If the last 18 months have taught us anything, it's that 1) we can be more remote and still get things done, and 2) staying connected is more important than ever. However, staying connected across highly distributed networks – whether we're talking about people, geography or technology – has its challenges. Connecting teams and systems more closely is undoubtedly a positive thing for companies, but it should be done with an understanding of some of the pitfalls to avoid.

The biggest risk to security is being distributed further. An increase in potential attack vectors increases risk, but there is a less obvious threat to operational processes. Risk of losing trust in relationships and transactions as you expect. How can you trust actions, content, or someone's history or something you have never done before? If you want to set up alternative supply chains or production sources as a risk management strategy, how do you manage unknown risks? How can you be sure of the credentials of the machinery, equipment, or product you buy?

After all, our economy depends on it. How can we trade, co-operate or cooperate if we don't have? Historically fiduciary brokers sat in the middle of these deals, guaranteeing both sides of the arrangement. But times change. So many transactions need to happen quickly and across borders, where appropriate brokers don't exist, and are too slow or expensive. What does faith look like today?

Establish trust in a digital relationship 

Extensive documentation, verified by third-party brokers, conflicts with the digital way of working based on trading and commercial contracts in the past. These processes require maintaining the same steps but are conducted through digital interfaces that are more open and more complex.

Distributed ledger technologies (DLT) can fill this gap. A distributed ledger describes a method of creating decentralized copies of transactions instead of storing them in a central location (such as a database for digital or a document for analog). What makes DLT so exciting and relevant is that it has been conceptualized and developed for this decentralized digital world where trust is at a premium. Instead of building on existing relationships, trust can be placed on encrypted processes (so-called consensus algorithms), which control transactions. It's not just about storing data securely that builds trust, it's also about how it's collected. Nodes in the DLT decentralized infrastructure can decide under which conditions they will capture and record new transactions and when they will not.

Where does distributed ledger technology fit in? 

Blockchain is the best-known example of DLT, which in some ways has hindered the adoption of some very valuable DLT solutions. Blockchain has a relatively low transaction processing capacity (only a few transactions per second) and high transaction fees (between $5 and $60 per transaction). And it carries a high cost and energy consumption rate. This is not correct for many business applications, because the transaction value does not justify the cost of processing it on the blockchain, or there are thousands of devices or data sources that can be combined and the blockchain simply cannot process everything in time. However, with the right DLT solution, many business cases are ripe for modernization.

·        Trading – As more transactions are digital, documentation must be supported. However, simply digitizing documents may raise questions of forgery or tampering. Physical documents can be fully notarized and therefore carry a high level of security. Like blockchain, other DLT tools create a single source of truth that cannot be tampered with. So if you're tracking a product's manufacturing and/or supply chain, you know the data is safe. If your suppliers require payment before shipping, but you want payment on receipt, you can use DLT to meet in the middle and keep the business moving.

·        Operational History – Service and maintenance of machinery, equipment and vehicles require extensive cataloging. Nothing but a plane. Documentation tracking where the aircraft went, how much fuel was consumed, what maintenance was done and by whom. This helps to prove the aircraft's readiness for future flights and its safety rating if resold in the future. This digital log book is equally relevant for any organization with expensive equipment that needs to prove its credentials to use or sell.

·        New Business Model – A highly feasible and widely applicable business model that can be built on DLT is machine-per-use financing. This is a concept that already exists but is difficult to control and the risk of non-adherence to maintenance schedules or misreporting of usage is high. Undisputed, automated collection and storage of information on machine usage, wear indicators and output helps ensure transparency in this contract. Not only is this a low-risk approach for equipment owners, but DLT's built-in trust levels the playing field for small/new companies with low 'trust credit' ratings.

Where to start? 

Blockchain specifically has no place in your business. However, the broad spectrum of DLT certainly does. There are solutions that already solve the so-called blockchain trilemma: guaranteeing high security, scalability/performance, and decentralization. IOTA, for example, uses the 'tangle', an acyclic structure that maintains strong encryption while increasing speed. It also avoids classic transaction fees, which would be prohibitive for applications in the IoT area through alternative consensus algorithms based on node reputation. And that's just one option.

To make an investment in DLT successful, there are three key considerations: 

·        Do your research - there are dozens of options. Determine what you need to achieve and then find the solution that best fits those needs. Choose the one that works for you

·        Prepare your processes – Determine how things actually work vs. how they should work, and fix them before you start. Committing broken processes to a distributed ledger is a short-term solution

·        Don't think of it as a complete solution — technology is highly sophisticated and can do a lot to help a business, but it must be part of a larger transformation initiative that aims to truly connect the enterprise.

Cooperation and collaboration are increasingly important to a successful business. Digital transformation forms its foundation, but the decentralized nature of digital business requires some decentralized processes. This is how truly connected enterprises come into existence.