Blockchain and Business Process Management Synergy

Version	Summary	Created by	Modification	Content Size	Created at	Operation
1		Hamed Taherdoost	--	2099	2024-01-02 02:13:26	\|
2	layout & references	Sirius Huang	Meta information modification	2099	2024-01-03 02:23:20	\|

This entry is adapted from the peer-reviewed paper 10.3390/info15010009

Blockchain technology has become a powerful disruptive force that upends established ideas in several industries. A fascinating point of convergence is that of blockchain technology and Business Process Management (BPM), where the distributed and immutable characteristics of blockchain promise to completely transform the modeling, implementation, and oversight of business processes. This symbiosis offers a singular chance to develop corporate processes that are more efficient, safe, and transparent.

blockchain-BPM integration distributed and immutable characteristics modeling techniques examination hybrid models in BPM

1. Introduction

A decentralized and revolutionary system, blockchain technology records and verifies transactions securely across a network of computers ^[1]^[2]. The system functions as a decentralized ledger in which every node or network participant upholds an exact duplicate of the complete ledger ^[3]. Each block in the sequence of blocks that constitutes this ledger contains a list of transactions. The primary innovation of blockchain technology lies in its capacity to guarantee immutability, security, and transparency in the ledger of transactions. Blocks are formed from transactions, which are connected via cryptographic hashes. Because modifications to a single block would necessitate alterations to all succeeding blocks, the blockchain is impervious to fraud and tampering ^[4]^[5].

A consensus mechanism ensures that all blockchain nodes concur on the validity of transactions before their inclusion in the ledger. Prominent consensus mechanisms consist of Proof of Work (PoW) and Proof of Stake (PoS), both of which possess distinct merits and demerits ^[6]. A feature of blockchain that is fundamentally different is its implementation of smart contracts, which are contracts that execute themselves and contain pre-programmed terms and conditions ^[7]. There are implications for blockchain technology beyond cryptocurrencies, which was its initial use case. There is a growing trend of integrating it into diverse sectors such as finance, supply chains, healthcare, and others ^[8]^[9]. Blockchain’s decentralized and tamper-resistant characteristics can augment confidence, mitigate fraudulent activities, and optimize workflows across diverse sectors.

Integrating blockchain technology and Business Process Management (BPM) has extensive ramifications that profoundly transform the complexities of modern business activities. At its core, blockchain’s decentralized and tamper-resistant architecture fosters transparency in business operations by establishing an immutable repository of truth ^[10]^[11]. By facilitating a secure and verifiable ledger of transactions, this integration instills trust and assurance among stakeholders, particularly in scenarios involving many participants. By integrating smart contracts into BPM, contract enforcement and execution are further automated, accelerating transaction processes and decreasing the likelihood of errors ^[12]^[13]^[14]. The integration of transparency and automation has the potential to profoundly alter how various industries address concerns related to operational efficiency and trust ^[15]^[16].

Ensuring security is of the utmost importance in modern business environments; this is precisely why the integration of blockchain with BPM can be used to safeguard transactions and data via cryptographic techniques ^[17]^[18]. By utilizing blockchain in conjunction with BPM, data are distributed across the network in a decentralized fashion, reducing the likelihood of a single point of failure and increasing the process’s overall resilience ^[19]^[20]. Moreover, the audit trail generated by the blockchain’s immutability is impervious to manipulation, which is of immense value in sectors governed by rigorous regulatory standards ^[21]^[22]. In addition to enhancing security measures, this integration facilitates cost reductions by eliminating superfluous intermediaries and promoting operational efficiency through streamlined processes ^[23]. The convergence of blockchain technology and BPM improves established business procedures and stimulates the development of novel paradigms, thereby serving as a transformative catalyst for the future of business operations ^[24].

2. Modeling Approaches in Blockchain and BPM Integration

Blockchain technology has garnered considerable interest within BPM because of its capacity to augment business process transparency, security, and efficacy. Several modeling approaches are utilized in integrating blockchain and BPM to optimize and align business processes with the capabilities of blockchain technology. One potential strategy involves converting Business Process Model and Notation (BPMN) models into blockchain smart contracts. This conversion would facilitate the automated implementation of business processes on a blockchain-based platform ^[25]. An alternative methodology entails the transformation of business process models, specifically BPMN models, into state charts tailored to the block typology of the blockchain. This enables the implementation of collaborative processes by utilizing auxiliary tools founded on blockchain technology (BCT) ^[26]. Utilizing these modeling approaches is vital for capitalizing on the advantages of blockchain technology in BPM and has been the subject of substantial research and development endeavors.

The prospective advantages of integrating blockchain and BPM via modeling approaches include increased security, automation of business processes, and trust. Organizations can achieve operational streamlining and security by converting BPMN models into blockchain smart contracts, which subsequently automate the execution of intricate business processes ^[25]. This transformation eliminates the necessity for intermediaries. Furthermore, utilizing blockchain-adaptable state charts to represent business process models facilitates the implementation of collaborative procedures by applying BCT-based tools, thereby augmenting the effectiveness and dependability of workflows across organizations ^[26]. These modeling approaches facilitate the extensive implementation of blockchain technology in BPM and are currently the focus of ongoing research to improve their efficacy and practicality.

Even with its prospective advantages, the amalgamation of blockchain and BPM via modeling methodologies also engenders many obstacles and factors to be considered. A significant obstacle is the intricacy of synchronizing current BPMN models with the demands of blockchain technology. This may necessitate reengineering business processes to optimize the potential of blockchain ^[27]. Furthermore, preserving privacy and confidentiality for sensitive business process data stored on a public blockchain continues to be a substantial issue, necessitating the creation of appropriate governance frameworks and privacy-preserving techniques ^[28]. To fully leverage blockchain technology in BPM, it is critical to confront these obstacles; doing so necessitates a multidisciplinary approach that integrates knowledge and skills in BPM, blockchain technology, and information security.

2.1. Traditional BPM Modeling

Traditional approaches to Business Process Modeling (BPM), illustrated by widely used standardized notations such as BPMN and UML, have been instrumental in streamlining and optimizing sequential and linear business processes within centralized frameworks ^[29]^[30]. These methods are particularly effective at representing conventional operations and organizational frameworks in which a solitary authority supervises and carries out procedures. The main characteristics and applications of conventional BPM modeling techniques (BPMN, UML, ERD, DFD) in representing business processes, system architecture, database design, and data flow within systems are outlined in Table 1.

Table 1. Comparison of traditional BPM modeling techniques.

Modeling Technique	Key Characteristics	Primary Components	Application
BPMN (Business Process Model and Notation)	Standardized visual notation for business processes.	- Flow Objects (Activities, Events, Gateways)	Sequential process modeling, clear representation of workflow.
UML (Unified Modeling Language)	General-purpose modeling language with broader applications.	- Use Case Diagrams - Activity Diagrams - Sequence Diagrams	System architecture and design are not exclusive to business processes.
ERD (Entity-Relationship Diagrams)	Focus on database design and representation of entities.	- Entities - Relationships - Attributes	Database design, understanding relationships between entities.
DFD (Data Flow Diagrams)	Visualizes the flow of data within a system or process.	- Processes - Data Stores - Data Flows	Illustrating information flow, system components, and data movement.

However, when confronted with blockchain technology’s decentralized and distributed characteristics, these conventional models need help ^[31]. A substantial obstacle arises in incorporating critical components unique to blockchain technology, including decentralized consensus mechanisms, smart contract complexities, and asset tokenization ^[32]^[33]. The conventional BPM methodology, originally developed to accommodate centralized settings with presumptions of trust, needs to adequately capture the trustless and tamper-resistant characteristics vital to blockchain transactions.

Despite their effectiveness in traditional settings, these models encounter limitations when applied to blockchain scenarios. These challenges include the following:

Decentralized Consensus: Traditional models need help representing the decentralized consensus mechanisms fundamental to blockchain, where multiple parties collectively validate transactions.
Smart Contracts: The intricate logic of smart contracts, integral to blockchain processes, is not easily accommodated within traditional BPM notations.
Tokenization: Representing the tokenization of assets and their decentralized management poses a challenge within the traditional BPM framework.

Traditional BPM models are intended for centralized, trust-based environments. The trustless and tamper-resistant attributes of blockchain transactions, which are intrinsic to the technology’s value proposition, might need to be sufficiently captured.

2.2. Blockchain-Oriented Modeling

Blockchain-oriented modeling signifies a fundamental transformation in the conventional realm of BPM. This methodology seamlessly incorporates blockchain technology’s complexities and distinctive attributes into the modeling procedure. The primary emphasis is on integrating blockchain technology’s trust-based, tamper-resistant, and decentralized characteristics into operational procedures ^[9].

Blockchain-oriented modeling transcends the conventional linear and centralized structures observed in BPM through the development of process models ^[34]. Conversely, it adopts the distributed and decentralized characteristics inherent in blockchain networks. This encompasses the depiction of nodes, smart contracts, and the cryptographic mechanisms that support the ledger’s integrity and immutability ^[35].

When employing this modeling approach, several distinctive factors become prominent. Visual representations are required to illustrate the function of decentralized consensus mechanisms in transaction validation, such as proof-of-work or proof-of-stake. Smart contracts, characterized by their autonomous execution on the blockchain, are seamlessly integrated into the models, thereby exhibiting their triggers and outcomes. Furthermore, explicit representation is necessary to communicate the administration and flow of digital assets within the business processes, as symbolization of assets is a defining characteristic of numerous blockchain applications ^[36].

Although blockchain-oriented modeling has the potential to improve efficiency, security, and transparency, it is full of obstacles. It can be challenging to convey to stakeholders acclimated to centralized models the complexities of decentralized systems. The delicate task of reconciling the necessity for transparency with the criticality of data privacy represents an additional obstacle that demands thoughtful deliberation. Notwithstanding these obstacles, the prospects offered by modeling with a blockchain focus are substantial, granting enterprises the capability to optimize operations within an environment devoid of trust ^[37]. The iterative interaction between BPM processes and critical blockchain attributes is illustrated in Figure 1. Data flow and interaction, data validation, security, audit trail, reporting, and analytics are some of the phases of the BPM process. Key blockchain elements, such as setup, smart contracts, consensus processes, and asset tokenization, are smoothly integrated concurrently. The closed-loop structure illustrates how data move through interactions, go through blockchain validation and consensus, add to a secure audit trail, and are finally used for reporting and analytics. This structure represents the iterative nature of the BPM process ^[38]^[39].

Figure 1. BPM process with blockchain integration.

2.3. Hybrid Approaches

Hybrid models aim to merge the organization and precision provided by conventional BPM with the decentralized and tamper-resistant characteristics that are distinctive to the blockchain. Hybrid methodologies, which integrate blockchain components with conventional BPM, present an adaptable resolution to contemporary business requirements ^[19]^[40]. One significant benefit is their capacity to effectively integrate the streamlined processes of conventional BPM with the decentralized, transparent, and tamper-resistant attributes of blockchain technology. This framework offers organizations a comprehensive and inclusive approach to modeling by ensuring adaptability across various operational structures.

In addition, through the incorporation of blockchain’s fundamental characteristics, hybrid models bolster transparency and confidence. These systems empower organizations to utilize blockchain-specific functionalities, including smart contracts and decentralized consensus mechanisms, while maintaining the transparency offered by conventional BPM. Moreover, the tamper-resistant characteristic of blockchain enhances the security of hybrid approaches by minimizing susceptibility to data manipulation and illicit modifications. By leveraging this enhanced security and adaptability, organizations can fortify their operational procedures against the ever-changing technological environment.

Conversely, implementing hybrid methodologies that effectively merge conventional BPM with blockchain-specific components is a complex yet auspicious undertaking. One significant obstacle is the assurance of compatibility and seamless integration between blockchain technology and conventional BPM tools. These domains frequently use disparate technical frameworks and data structures, necessitating careful strategizing to avert complications throughout the integration process. Thorough deliberation is required to ensure a seamless exchange of data and operations while centralized and decentralized components coexist. Concurrently, implementing blockchain-specific components adds intricacy, requiring comprehensive user instruction and training. In the face of heightened complexity, it is vital to secure user support to facilitate stakeholders’ understanding and navigation of hybrid models.

Furthermore, hybrid methodologies are confronted with the challenge of guaranteeing the integrity and protection of data. The decentralized and tamper-resistant characteristics of blockchain technology give rise to novel concerns, including protecting data integrity throughout transitions and establishing secure communication conduits between conventional and blockchain systems. An additional obstacle lies in the need for hybrid models to accommodate a wide range of business processes while maintaining adherence to standardized practices to ensure interoperability. Lifecycle management and maintenance present continuous obstacles, necessitating organizations to establish resilient procedures to update models, tackle emergent challenges, and guarantee that modifications do not impede the overall efficiency of processes. Addressing these obstacles necessitates the cooperation of IT and business stakeholders, and continuous research and development should prioritize the establishment of protocols, optimal methodologies, and instruments that optimize integration, bolster user acceptance, and guarantee the secure and uniform implementation of business operations at the intersection of blockchain and BPM.

References

Namasudra, S.; Deka, G.C.; Johri, P.; Hosseinpour, M.; Gandomi, A.H. The revolution of blockchain: State-of-the-art and research challenges. Arch. Comput. Methods Eng. 2021, 28, 1497–1515.
Rao, K.V.; Murala, D.K.; Panda, S.K. Blockchain: A Study of New Business Model. In Recent Advances in Blockchain Technology: Real-World Applications; Springer: Berlin/Heidelberg, Germany, 2023; pp. 187–214.
Zhang, J.; Thomas, C.; FragaLamas, P.; Fernández-Caramés, T. Deploying blockchain technology in the supply chain. In Computer Security Threats; BoD—Books on Demand: Norderstedt, Germany, 2019; Volume 57.
Khalifa, E. Blockchain: Technological Revolution in Business and Administration. Am. J. Manag. 2019, 19, 40–46.
Ahmad, L.; Khanji, S.; Iqbal, F.; Kamoun, F. Blockchain-based chain of custody: Towards real-time tamper-proof evidence management. In Proceedings of the 15th International Conference on Availability, Reliability and Security, Virtual Event, 25–28 August 2020; pp. 1–8.
Rebello, G.A.F.; Camilo, G.F.; Guimaraes, L.C.; de Souza, L.A.C.; Thomaz, G.A.; Duarte, O.C.M. A security and performance analysis of proof-based consensus protocols. Ann. Telecommun. 2021, 77, 517–537.
Borselli, A. Smart Contracts in Insurance: A Law and Futurology Perspective; Springer: Berlin/Heidelberg, Germany, 2020.
Taherdoost, H. Smart Contracts in Blockchain Technology: A Critical Review. Information 2023, 14, 117.
Dutta, P.; Choi, T.-M.; Somani, S.; Butala, R. Blockchain technology in supply chain operations: Applications, challenges and research opportunities. Transp. Res. Part E Logist. Transp. Rev. 2020, 142, 102067.
Wang, Y.; Han, J.H.; Beynon-Davies, P. Understanding blockchain technology for future supply chains: A systematic literature review and research agenda. Supply Chain Manag. Int. J. 2019, 24, 62–84.
Ahmadisheykhsarmast, S.; Aminbakhsh, S.; Sonmez, R.; Uysal, F. A transformative solution for construction safety: Blockchain-based system for accident information management. J. Ind. Inf. Integr. 2023, 35, 100491.
Yang, R.; Wakefield, R.; Lyu, S.; Jayasuriya, S.; Han, F.; Yi, X.; Yang, X.; Amarasinghe, G.; Chen, S. Public and private blockchain in construction business process and information integration. Autom. Constr. 2020, 118, 103276.
Viriyasitavat, W.; Da Xu, L.; Bi, Z.; Pungpapong, V. Blockchain and internet of things for modern business process in digital economy—The state of the art. IEEE Trans. Comput. Soc. Syst. 2019, 6, 1420–1432.
Eggers, J.; Hein, A.; Weking, J.; Böhm, M.; Krcmar, H. Process automation on the blockchain: An exploratory case study on smart contracts. In Proceedings of the 54th Hawaii International Conference on System Sciences, Kauai, HI, USA, 5 January 2021.
Gayialis, S.P.; Kechagias, E.P.; Papadopoulos, G.A.; Panayiotou, N.A. A Business Process Reference Model for the Development of a Wine Traceability System. Sustainability 2022, 14, 11687.
Kechagias, E.P.; Gayialis, S.P.; Papadopoulos, G.A.; Papoutsis, G. An Ethereum-Based Distributed Application for Enhancing Food Supply Chain Traceability. Foods 2023, 12, 1220.
Taherdoost, H. Blockchain and Healthcare: A Critical Analysis of Progress and Challenges in the Last Five Years. Blockchains 2023, 1, 73–89.
Hameed, K.; Barika, M.; Garg, S.; Amin, M.B.; Kang, B. A taxonomy study on securing Blockchain-based Industrial applications: An overview, application perspectives, requirements, attacks, countermeasures, and open issues. J. Ind. Inf. Integr. 2022, 26, 100312.
Viriyasitavat, W.; Da Xu, L.; Bi, Z.; Sapsomboon, A. Blockchain-based business process management (BPM) framework for service composition in industry 4.0. J. Intell. Manuf. 2020, 31, 1737–1748.
Bodkhe, U.; Tanwar, S.; Parekh, K.; Khanpara, P.; Tyagi, S.; Kumar, N.; Alazab, M. Blockchain for industry 4.0: A comprehensive review. IEEE Access 2020, 8, 79764–79800.
Upadhyay, N. Demystifying blockchain: A critical analysis of challenges, applications and opportunities. Int. J. Inf. Manag. 2020, 54, 102120.
Ahmad, A.; Saad, M.; Al Ghamdi, M.; Nyang, D.; Mohaisen, D. Blocktrail: A service for secure and transparent blockchain-driven audit trails. IEEE Syst. J. 2021, 16, 1367–1378.
Garg, P.; Gupta, B.; Chauhan, A.K.; Sivarajah, U.; Gupta, S.; Modgil, S. Measuring the perceived benefits of implementing blockchain technology in the banking sector. Technol. Forecast. Soc. Chang. 2021, 163, 120407.
Corradini, F.; Marcelletti, A.; Morichetta, A.; Polini, A.; Re, B.; Tiezzi, F. A Flexible Approach to Multi-party Business Process Execution on Blockchain. Future Gener. Comput. Syst. 2023, 147, 219–234.
Bodorik, P.; Liu, C.G.; Jutla, D. Tabs: Transforming automatically bpmn models into blockchain smart contracts. Blockchain Res. Appl. 2023, 4, 100115.
Garcia-Garcia, J.A.; Sánchez-Gómez, N.; Lizcano, D.; Escalona, M.J.; Wojdyński, T. Using blockchain to improve collaborative business process management: Systematic literature review. IEEE Access 2020, 8, 142312–142336.
Di Ciccio, C.; Meroni, G.; Plebani, P. Business process monitoring on blockchains: Potentials and challenges. In Proceedings of the Enterprise, Business-Process and Information Systems Modeling: 21st International Conference, BPMDS 2020, 25th International Conference, EMMSAD 2020, Held at CAiSE 2020, Grenoble, France, 8–9 June 2020; pp. 36–51.
Viriyasitavat, W.; Da Xu, L.; Niyato, D.; Bi, Z.; Hoonsopon, D. Applications of blockchain in business processes: A comprehensive review. IEEE Access 2022, 10, 118900–118925.
Aagesen, G.; Krogstie, J. BPMN 2.0 for modeling business processes. In Handbook on Business Process Management 1: Introduction, Methods, and Information Systems; Springer: Berlin/Heidelberg, Germany, 2015; pp. 219–250.
Sukhera, S. Modeling Process and Information Systems: Leveraging Technology to Improve Service Operations. Ph.D. Dissertation, University of Ontario Institute of Technology, Oshawa, ON, Canada, 2017.
De Filippi, P.; Mannan, M.; Reijers, W. Blockchain as a confidence machine: The problem of trust & challenges of governance. Technol. Soc. 2020, 62, 101284.
Yapa, C.; De Alwis, C.; Liyanage, M.; Ekanayake, J. Survey on blockchain for future smart grids: Technical aspects, applications, integration challenges and future research. Energy Rep. 2021, 7, 6530–6564.
Leng, J.; Ruan, G.; Jiang, P.; Xu, K.; Liu, Q.; Zhou, X.; Liu, C. Blockchain-empowered sustainable manufacturing and product lifecycle management in industry 4.0: A survey. Renew. Sustain. Energy Rev. 2020, 132, 110112.
Osterland, T.; Jarke, M.; Karagiannis, D.; Rose, T. Analyzing the Sustainability of Distributed Ledger Applications. Ph.D. Dissertation, Universitätsbibliothek der RWTH Aachen, Aachen, Germany, 2022.
Khan, S.N.; Loukil, F.; Ghedira-Guegan, C.; Benkhelifa, E.; Bani-Hani, A. Blockchain smart contracts: Applications, challenges, and future trends. Peer-to-Peer Netw. Appl. 2021, 14, 2901–2925.
Nawari, N.O.; Ravindran, S. Blockchain technology and BIM process: Review and potential applications. J. Inf. Technol. Constr. 2019, 24, 209–238.
Porru, S.; Pinna, A.; Marchesi, M.; Tonelli, R. Blockchain-oriented software engineering: Challenges and new directions. In Proceedings of the 2017 IEEE/ACM 39th International Conference on Software Engineering Companion (ICSE-C), Buenos Aires, Argentina, 20–28 May 2017; pp. 169–171.
Di Ciccio, C.; Meroni, G.; Plebani, P. On the adoption of blockchain for business process monitoring. Softw. Syst. Model. 2022, 21, 915–937.
Molnár, B.; Pisoni, G.; Kherbouche, M.; Zghal, Y. Blockchain-Based Business Process Management (BPM) for Finance: The Case of Credit and Claim Requests. Smart Cities 2023, 6, 1254–1278.
Viriyasitavat, W.; Hoonsopon, D. Blockchain characteristics and consensus in modern business processes. J. Ind. Inf. Integr. 2019, 13, 32–39.

© Text is available under the terms and conditions of the Creative Commons Attribution (CC BY) license; additional terms may apply. By using this site, you agree to the Terms and Conditions and Privacy Policy.

Upload a video for this entry

Information

Subjects: Operations Research & Management Science

Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :

Hamed Taherdoost

Mitra Madanchian

View Times: 179

Update Date: 03 Jan 2024

Table of Contents

Video Upload Options

Confirm