Tech giant IBM is developing a new blockchain product that will automate the reconciliation of casual labor contracts.
Technology news site CIO reported on Feb. 3 that IBM considers the blockchain particularly well-suited to tackling the pain point for businesses of resolving discrepancies across thousands of casual work contracts.
A casual work contract — sometimes known as a contingent work contract — is a non-permanent employment relationship, which typically offers contractees less job security, and often part-time or payment on a piece work basis.
It is thus used for work done by consultants, freelancers, independent contractors and temporary contract workers, known as temps.
Blockchain thrives on reducing friction, says IBM
IBM has its sights on the blockchain for enterprise management of such contracts, as it notes that processing the high volume of contracts generated by casual workers is a cumbersome and insufficiently automated task for firms at present. Burton Buffaloe, leader of global logistics and blockchain at IBM, said:
“One of the biggest pain points of all suppliers of contractors is invoice reconciliation. Blockchain lives in the spaces where there is friction and discrepancy.”
Dubbed the Contingent Labor on IBM Blockchain, IBM’s system automates the tracking of time sheets and purchase orders, while mediating between approved parties involved in the invoicing process, Buffaloe explained. Should the system’s worldwide rollout prove successful, it will soon go to market, CIO reported.
China is already implementing blockchain for invoices
The U.S.-born tech giant is not the only global player to recognize the potential benefits of the technology for invoicing: in China, internet giant Tencent — the developer of social media platform WeChat — provided the Shenzhen Tax Service with a blockchain-based invoice system last year.
As of November 2019, Tencent’s system had processed invoices comprising a total value of over 7 billion yuan (nearly $995 million).
IBM has continued to research blockchain and its applications, such as tokenized financial services. As reported, the firm was recently awarded a patent for the development of a “self-aware token” designed to record events related to offline transactions.