Blockchains are all the rage! The New York Times, citing a recent World Economic Forum report, stated “80 percent of banks around the world could start distributed ledger projects by next year”. In her June technology agenda, Hillary Clinton called for the development of “public service blockchain applications”. Even Dilbert has included a number of strips featuring blockchains!
Fifty-five of the world’s biggest financial institutions have joined the R3 consortium, which is focused on the use of blockchain technology in global financial markets. Many of the same firms are among the 60+ members of the Linux Foundation’s Hyperledger Project, a collaborative cross-industry effort created to advance blockchain technology. Most of these firms now have dedicated teams of developers whose sole focus is to explore new distributed ledger opportunities.
So what are mid-tier and smaller firms to do? Their budgets are tight. Their IT directors are more focused on keeping the lights on than they are on exploring budding opportunities, nor do most of them have the resources to do so even if they wanted. At the same time, all this talk of blockchains and distributed ledgers has many of them feeling they may be missing the boat.
They should relax! Mid-tier and smaller firms are as likely to in-house develop blockchain-based systems as they are their core accounting platforms, i.e., they’re much more likely to buy these applications than to build them.
Which is not to say their IT directors should just ignore what’s happening in this space, as it’s very likely to be highly impactive in the not too distant future. Rather, they must begin to factor this in as they acquire new 3rd-party applications or renew their contracts on existing ones. Before making new contractual commitments, they should ensure that their vendors have a strategy for including this technology in their platforms. This is especially true for applications involving the tracking of asset ownership, identity management, and transaction logging, which covers a lot of ground. Moreover, IT directors should not limit their focus to long-established application providers, as there are many startup firms working this space that may warrant consideration.
Firms that are not feeling comfortable with how this technology will impact their businesses should consider periodically bringing in external help to review their strategy and to identify areas where blockchains / distributed ledger systems might play a role in their future. They may also wish to bring in some outside help when purchasing / renewing core applications.
IT directors needn’t feel chained to the blockchain revolution, but they do need to understand how that technology will likely be a part of their future.