In my last blog post I described the work we are doing in the InterWork Alliance to improve interworking in the token-powered space by helping organizations come to agreement on how value is represented as tokens, and how contracts are written over those tokens. Let’s now take a look at how this sort of standardization can help improve business processes.
Can interworking changes really improve business processes?
““When we first talked about the touch-screen, the guys came back and said, ‘There’s nothing like that in the automotive supply chain,’” Musk said. “I said, ‘I know. That’s because it’s never been put in a [expletive deleted] car before.”
― Ashlee Vance, Elon Musk: Inventing the Future
Consider health care, retail, supply chains, media and entertainment – these are examples of long-established industry verticals with business processes that require some form of insurance to mitigate risk. Because there is no standard language for specifying these business processes and expressing the insurance need, and an incredibly wide range of technological standards within and across verticals, only the very largest players have the resources to understand the specific technological requirements of every consortium they would like to serve – and we tend to see ‘specialty boutiques’ pop up to deliver industry-tailored offerings.
It doesn’t have to be this way!
Think about it… consider that there’s some new vertical consortium spinning up and they need to have an easy way to add insurance into their business flows. The consortium should not be responsible for defining insurance contracts – that’s the role of an insurance company. If the consortium used the Token Taxonomy Framework (TTF) for defining the tokenized representation of whatever it is they want insured, they would have marked the token with the ‘insurable’ behavior – which simply sets the placeholder that an insurance company can later fill with the proper contractual clause. This sort of standardization at the business language level allows any company to fill the role of insurer in the consortium by writing the clause for the token that has been defined with the ‘insurable’ behavior, and that clause can simply be added into the overall consortium contract.
There are tremendous benefits for having standardization of the underlying tokens and contracts to ensure that they work together; standardization truly opens up new market opportunities for companies providing services that are commonly required across diverse industry groups.
This is the sort of interconnected, working network that the InterWork Alliance (IWA) is trying to get to, in steps. We tackled tokenization first because that’s the lowest level problem to solve. Right now, we’re starting to work on the contractual part – again, we are not talking about writing a contract but rather the building blocks of the contract to make them interoperable with other contracts and tokens themselves.
Interworking standards set the stage for true data analytics
“It will be found, in fact, that the ingenious are always fanciful, and the truly imaginative never otherwise than analytic.”
– Edgar Allan Poe
Related to the need to shift from a technology-first to business-first approach, we are also seeing a new pattern emerge around analytical workloads. As customers move from multi-party transactions towards multi-party contracts, they find they have a lot of “linked” data generated by these systems – and it would be really valuable if that data could be shared with contractual partners to perform some multi-party AI over it (subject of course to any restrictions that might preclude my data from being seen by competitors). How can I write a contract for this, and how can I find some way of agreeing on multi-party shared schema for these multi-party analytical workloads?
This is the emerging pattern that we are seeing. We are beginning to envision value-added multi-party analytics on top of the core trusted infrastructure where multiple parties can share or pool data to gain insights that would ordinarily be left undiscovered. We can clearly see a future for highly efficient cross industry, cross organization contracts that have access to lots of data that could be reasoned over to further streamline and optimize business processes across organizations. This might lead to new breakthroughs – perhaps in a medical field, finding inefficiencies in supply chain, or addressing sustainability challenges. Analytics is, in effect, the third part of the IWA framework triad – tokens, contractual clauses, and analytics.
This can change the world!
“The future we will invent is a choice we make, not something that just happens.”
– Satya Nadella
Sustainability use cases are very clear candidates for this form of standardization because of the polarization typically found among the participating groups. Think about how hard it has been to come to any form of universal agreement on global carbon mitigation.
Climate accounting is already a major growth industry – the carbon credits market has surpassed $50 billion, and the Green Bonds market is in the hundreds of billions. Environmental, Social, and Governance (ESG) reporting is already common practice among corporates worldwide, and eventually every nation and large sub-national government will need to follow suit.
But few standard solutions exist to date! UN efforts to administer a global agreement are fraught with delay and indecision over implementation and accounting standards. How does one get organizations with widely divergent views to define implementation and accounting templates that are able to eliminate fraud, incentivize behavior change, be transparent, and engage new technologies? A technology-neutral solution with standardized tokenization of key elements, standardized clauses for carbon ledgering templates, and market-driven multi-party analytics can resolve this impasse.
In fact, sustainability focused on carbon mitigation is one of the first use cases that we will put through our new processes at the IWA. We are right now organizing the working groups for the tokenization and the contractual layers, and in the backend looking at the analytical workloads as well to see how this would work for a use case in this domain.
The IWA is about solving big-picture pain points. We are not going to define the programming – or how you implement it all – but rather create the frameworks for how we need to tackle these workloads. We need passionate, business-focused leaders in our standards working groups who can come in and help clearly create frameworks that are usable not within just the same vertical but cross verticals. That’s the real value. If you are of this mindset, there is plenty of room for you at the IWA! Check us out at https://interwork.org/. And please do scroll to the bottom of this page and subscribe to our mailing list to be sure you always have access to our latest information.