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Blockchains for Business Process Management - Challenges and Opportunities
Jan Mendling, Ingo Weber, Wil van der Aalst, Jan vom Brocke, Cristina Cabanillas, Florian Daniel, Soren Debois, Claudio Di Ciccio, Marlon Dumas, Schahram Dustdar, Avigdor Gal, Luciano Garcia-Banuelos, Guido Governatori, Richard Hull, Marcello La Rosa, Henrik Leopold, Frank Leymann, Jan Recker, Manfred Reichert, Hajo A. Reijers, Stefanie Rinderle-Ma, Andreas Rogge-Solti, Michael Rosemann, Stefan Schulte, Munindar P. Singh, Tijs Slaats, Mark Staples, Barbara Weber, Matthias Weidlich, Mathias Weske, Xiwei Xu, Liming Zhu
TL;DR
Inter-organizational business processes require coordination and trust across organizational boundaries, while blockchain technology still faces numerous unresolved technological challenges. The paper analyzes blockchain’s implications for BPM using the BPM lifecycle and core capabilities, identifying opportunities, challenges, and research directions. It describes trustworthy cross-organizational execution mechanisms while noting constraints around adaptation and broader blockchain readiness.
Problem
Inter-organizational processes face joint-design and mutual-trust challenges, while many general blockchain technological challenges remain unaddressed.
Method
The paper analyzes blockchain’s impact on BPM through the traditional BPM lifecycle and BPM core capability areas, then formulates research directions.
Results
Blockchain can support cross-organizational process execution without agreement on a trusted third party through immutable records, smart-contract monitoring, and selective encryption.
Takeaways & Limitations
Blockchain-based BPM could extend enterprise collaboration beyond asset management to supply chains, food traceability, and privacy-preserving health-record sharing.
Takeaways & Limitations
Runtime adaptation is constrained because blockchain can enforce conformance with a joint process model, making model changes something participants may avoid.
Abstract
from arXiv · showhide
Blockchain technology promises a sizable potential for executing inter-organizational business processes without requiring a central party serving as a single point of trust (and failure). This paper analyzes its impact on business process management (BPM). We structure the discussion using two BPM frameworks, namely the six BPM core capabilities and the BPM lifecycle. This paper provides research directions for investigating the application of blockchain technology to BPM.
1 INTRODUCTION
Inter-organizational business processes have been hindered by joint-design challenges and limited mutual trust. The paper examines how blockchain could support trustworthy process execution and reshape BPM research across lifecycle activities and business networks.
- Inter-organizational BPM faces joint-design challenges and a lack of mutual trust, unlike the established use of process systems for intra-organizational streamlining and automation.
- Blockchain may enable trustworthy execution of inter-organizational processes in networks without mutual trust between participating nodes.Consensus algorithms and market mechanisms help nodes reach agreement and progress the network.
- The paper outlines blockchain-related BPM challenges and opportunities through the BPM lifecycle and through BPM core capability areas.It uses the traditional BPM lifecycle and asks how blockchain might affect BPM beyond that lifecycle.
2 BACKGROUND
Blockchain combines distributed records, consensus, cryptography, and market mechanisms to support trusted transactions and smart-contract-based business collaborations without mutual trust. Applied to BPM, it offers model-driven execution and monitoring across organizational boundaries, while remaining constrained by throughput, latency, usability, security, and other technological challenges.
- Blockchain foundations: Blockchain is a distributed database built from timestamped, tamper-proof transaction records replicated across a peer-to-peer network.Cryptographic hashes link each block to its contents and the preceding block, making unauthorized alterations detectable.
- Blockchain foundations: Consensus-making, cryptography, peer-to-peer networking, and market mechanisms allow parties to transact without trusting one another.
- Smart contracts: Smart contracts encode business rules and can implement inter-organizational collaborations whose execution is made trustworthy by the blockchain.They can express conditions such as penalty payments when a vendor fails to deliver within a specified period.
- Challenges and research directions: The technology remains limited by unresolved challenges including low throughput, latency, usability, confidentiality, availability, and security issues.Ethereum currently supports approximately 15 transaction inclusions per second, while confirmations may take 3 to 10 minutes.
- Blockchain-based process execution: Process models can be compiled into smart contracts, with trigger components bridging blockchain implementations to Web services and internal enterprise applications.Model-driven approaches generate contract code that implements the process, including functions for individual process tasks.
- Blockchain-based process execution: Blockchain execution can provide an immutable message history, global process monitoring, role checks, and selective data visibility across organizational boundaries.Encryption can keep non-required data readable only to the relevant process participants.
3 BLOCKCHAIN TECHNOLOGY AND THE BPM LIFECYCLE
The BPM lifecycle provides a framework for examining how blockchain may alter process management from identification onward. In process identification, blockchain adds an outward-looking evaluation of high-level processes and their strategic implications.
- Lifecycle framework: The BPM lifecycle covers identification, discovery, analysis, redesign, implementation, execution, monitoring, and adaptation.
- Lifecycle framework: Using the lifecycle as a reference enables discussion of incremental changes that blockchain technology may introduce across BPM phases.
- Process identification: Process identification links strategic alignment with process improvement and is currently approached mainly from an inward-looking perspective.
- Process identification: Blockchain adds a perspective for evaluating high-level processes through their implied strengths, weaknesses, opportunities, and threats.
3.2 Discovery
Blockchain-based process discovery must reconstruct inter-organizational processes from fragmented, encrypted, and partly on-chain data, where accounts, keys, and process identifiers may change.
- Blockchain data may be fragmented and encrypted, with payloads stored partly on-chain and partly off-chain.
- Changing accounts and keys complicate the identification of process-related information.
- Transactions may lack logical links to process identifiers, making overall process discovery difficult.
- Repeated alignment of information from all relevant blockchain participants may be required.
3.3 Analysis
Blockchain records can expand process analysis beyond organizational boundaries by providing information about how processes operate, while also enabling novel redesign options such as condition-based smart-contract payments.
- 3.3 Analysis: Blockchain execution records can reveal case load, durations, path frequencies, involved parties, and correlations between process elements.
- 3.3 Analysis: Process analysis can use blockchain records to obtain insights beyond data held within individual organizations.
- 3.3 Analysis: Blockchain technology offers novel ways to improve specific processes or resolve specific problems.
- 3.3 Analysis: Smart contracts can replace a trustee’s payment release when an agreed condition is met.
3.5 Implementation
Blockchain process implementation requires abstractions, modeling and engineering support, and stronger assurance methods to ensure deployed implementations support the intended process.
- 3.5 Implementation: Implementation transforms a to-be process model into software components that execute the business process.
- 3.5 Implementation: Blockchain-based process design needs abstractions, engine libraries and operations, BPMN extensions, and software patterns.
- 3.5 Implementation: Quality assurance, correctness, and verification require approaches and criteria that address consistency and potential payments.
- 3.5 Implementation: Dynamic partner binding and rebinding requires participants to find partners manually or through marketplaces and lookup services.
- 3.5 Implementation: The proliferation of smart-contract templates will require tools that identify templates suited to a given collaboration style.
3.6 Execution
Blockchain execution passes participant messages as transactions to smart contracts and observes resulting messages from blocks, creating correctness and security challenges especially for monetary transfers.
- 3.6 Execution: Process instances on blockchains pass participant messages to smart contracts as blockchain transactions.
- 3.6 Execution: Resulting messages must be observed from blocks in the blockchain.
- 3.6 Execution: Integration with existing enterprise systems or dedicated components such as triggers can support blockchain-based execution.
- 3.6 Execution: The main execution challenge is ensuring correctness and security, particularly when monetary assets are transferred.
3.7 Monitoring
Blockchain-based monitoring can provide each participant with an independent global process view, supporting conformance, compliance, and service-level monitoring, but requires integrating on-chain and off-chain data.
- Monitoring collects execution events, presents them understandably, and triggers alerts or escalations when undesired behavior occurs.
- Blockchain monitoring requires integrating local off-chain data because blockchain data alone will likely be insufficient.
- A shared execution trace allows each involved party to monitor the process independently and check conformance, compliance, and service-level agreements.
3.8 Adaptation and Evolution
Blockchain enforcement constrains runtime adaptation to defined paths and creates coordination challenges when process models evolve. Alternative adaptation approaches allow changes but rely on participant monitoring and reaction.
- Adaptation: Runtime adaptation changes a process during execution, but blockchain enforcement can make participants rely on the joint model being followed.
- Adaptation: Under blockchain enforcement, adaptations must follow defined paths, and smart-contract changes may require transactions signed by all participants.
- Adaptation: A contrasting method permits runtime adaptation but assumes relevant participants monitor execution and react when a change is undesired.
- Evolution: Process evolution requires deploying new smart contracts, while porting running instances between versions requires coordination involving all participants.
4 BLOCKCHAIN TECHNOLOGY AND BPM CAPABILITIES
Blockchain challenges established BPM capabilities by shifting inter-organizational processes toward distributed execution, external governance, and technology-driven strategic change. Its adoption also raises security, privacy, skills, and cultural questions.
- Blockchain extends BPM beyond the lifecycle to capability areas including strategy, governance, information technology, people, and culture.
- Strategy: Blockchain may disrupt strategic alignment by exposing core processes and business models to technological innovations outside the company.
- Governance: Smart contracts might support externally oriented self-governance and new governance models, potentially reducing management discretion or the need for management.
- Information Technology: Blockchain-based execution introduces security and privacy challenges, including confidentiality management, regulatory requirements, and uncertain attack scenarios.
- People and Culture: Blockchain adoption requires extending BPM practitioners’ skill sets and investigating changes in organizational culture through empirical research.
5 SEVEN FUTURE RESEARCH DIRECTIONS
The paper identifies seven future research directions spanning blockchain-based execution, analysis, redesign, adaptation, adoption, strategy and governance, and culture. These directions are intended to guide research on the technology’s challenges and opportunities for BPM.
- Blockchains are expected to shift how organizations handle transactions and manage business processes within their networks.
- Research should develop diverse blockchain execution and monitoring systems and demonstrate their feasibility for process-aware information systems.
- Researchers should devise methods for analyzing and engineering business processes based on blockchain technology.
- Research should redesign processes to leverage blockchain opportunities, including renewed collaboration with external stakeholders and choreographies.
- Research should define appropriate methods for process evolution and adaptation, including the guarantees possible for specific changes.
- Further directions concern identifying suitable processes for blockchain adoption and understanding its effects on strategy, governance, and organizational culture.
- The BPM and Information Systems communities can help shape a distributed, trustworthy infrastructure for inter-organizational processes.