Financial Framework for Decentralised Business Process Management

Setting up a financial framework for analysing DBPM (Decentralised Business Process Management) we are going to use the following considerations: 

From a unit economical point of view the most important element that directly carries the cost and indirectly generates revenue is an atomic t transaction. A p process is set up as executing and validating a sequence of t transactions.

In the business model, we distinguish two levels of the business. Core platform is responsible for executing decentralised transactions and processes. On the top of the core platform industry specific solutions can be delivered with the help of partner companies. On a long run industry specific solutions could be implemented directly by partner companies, however it is probably not realistic on a short run. As a consequence initial financial models consider both the development of the core platform and some of the industry specific solutions.
Costs structure is based on the following elements [Figure 1]:

1.    Variable cost:

a.  CoGS is mostly based on executing and validating the transactions on a decentralised consensus. It can be easily scale up or down depending on the customer needs. As opposed to a general Turing complete Blockchain system where executing a transaction might be pretty expensive due to the possibility of the infinite loops, at DBPM runtime of the atomic transactions are always limited from above, implying O(|T|) execution cost for a set of T transactions. The exact cost pretty much depends on the consensus mechanism, implying different numbers at proof of work, at proof of stake or at majority voting.

b.  CoGS is also influenced by storing the states of the validated transactions of a p process. It is manifested as a general storage cost that will be increased as the process itself is used. It requires further considerations if the whole state between two transactions is directly and fully stored in the Blockchain itself or rather off-chain solution might be used and only hash of the state is stored in the Blockchain.

c.  Supporting the system to partner companies or end-users is manifested as an additional variable cost.           

2.   Fix cost factors are mainly the SG&A expenses for running the company itself. As the primary focus is on the partner business, the most important is the professional business development as CAC.

3.    Investment: For a successfully start both the core framework and the first two or three industry specific solutions must be ready. They requires a certain amount of development and initial investment.

Revenue structure has the following factors [Figure 1]:

1.   Core services: customers get the value of using a certain business process itself. As executing a business process practically means executing a set of state changing transactions, it makes sense to charge money after transactions.

2.     Extended services might be possible as well, as providing training or consulting. It might be however a possibility that the company concentrates only core functionalities and every extended service is provided only by partner companies.

Figure 5. General cash-flow schema.

Business Model for Decentralised Business Process Management

Decentralised Business process management or simply DBPM is intended to be a strong infrastructure oriented solution, business model is based on an intensive partner network. The platform is not planned to be sold directly to the end-customer, instead partner companies having the industry specific know-how set up solutions on the top of DBPM [Figure 1]. A more detailed description of the ten types of innovation is covered in chapter plan as general operation model.

Figure 1. Business Model with Ten types of innovation

As DBPM is based on a Blockchain protocol, both cost drivers and profit should be based on transactions. It is certainly a question which digital consensus is applied, at Poof of Work model each transaction or block validation cost directly a certain amount of energy and money called the mining. At Proof of Stake or at general consensus mechanism like voting at Ripple rather a general hosting and participation cost is manifested. In any case profit model should be based on charging the customers after usage for individual or branch of transactions.          

From the network perspective DBPM solution would not be offered directly to the end-customers, instead the service would be sold with the help of strong B2B cooperation via partner companies. Examples can be:

-   consulting companies for setting up cross-company contracts and processes
-   IoT solution providers for setting up decentralised processes between hardware devices, for example for smart-homes.

Structure and process of the DBPM company would be pretty much similar to the classical enterprise software vendors. The core solution is continuously developed; based on the core solution industry specific features are developed. Instead of internal development, a possible way is to work with a strong open source community and develop the framework either with freelancers or with partner companies, just as at Ethereum Foundation. Another aspect that must be taken into consideration is the Network of hosters or miners who actually run the whole system. Depending on the Blockchain solution miners and hosters are paid in either by an internal cryptocurrency system or directly based on revenue.

In the middle of the product performance the core platform can be found: A decentralised P2P process management platform, in which each workflow state transition is validated by a consensus of the whole network. Apart from the core, the product system will contain industry and branch specific solutions and features.

One of the most important feature from a customer point of view is that DBPM is a no-code solution. It means that business processes can be ‘clicked’ together; in most of the cases no software developer is required. It makes a strong impact both on the service and on the customer engagement side. As a consequence of no-code development, distributed business processes can be directly built and modified by the knowledge workers of a specific industry. In this way rapid solution development and continues process improvement can be realised, instead of having long-running development life cycles. 

As a consequence of no-code development, sales channels are the best to realise in cooperation with local consulting companies. As an example on of the Big Four or Big Three companies can be an excellent candidate to use DBPM with local consultants realising indirectly common sales channels as well.

Branding must suggest the core business idea in a way and must suggest a strong and stability. From a technology point of view, name of the core technology can remain DBPM however it is adequate only for strong technical audiences.

Notes on hybrid Blockchain solutions

Blockchain solutions provide a couple of nice characteristics, based on the public ledger: high-availability, high-trust and  immutable. Unfortunately, they sometimes lack of the industrial scale providing an cheap and easy way to work with the Blockchain, or simply the necessary stability or necessary throughput to deal with a huge number of transactions. There is however a way to integrate blockchain to existing systems with creating hybrid Blockchain solutions.

Let we have a classsical IT System, with a couple of standard transactions. Let we say that there are a couple of transactions or system states that are required to be saved and validated in a high-trust and immutable way. Well the natural way is to save them into the Blockchain. Examples might be archiving a document into some kind of a storage with the guarantee however that the data can not be changed or frauded in a later timepoint. The natural way is to calculate a hash (a fingerprint) for these documents and save it to the blockhcain. In this way the registrated fingerprint of the document can not be hacked or modified anymore and in the future it can be always checked if the certain version of the document matches with the saved fingerprint.       

Trust as a Service, Immutability as a Service

Blockchain and Bitcoin technologies do not only provide a way for a high-availability and high-trust system, but several hybrid applications might be possible as well. The bitcoin blockchain has some several characteristic that could be delegated to other non-Blockchain based systems, such features are for instance the immutability and trust of the central ledger. Considering a non-Blockchain application that want to save certain events in a way that they are high-trusted and immutable for future changes the Bitcoin Blockchain provides an excellent way for that.

Notes on Botcoin

 

Considering the current trends of the Blockchain evolution, it is appearing more and more coins that can be programmed in a special way. However, given the possibility of programming and the basic economical rules, it might be the question raised if it is possible to implement intelligence in the coin itself. Let we call this phantasy coin, Botcoin, that works on the one hand as a standard cryptocurrency, it works however on the other hand as an intelligent agent that is responsible for both its own survivol and reproducing.  

Decentralised Business Process Management

Reaching slowly to the second machine age, cooperation and trust between different actors will be an always increasing problem. We did have previously difficulties as well as processes had to be set up including several companies but the situation will be much more challenging as several million more or less intelligent IoT devices start to communicate with each other.

Decentralised Business Process Management (or briefly DBPM) is a customisable process management platform to set up workflows among different untrusted parties, independently if these parties are companies, end-users, end-customers or intelligent gadgets of the IoT revolution. The processes are set up on the top of a Blockchain, as a consequence trust is evaluated by the decentralised consensus itself, making possible to implement complex trust scenarios among many fundamentally different actors. DBPM provides a no-code or low-code way of configuring processes, meaning that most workflows can be clicked together with the help of a web based tool. It implies on the one hand that end-customers without prior development or deep IT knowledge are able to customize processes on their own. On the other hand, consulting companies of different industrial fields are able to set up industry specific process solutions as well; again without the need of coding or deep IT know-how. 

Considering current achievements and technological platforms of the Blockchain Revolution , setting up a DBPM framework and the full business around can be feasible from a couple of million dollar financing.   .

Notes on the next generarion of User Interface Design

It is interesting to see the development of the user Interface or simply user experience technology. as it was a couple of years ago dominated by the display technology itself there seem to be shift in the direction of artificial intelligence and machine learming. And well honestly to say the puspose of the user interface is not necesserily to provide something very fancy or complicated design but to provide an easy and efficient way for commincatons with computer servises. In this sense it is not a science fiction to expect that the next wave of user experience technologies will be 100% based on AI, like on robo advisors.     

Notes on Business Productivity and DAO

Business Productivity means somehow working more efficient, in other words producing as much output for a given time as possible. Considering however from a pure financial perspective human resource is basicaly just a resource that is actually pretty much expensive and risky. We see the tendece for decades that human labour has been actively replaced by software and hardware compontents and noone has ever complaind from the inverstor side.

However if it is really a tendency and a need producing as much output for as little input as possible than we might as well ask the question from the other side, similarly as the question was asked by Ethereum and DAO. 

- Do we actually need humans as work force for value creation ?

- Which activities and Organisation structures can be 100% replaced by algorithms ?

- Which companies and company structures can be fully automated ?    

- How is it possible to invest in a fully automated company ?

Notes on crowd buying

As crowdfunding is an interesting area which is just getting more and more popular, a similar direction gets less attention and that is crowd-buying or social-buying. Crowd buying means practically allocating several buying requests into a thread having a much better position to negotiate and probably getting much better price and delivery conditions. 

The next generation of Business Productivity == Machine Assisted Human Intelligence

Artificial intelligence research has been producing a couple of surprising results nowadays. As the target of most artificial intelligence research is to copy or reproduce somehow the human thinking the question is exciting but somehow much less studied from the other direction: what are the limits of human thinking; where are the limits of the human cognitive capabilities, what are the limits of the human communication or collaboration and how can be these limit overcome with the help of computers, algorithms or generally by IT technology. 

Figure 1. positioning of machine assisted human intelligence.

I think the field is to be found in the intersection of three different areas:

1. Cognitive Science or, generally psychology and sociology should provide input regarding the limits of human communication and thinking.

2. Artificial Intelligence provides probably the best toolkit for algorithmic and IT support of the whole area.

3. Last but not least, Business Productivity is the market. The area in which the results of the field should be positioned, like thinking faster, making better and faster business decisions, communicating better, or just generally achieving more result with less effort. 

Considering current trends in cloud computing and the fact that most providers like Amazon or Microsoft offers Artificial Intelligence as cloud solutions, it is not impossible that in a couple of years productive work will mean that you plug in into a cloud service of machine assisted human intelligence platform.