. Alibaba's financial affiliate, Ant Financial, which is at $150 billion as of 2018 (Davis & Yang, 2018), the largest fintech firm in the world. The financial institution has plans to implement the blockchain technology in its operations, which is set to provide a whole host of benefits.
The blockchain technology applied to the financial aspects of business, first of all, makes it possible for the organization to record a large number of transactions. The technology is set up in a way that it can deal with data in bulk. This will help enhance growth prospects in firms, as rapid growth needs to be supported by an auxiliary financial system. A financial mechanism that will support an ever increasing scale of operations will help meet the growth objective. Growth is one of the most important key performance indicator (KPI) for any organization. Another benefit of the blockchain technology is increased privacy of data. Data insecurity is a huge issue nowadays, with companies losing millions of dollars each year due to hacks and other types of cybercrimes. The security provided by blockchain infrastructure will prevent losses related to misuse of big data. Since such losses are measurable in monetary terms, improvements can be tracked and set as a KPI.
The most important improvement the new system can offer is the overall increase in efficiency and speed of transactions. With blockchain technology intermediaries are removed so data can be recorded and processed at a greater pace. The ability to handle a huge amount of data, provide greater privacy and make the financial dealings speedier and efficient all have the impact of increasing the productivity of an organization which can be measured in terms of essential KPI like growth, productivity and scale of operations.
3. How does a blockchain-based remittance fit into Alibaba's cloud offerings and what unique value does blockchain technology provide in Alibaba's remittance offering?
The usual way of sending and receiving remittances through banks or exchanges like Western Union and MoneyGram is not only expensive but also time consuming. With blockchain technology, however, the sending and receiving of remittances are simplified. The creation of a publically owned and transmitted ledger of information makes accessing data convenient and cost-effective. The absence of a centralized intermediary, such as a bank, reduces time and costs manifold (Abadi & Brunnermeier, 2018). The remittance market is huge, with a lot of potentials as well since the existing methods of sending and receiving money across borders is expensive, which means that any innovation into the remittance industry, which reduces the service fee and speeds up the entire process will be welcomed. This where the true potential of blockchain technology lies.
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