HOW CAN BLOCK CHAIN TECHNOLOGY IMPROVE BUSINESS PROCESSES IN THE UAE

Answer

TABLE OF CONTENTS

Executive Summary  3

1.0          Introduction   4

1.1          Research Background and Scope   5

1.2          Research Scope   6

1.3          Research Questions  6

2.0          Literature Review    7

3.0          Proposed Methodology  8

4.0          Timelines  9

Reference List  11

Executive Summary

Increasing rivalry among businesses is forcing them to embrace innovations across different processes to achieve competitive advantage. One of the current innovations is the block chain technology. The necessity to adopt this technology is not only driven by the need for innovative and differentiated systems, but also by the UAE government since most of its processes are embracing block chain technology. This research therefore seeks to evaluate how block chain technology can improve business processes in the UAE. The literature review proposes the use of the task-technology fit (TTF) theory which argues that technologies enable incremental innovation which empower a business to consistently improve its products and cost-efficiency. The actual research will be conducted over a two and a half month period where qualitative and quantitative data will be collected using virtual interviews administered to target groups of respondents selected from leading businesses in UAE using convenient sampling. The information collected will help answer the question how block chain technology can be useful in improve business processes.

How can Block Chain Technology Improve Business Processes in UAE

Introduction

The increasing intensity of rivalry among firms is forcing them to innovate. Whereas there are three main types of innovations; namely product, process, and business model innovation, most firms find it cost-effective to apply the process innovation. According to Nambisan et al. (2017), process innovation entails combining technologies, skills, and facilities to enhance the efficiency of production and delivery of services and products to the customers. There are countless ways of improving processes but the most common is the introduction of new technologies that optimize decision making, and the value chain. One of the revolutionary technologies changing the way businesses deliver the ultimate value is the block chain technology. Most people associate block chain technology with digital currencies such as bitcoin. However, the concept behind this technology has been termed as very powerful and useful to businesses since it goes beyond crypto currencies. Wang et al. (2019) describe blockchain as a digital record of transaction. The name is derived from its structure where individual records known as blocks are interlinked together to form a single list known as a chain.

Bloch chain is used to record and keep transactions made using crypto currencies. A more detailed definition associates block chain with a form of distributed ledger technology (DLT) that capitalizes cryptographic hashing and decentralizes systems to record histories of digital assets in a manner that is transparent and unalterable. Viriyasitavat et al. (2019) elaborate on this definition by explaining that block chain is characterized by their ability to distribute digital assets rather than allowing them to be copied or transferred. The second characteristic is that the digital assets are decentralized, thus allow real-time access by authorized persons. The third characteristic is that block chain supports ledgers that are unalterable, thus enforcing trust in digital assets (Nowiński & Kozma, 2017). These characteristics have attracted businesses to embrace block chain in improving their processes as the technology is tamper proof, transparent, and free from fraud or risks.

Research Background and Scope

This research is prompted by a number of reasons. First, the intensive pressure for firms to innovate their business processes to increase efficiency, deliver better value, and save on operation costs is one of the main reasons why businesses are opting for the block chain technology. As explained in the introduction, the technology has proven to be transparent and tamper proof. As a result, its adoption is likely to impact two segments of the business. Frizzo-Barker et al. (2020) classify these segments as external focus and internal focus. Externally, the organizations will use block chain technology to network, achieve agility, and improve quality of its products and services. Internally, block chain technology will foster integration, efficiency and compliance.

The second reason to probe the impact of block chain technologies on businesses, especially in the UAE is the fact that the government is among the first movers in embracing and adapting new technologies. For instance, the UAE government adopted block chain in December, 2020 under the code name Dubai Block chain Strategy and Emirates Block chain Strategy 2021 (Petratos, Ljepava & Salman, 2020). The technology is being used to conduct transactions. Both projects seek to transform 50% of government transactions to using the block chain platform by the end of 2021. The Dubai strategy is specifically focused on making the city the first fully powered user of block chain platform by 2021, thus making Dubai the happiest city globally (Smart Dubai, 2020). The strategy is noted to target increased government efficiency, international leadership, and industry creation. To monitor the project, the government introduced the Global Block chain Council and the Dubai Future Foundation to facilitate transition to the block chain platforms. Some of the targeted areas for the transition include the Roads and Transport Authority (RTA) where car manufacturers, regulators, dealers, buyers, sellers, insurance firms, and garages will share digital records about the history of vehicles from the manufacturers up to the last consumer or scrapyard (UAE, 2021).  Such changes championed by the government forces businesses to embrace block chain. For that reason, it is important to probe the possible impacts of the block chain technology on businesses in the UAE to provide knowledge and help firms prepare for the ultimate transition. Backed by this explanation, the research will be useful to businesses in sharing knowledge on how the block chain technology will affect their businesses and guide them on how best to respond.

Research Scope

The scope of this research is limited to identifying the impact of block chain on private entities in the UAE. These firms have limited knowledge on block chain technologies and thus, the completed research will be very useful. The scope of the research is further shaped by the research questions.

Research Questions

• How can block chain technology improve business processes in the UAE?
• What business process improvements opportunities does block chain technology enable?
• What theories explain the impact of block chain technologies on businesses?
• How will block chain disrupt existing business processes?

Literature Review

There is a paucity of information and data on this topic area, especially the impact of block chain on processes in the UAE. Additionally, there is a lack of connection between this technology and related theories. However, more researchers are undertaking studies to create a deeper theoretical understanding of the impact of technologies on innovation of business processes. Pan et al. (2020) identify three business processes mostly affected by innovation. These are management processes, supporting processes, and operational processes. Spies, Grobbelaar and Botha (2020) explain that the task-technology fit (TTF) theory provides the best explanation on the impact of technologies on processes. For instance, the theory explains how technologies enable incremental innovation which enables a business to consistently improve its products and cost-efficiency.

The TTF theory is evident in a range of literature. This includes Nokiti and Yusof (2019) who explore the perception held by students regarding the use of block chain technology in institutes of higher education in the UAE. The authors share the view that the demand for reliable methods of verifying student records across the educational sector makes block chain a viable technology that will improve operations at the universities. The author further note that given the novelty of the technology, it is important that the government creates awareness and shares knowledge and skills through government-funded workshops to educate users how best to benefit from block chain.

Xie et al (2019) explain that block chain technology can be useful if adopted into the concept of smart cities. The technology will speed urbanization and modernization of cities. Besides, it will help in management of environmental, social, and economic challenges facing most cities. The outcome of these improvements will be seen in the improved quality of life and living conditions of the city dwellers. In particular, block chain presents a tamper proof platform which eliminates pseudonymity and instead, promotes secure transactions that are also democratic, automated, decentralized, transparent, and secure. The authors note that the use of block chain could help create smart healthcare, smart transportation, smart supply chain management, smart grids, and smart citizens (Nam et al. 2019). Andoni et al. (2019) second these sentiments noting that block chain can be applied in the energy supply sector by the supply firms to ensure tamper-proof, transparent, and secure systems that when combined with smart contracts, can improve businesses.

Viriyasitavat and Hoonsopon (2019) present complementary views noting that the block chain architecture will revolutionize business processes by eliminating consensus bias and time inconsistency, and instead, boosting validity, auditability, disintermediary and persistency to businesses. The authors add that the technology further provides flexibility as it allows business partners to access distributed data on the performance of firms. Chang, Chen and Lu (2019) explain that block chain could be useful in re-engineering of smart contracts by introducing a smart contract tracking process. The outcome of these improvements will affect digital lives. The authors collectively noted that block chain technology will revolutionize the different aspects and processes of businesses. As much as it is advantageous, the implementation will be problematic to some firms. One major challenge touches on the high costs of implementation, including training.

Proposed Methodology

The research methodology will be guided by Saunders research onion model, which identifies research philosophies, approaches, strategies, choices, time horizon, and techniques and procedures for conducting research. A general outlook on this research evidence the need for exploratory research that uses mixed methods research choices composed of qualitative and quantitative methods (Iovino & Tsitsianis, 2020). The primary data collection process will entail the use of online survey done through the research monkey software. Virtual interviews will also be administered to target group of respondents selected using convenience sampling. The interviews will be administered to managers of leading entities in the UAE. The primary data collected will be complemented by secondary journal articles, digital databases such as Google Scholar and ebscohost, as well as website articles from reliable sources such as government websites (Iovino, & Tsitsianis, 2020). The collected raw data will be sorted and analyzed using the thematic approach where similar themes will be identified to make inferences.

Timelines

Table 1: Gantt Chart detailing the timeline for research study

The research will be cross sectional, meaning that it will be done in one sitting (Davidavičienė, 2018). The whole process of collecting the data and preparing a dissertation or research report will be conducted over a two and half month period. The first step will involve seeking consent from different authorities and respondents. The actual research will be done as summarized in the timeline above.