Organizations are actively searching for new channels to serve their partners and customers more efficiently, and smart contract technology is emerging as a leading tool to enhance business processes through automation. In 2022, seventy percent of business leaders report piloting automation tools in one or more business units or functions, up from 66 percent in 2020. These technology advancements are not merely trends but essential components to reshaping business operations. 

There are numerous ways organizations are utilizing automation, one that has been increasingly popular includes intelligent document management and processing tools. Smart contracts are an example that plays a significant role in executing and processing routine business transactions. 

What are Smart Contracts?

Smart contracts are self-executing programs, stored on blockchain, that automate the actions required in an agreement or contract when predetermined conditions are met. They are designed to reduce the need for intermediaries, such as banks or lawyers, and can be used across various industries, including finance, real estate, supply chain management, and healthcare. Smart contracts offer a decentralized and tamper-proof way to facilitate, verify, and enforce the negotiation or performance of a contract. This innovation has proven to be a game-changer in unlocking seamless transactions for organizations.

Advantages of Smart Contracts 

The advantages of smart contracts lie in their self-executing nature. Once the predefined conditions coded into the contract are met, the contract automatically executes, eliminating the need for intermediaries or manual intervention. This accelerates the transaction process and reduces the risk of errors and fraud, fostering a more secure and transparent business environment.

Moreover, the widespread adoption of smart contracts creates a new era of trust in business relationships. Blockchain ensures that all parties involved have a real-time view of the transaction history, offering transparency and accountability. This shift towards decentralized, automated processes is a strategic move to stay more competitive.

Use Case Applications 

Smart contracts find versatile use cases across various industries. For instance, in finance, smart contracts streamline complex financial transactions, automating processes such as loan approvals and payment settlements. Healthcare is another sector experiencing the impact of smart contracts, as they facilitate the secure and efficient sharing of patient data among healthcare providers, ensuring timely and accurate medical interventions.

The integration of smart contracts and automation is not just a technological upgrade; it represents a shift in the way businesses operate. In the United States, the market size for smart contracts accounted for $187 Million in 2022 and is projected to grow to $1,417 Million over the next decade. As organizations continue to explore and implement these innovations, they position themselves to excel in a market defined by efficiency, transparency, and trust. The combination of smart contracts and automation technologies guides organizations toward a future where seamless operations are not just a goal but a standard practice.

Smart Contract Adoption

Global businesses are increasing their usage of smart contract technology to improve core organizational functions like vendor management and supply chain. In 2021, Walmart partnered with IBM to create a food traceability system rooted in blockchain to track the sources of its inventory using smart contracts. This implementation enabled its supply chain team to source the origins of specific units of produce within a mere 2.2 seconds.

Home improvement retailer Home Depot implemented a similar process to decrease the time and resources spent to resolve inconsistencies with its vendors. This was effective in empowering its employees with the ability to manage, track, and analyze data in real-time to implement solutions with reduced friction. 

As more organizations adopt the technology to improve efficiency and automation processes, businesses worldwide will experience an exponential increase in productivity and servicing capabilities for their customers.