Could blockchain play a major role in cyber security and risk management efforts at organizations? The jury is still out. But it’s clear that blockchain—defined as a “single version of the truth” made possible by an immutable and secure time-stamped ledger—continues to garner interest among businesses in a variety of industries.
With blockchain, data is secured through cryptography and all new transactions are linked to previous ones, which renders it nearly impossible for someone to change older records without first having to alter subsequent ones.
Enterprises are beginning to look to blockchain as an important tool for ensuring data privacy, according to a recent report from global consulting firm Globant. The study, 2019 Blockchain Technology Business Guide, is based on a survey of more than 650 U.S.-based senior-level marketing, IT, and operations decision-makers.
The report shows that organizations are eager to invest in blockchain tools to improve their internal operations. Decision makers cite the ability to easily and securely record and share digital information as the technology capability most useful in helping them pursue greater internal growth.
The enthusiasm toward blockchain has not yet translated into readiness, however, with less than half of organizations (46%) saying they feel prepared to effectively use blockchain to improve their internal operations.
Still, 64% of organizations consider blockchain a current technology initiative. Among the 61% of companies already researching blockchain, just over one quarter (28%) have selected their first vendor or have already moved on to another provider. But the majority of decision makers are still exploring and comparing vendors and have not yet formalized their interest in blockchain.
The research showed that 71% of decision makers agree that the mere presence of blockchain technology can boost customer confidence in a company’s power to protect their personal data.
While 2018 was a year for “getting excited about blockchain,” this year will bring focus onto pushing forward investments and driving return on investment (ROI) from them, the report said. Organizations know they need to find opportunities to increase the value of their blockchain systems, whether they’ve just begun research or are in the midst of a full-scale deployment.
“Blockchain is a useful technology to help decentralize data outside of traditional enterprise boundaries and share digital information with greater trust,” the report said. “To effectively assess the business value of blockchain, however, organizations must first deeply understand the technology’s capabilities and upkeep requirements.”
The ease with which decision makers can explore hundreds of new products means that too many blockchain programs are executed in isolation, the report said. That’s a problem because by its very nature blockchain thrives as a social technology. Every participant along a blockchain must commit to collaboration in exchange for the benefits of moving operations online, it said.
Collaboration is becoming increasingly vital as blockchain evolves from version 1.0 to version 2.0, the study said. In its earliest days, blockchain efforts focused on developing the network and establishing best practices, and “real-world” use cases were mostly limited to cryptocurrencies. Today blockchain benefits from the addition of smart contracts and better facilitates binding interactions between players, both inside and outside the organizations.
Having greater collaboration opens new doors for digital exchanges, the report said, but it also requires that all stakeholders in the blockchain embrace tighter relationships and remain accountable to them.
“Blockchain is democratized technology for everyone, and your culture must reflect that,” the report said. “It’s nearly impossible to use technology to its fullest capabilities and benefit from enterprise-wide performance improvements when departmental or individual interests reign supreme.”
For example, CTOs and CIOs have quite different experiences exploring and thinking about blockchain, Globant said. This leads to disparity in their goals for the technology. On the information side, a higher familiarity with technology hurdles leads to risk aversion, despite enthusiasm for blockchain among CIOs. On the other hand, CTOs hear about blockchain often, which can push them to quickly find use cases for the technology, despite and potential hurdles that might exist.
“When all stakeholders come together around the same decision-making table, you’ll find that strategic blockchain investments offer overlapping benefits across departments and enterprises,” Globant said. “Increased collaboration is always the first step.”
Blockchain is more than just a database or distributed ledger, the report said, even though the technology is often associated with these capabilities. In reality, blockchain tools offer data-driven organizations many points of value, including consensus certifications, built-in state engines and more, the study said.