Up until now, much of the advancement in digital technology has been about doing what we have long done in much the same way but more quickly, often more conveniently, and without the paper (or at least with a whole lot less of it).
Now, people are starting to look at the possibilities of technology and to see how it can be used to do what we have always done in a new and more efficient way. Unified ledger integration is one example of this.
It may seem like centuries ago, but paper-based ledgers were the standard for accounting well into the second half of the 20th century. The nature of ledger books meant that only one person could work on them at a time, and that that human error was a very real issue.
When IT began to be a feature of the corporate world (around the late 1970s) the computer programmers of the time asked the financial professionals of the day what they would like to see and, the financial professionals said they just wanted computer programmes to do what they did already – so that was what they got.
As time passed and technology developed, those early systems have moved from hard drives to the cloud and have substantially improved – but fundamentally, they’re still much the same as the old paper ledgers which were used throughout most of history.
The basic idea behind a unified ledger is simple: every credit has a partner debit and vice versa. Rather ironically, putting this theory into practice has been a whole lot more complicated than it sounds. Current “unified” software often has to use “behind the scenes” tricks to give a unified effect, making software far more complicated than it should ideally be.
Now, however, blockchain technology holds the exciting prospect of creating genuinely unified ledgers, without any technical trickery needed. What’s more it can operate unified ledgers both in real time and simultaneously, basically as soon as one person records something the record will be updated immediately in all copies of the ledger, regardless of whether or not someone else is working on them.
There will be no more need to open and close ledgers or to keep control accounts. That, in itself is exciting enough, but the real reason to get excited about genuine unified ledgers is because of the quality and timeliness of the data they produce.
Over recent years, some of the biggest names in IT have been grappling with the challenges of Big Data, which is essentially data sets that are too big to be managed using traditional systems. Now, there are real advancement in this area, such as IBM’s “Watson” and its corresponding “Watson Discovery Service”, which is being promoted as a means for companies to make the most of their data.
Combine unified ledgers with Big Data systems and you have the recipe for business analytics that are better than anything we’ve even imagined up to now. It’s very much a case of “watch this space”, as innovations are happening all the time.