How blockchain-based audits help to build confidence enterprise-wide.
Tapping tamper-proof audit logs of critical enterprise data to minimize auditing expenses.
How complexity erodes trust in today’s enterprise
Today, global economic relations are going through an unprecedented moment in time. The increasing pace of innovation, expansion of globalization, fractionalization of employment, and overall instability in the workforce, all compound business interactions and dictate to adopt the new modus operandi for internal business processes. Let’s have a look at how each of those fundamental shifts affects confidence in organizational governance and erodes trust in external business relations.
The pace of innovation has significantly accelerated over the course of the last decade, and companies have difficulty keeping up to adjust their internal operations to its demands.
According to the 2017 PwC Innovation Benchmark, 54% of organizations showed low confidence in bridging the gap between their innovation strategy and overall business strategy. This only further indicates that the organizational structures are too stagnant to deal with the speed and intensity of the outside world. In a global survey of managers and executives conducted by MIT Sloan Management Review and Deloitte, close to 90% of executives anticipated that their industries would be disrupted by digital trends to a great or moderate extent, yet only 44% said their organizations were adequately preparing for the disruptions to come.
Another significant factor at play is the rise of globalization and import-export operations. To be able to act fast and process a growing flow of transactions and documentation from overseas partners’ subsidiaries, companies have no other choice than embracing new agile methods and tools.
Instability of employment and fractionalization of the workforce is also shaking up the outdated governance systems that were not designed to operate at this level of complexity.
The Bureau of Labor Statistics reported in 2017 that 55 million people in the U.S. are “gig workers”. This accounts for approximately 34% of the U.S. workforce, projected to increase to 43 percent in 2020. More so, the number of migrant workers is also on the rise: according to the report, there were an estimated 164 million migrant workers globally in 2017. Indeed, not being able to estimate how long an employee is to stay with the company doesn’t contribute to the internal organizational stability either.
By and large, this ever-growing complexity erodes trust among stakeholders and overall business confidence standing in the way of efficient corporate governance and expanding to new markets.
As a result, companies suffer from poorly managed risks, lost business, and extra costs, all of which are essentially due to the structural inefficiencies and inability to cope with the ever-growing amount of data. To stay ahead of the competition in this new multifaceted environment, organizations need to be fluent in using the most advanced tools to optimize and grow their business.
According to Gartner’s latest annual Audit Plan Hot Spots Report, chief audit executives are getting increasingly concerned about how to govern and protect data. At the same time, more than half of the organizations lack a formal data governance framework and dedicated budget.
Finding the proper software for lean in-house auditing
The increasing complexity of the business environment demands innovative technical rails to deal with emerging operational risks, but cost-efficient lean audit solutions are very scarce, and hiring the Big Four remains the prerogative of big budgets. The good news is that you don’t need huge audit teams: with the right technology at hand, timely and credible audits can be a breeze for everyone. Enterprise-grade platforms for independent yet trusted auditing of operational transactional data are coming out of stealth to enable businesses to run in-house audits without involving costly auditors while keeping sensitive data on the premises.
With a tamper-proof trustless framework for continuous assessments of operational data built on top of the blockchain protocol, a human auditor will be eliminated to the extent where reports are generated automatically as per the parameters entered into the system.
Remove the burden of costly auditing with the blockchain-geared systems
There’s a handful of up-and-coming startups building agile technical infrastructures for reducing the cost and operational difficulties associated with slow and expensive auditing frameworks betting on DLT’s inherent capability to validate the provenance and immutability of data, i.e. to track its source and history. Essentially, the value prop of this tamper-proof audit trail comes down to removing the middleman factor that triggers the inefficiencies of outdated audit systems with their high operational costs and lengthy processing times. It means that you can be 100% sure about who, where, and when generated a piece of data and track its further movement.
Aramamino’s TrustExplorer is an auditing protocol offering real-time, distributed, and final audits with the blockchain ledger acting as the single point of truth capturing all data transactions.
Taraxa makes use of the PoS blockchain ledger to deliver a single platform for independent, trusted auditing of operational transactional data. This will enable businesses to run in-house audits without third-party CPAs involved while keeping the data on their premises.
Factom Harmony can be integrated into existing solutions to build up blockchain-powered audit and compliance workflows. Through portable cryptographic proofs, users enable trusted inputs for internal and external audits. What makes Factom Harmony a game-changer is that it reduces the time and resource requirements to perform audits and meet compliance objectives.
Cost-cutting in the post-COVID19 times is hard choices the focus of everyone’s attention. Blockchain has proved to be very efficient for building the tamper-proof audit log of critical ops data. The time is now to reap its benefits for reducing operational expenses.