What if there was a new way to manage contracts between businesses?
What if you could automate contracts so that you could radically reduce the admin burden of your company?
What if the record of transactions between your company and a service provider were permanently available online for accurate tracking and dispute resolution?
All these idealistic dreams and more are becoming realities with the development of new blockchain solutions like Ethereum.
What is blockchain?
Blockchain is a technology that was developed to make electronic money. Bitcoin is the most well known example, which has defied critics to become an established vehicle of monetary exchange. It exists only in a peer to peer network. It is not controlled by any central bank. It cannot be redeemed for gold. Yet, it is a disruptive technology changing the shape of online financial transactions.
The underlying principle of blockchain is a simple transactional record, where an exchange happens between parties on a network, is encrypted by software into a new block and then added to the transactional chain.
What is a smart contract?
A new use for blockchain technology is emerging, where crypto-lawyers are creating legally binding computer code. Blockchain is ideally suited to transform complex legal agreements into step by step processes, which can be captured into software.
Smart contracts are digital agreements between parties on a network, which may require third party intervention for execution or verification. Although they are unlikely to eliminate the need for lawyers and courts, there is no doubt that a disruptive influence is at work in the retail sector just as it is in the financial services sector through bitcoin.
Transactions are being defined, measured and executed in an automated environment, radically reducing admin burdens and costs for retailers, marketers and merchandisers.
How do smart contracts impact the retail environment?
Consider the relationship between a retailer and merchandising company. The contractual obligations of both parties are simple and well understood, but require complex layers of administration and management intervention to execute.
- Was the merchandising correctly done?
- Is there a promotional display in store?
- Was each step of a new product roll out executed?
- Is the in-store marketing set up and changed on the agreed frequency?
Checklists, management reports, invoices and releases can all be automated through smart contracts using blockchain. Some of the verification will require direct intervention from one of the parties, but some can be outsourced to third parties.
Where does Observa come in?
Retail companies define their requirements from merchandisers and demo companies in easily measurable terms. Observa takes those requirements and audits the compliance of the service provider.
For example, Observa can verify whether a brand demo happened in a local store at the agreed time. Janitorial or landscaping tasks can be verified using Observa’s measurement tools. Construction progress can be monitored and milestones checked off by observers in the field.
In a smart contract environment, these third party checks can initiate automatic payment or trigger any other executable clause in the contract.
For more information about smart contracts and third party verification, email us at sales@www.observanow.com.