Procedures, supply chains, smart contracts and how they save costs

This week we’ve discussed standard operating procedures, dynamic / variable operating procedures and touched on how they impact a future supply / value chain that is far more digitised and potentially has far more actors involved (eg freelance resources).

The digital trust mechanisms of blockchain open up opportunities for smart contracts to change the way businesses operate. Smart contracts have the potential to remove the need for administrative approvals and automate complex activities between producer / consumer partners in a supply chain. [Ed. As an aside, I thought you might like Marc Andreessen’s blog post here about Robots Eating all the Jobs, which aligns quite well with how I think automations will change the way we work within OSS and far beyond, but we’ll save that for a future post]

This is also a potential game changer for IoT type of applications / platforms and their interactions with OSS / BSS, but that’s only the secondary point for today.

My primary discussion relates to OSS / BSS already being in a prime position to identify waste / inefficiencies in their organisations, but smart contracts potentially take that to an even greater level with their associated time-stamping of activities that may otherwise not be being tracked.

Waste comes in many different forms, but documentation waste becomes an interesting one in relation to smart contracts. Let’s say it’s a simple contract, whereby the buyer sets the requirements for authoring a design document for their new OSS. They find a supplier and agree on an amount for the delivery of said document, with that amount being placed into escrow until such time as the buyer approves the document.

Now let’s say that the buyer is a large, bureaucratic organisation, with many contributory approvers, but has one approver who knows the target OSS platform so intimately that he is able to envisage a never-ending stream of race conditions that he insists must be catered for in the design (even though their likelihood is almost non-existent). Over time, the “all-but finished” document extends from 30 pages to 150+ and each of the 10 approvers has to re-review each of the 50 amended versions over a 3+ month period.

This scenario means the supplier runs up a loss on the creation of the document, delivery time is delayed by months and the buyer has wasted $100k (50 days @ $2k per day considering the average seniority of the reviewers). Everyone loses, whether in the current approval model or this simple smart contract model. But what if the smart contract was amended to include a concensus vote rather than unanimous approval (ie it needs only 8 of 10 reviewers to approve)? Does that revision now make it a risky contract because perhaps one of the remaining two uncovers something vitally important that was missed by the other eight?

Does Agile / DevOps make the documentation so lean that it never even gets to 30 pages let alone 150+? As you can see, I’m fascinated by how these nascent technologies may circumvent the waste scenarios we uncover whilst working on OSS projects.

What do you think? Is there a better way of managing the documentation waste that is often prevalent in OSS and service provider environments?

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