Blockchain technology continues to innovate a variety of industries. No longer just a public ledger for cryptocurrencies, the decentralization and data-storage techniques employed by the blockchain can be used in a variety of ways. The popularity of Ethereum has made it easier than ever for organizations to build their own applications on the blockchain protocol, and the ever-developing smart contract concept has been scouted for applications in government, medicine, and entertainment.
Blockchain technology can be used for nearly anything. The decentralized storage of data in a public ledger allows companies to keep records, organize information, and store data in a safe manner. Many companies are becoming interested, and employer desire for IT professionals with a background in blockchain technology is slowly becoming commonplace.
Despite all of these developments and possibilities, several obstacles stand in the way of mainstream application of the blockchain as a method of storing, organizing, and assessing information in the corporate world.
Gartner is a leading business advisory company located in the United Kingdom. In a recent press release, the organization revealed a wealth of statistics gathered from their survey of Chief Information Officers all over the country regarding their interest in blockchain technology—or lack thereof.
It doesn’t seem to be mere disinterest that prevents the spread of blockchain to CIO toolboxes. Issues concerning a learning curve, technological capabilities, and the hiring of competent blockchain engineers and developers continue to constitute a barrier for CIOs in getting blockchain into the workplace.
This guide will break down the key arguments found in Gartner’s May 3rd press release, including the facts, causes, and possible solutions to the lack of blockchain technologies employed by CIOs.
Organizational Disinterest In Blockchain
The first clear cause of blockchain’s absence in many companies is simple—companies just aren’t interested in it. Gartner’s annual CIO survey from 2018 found that 77 percent of companies had “no interest” in developing/applying blockchain technology to their technological infrastructure.
Consequently, global adoption of blockchain is depressingly low. Gartner finds that, in May 2018, only one percent of companies have deployed a substantive blockchain implementation plan, and 34% of companies had absolutely no interest in the technology. 43% of companies said the technology was “on the radar,” but they did not have a plan to act.
It is clear that organizations all over the world have an active disinterest in the development of substantive blockchain technology for their business. Unfortunately, this is not the only issue which precludes further exploration of blockchain’s versatile applications.
Obstacles To Technological Implementation
Even CIOs that do express interest in developing the technology express the presence of significant logistical and technical barriers to its implementation in their own business. The Gartner survey found that 68% of CIOs who were currently in the short-term planning phase of blockchain initiatives indicated that there were clear structural components within the organization that made implementation difficult.
The complaints fell into three main categories.
23 percent of those interviewed felt that the technology requires “the most new skills” to implement within their organization. This is justified; most companies are not yet accustomed to the blockchain technology, and current CIOs are unlikely to have been educated in a time when the technology would have been important to their future career.
Another 18 percent of interviewees found that blockchain skills were the hardest to find in potential employees.
14 percent of CIOs interviewed revealed that the integration of blockchain technology would require and cause a “change in culture” in their IT departments. It is likely that IT departments adopting the technology would have to experience significant shifts in leadership as those with blockchain knowledge or experience take charge.
Perhaps the most worrying finding was 14% of CIOs who felt that there would need to be a fundamental structural change to their IT department for blockchain to be implemented effectively. Though this is similar to a culture change, a structural revision would likely represent an overhaul of sections of employees or the creation of a new team—both terrifying prospects for HR and IT alike.
One CIO seems to have perfectly characterized the Gartner perspective on an important obstacle to blockchain implementation. He outlined that an understanding of blockchain requires knowledge of “security, law, value exchange,” as well as a host of additional components. Consequently, he argues that implementation of blockchain would fundamentally alter the nature of Information Technology, acknowledging that the lines of business and organization are blurred and must change to embrace new technologies.
Finance And Insurance Companies As An Example
Gartner’s research led them to believe that financial and insurance companies are leading the charge to implement the blockchain in their business models and corporate infrastructures. This should come as no surprise; information storage and finances were the original purposes of the technology.
But the article also points to transportation, utility, and government sectors as quickly-developing appliers of blockchain technology. The primary use of the blockchain for these entities is to help facilitate increased efficiency and capitalize on supply chain optimization opportunities.
The example section of the Gartner press release ends on a dark, but optimistic, note. Gartner finds that applying blockchain to existing business and economic models will be a difficult task, and that it will “take time to re-engineer.” This point harkens heavily back to the earlier complaints of CIOs. The blockchain technology is such a fundamental shift in the way users of technology view the transfer of information that a re-engineering is required for its adoption into existing models of business.
Conclusion: The Future Of Blockchain
A successful expansion of blockchain technologies into the mainstream will be reliant on a few things happening.
First, companies must begin to embrace the revolutionary tech and apply it to revitalize and reform their own businesses.
But it doesn’t stop at desire. In order for companies to truly implement this unique technology, they must be willing to incur structural changes, cultural reforms, and re-engineering. The qualms of CIOs must be conceded in exchange for the implementation of a technology that seeks to fundamentally change the way companies do business and view information.