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Research reveals "scarcity" of blockchain deployments

Government CIOs represented the second biggest segment of those surveyed

Furlonger: it is "critical" to understand what blockchain is and of what it is capable
Furlonger: it is "critical" to understand what blockchain is and of what it is capable

Blockchain technology remains massively overhyped with only one per cent of CIOs deploying blockchain within their organisations, according to new research.


Gartner’s 2018 CIO survey also showed that only 8 per cent of CIOs were in short-term planning or active experimentation with blockchain, while three quarters (77 per cent) said their organisation has no interest in the technology and/or no action planned to investigate or develop it. Government CIO’s were the second largest segment surveyed.


Blockchain: Look before you leap


The report also cautioned that rushing into blockchain deployments could lead organisations to significant problems of failed innovation, wasted investment, rash decisions and even rejection of a game-changing technology.


"This year’s Gartner CIO survey provides factual evidence about the massively hyped state of blockchain adoption and deployment," said David Furlonger, vice president and Gartner fellow. "It is critical to understand what blockchain is and what it is capable of today, compared to how it will transform companies, industries and society tomorrow."


Skills for blockchain


Among 293 CIOs of organisations that are in short-term planning or have already invested in blockchain initiatives, 23 per cent of CIOs said that blockchain requires the most new skills to implement of any technology area, while 18 per cent said that blockchain skills are the most difficult to find.


A further 14 per cent indicated that blockchain requires the greatest change in the culture of the IT department, and 13 per cent believed that the structure of the IT department had to change in order to implement blockchain.


CIOs also recognised that blockchain implementation will change the operating and business model of the organisations, and they indicated a challenge in being ready and able to accommodate this requirement.


"The challenge for CIOs is not just finding and retaining qualified engineers but finding enough to accommodate growth in resources as blockchain developments grow. Qualified engineers may be cautious due to the historically libertarian and maverick nature of the blockchain developer community,” added Furlonger.


"Blockchain technology requires understanding of, at a fundamental level, aspects of security, law, value exchange, decentralised governance, process and commercial architectures," he continued. "It therefore implies that traditional lines of business and organisation silos can no longer operate under their historical structures."


Leading the way

From an industry perspective, CIOs from telecom, insurance and financial services indicated being more actively involved in blockchain planning and experimentation than CIOs from other industries.


While financial services and insurance companies are at the forefront of this activity, the transportation, government and utilities sectors are now becoming more engaged due to the heavy focus on process efficiency, supply chain and logistic opportunities. For telecom companies, interest lies in a desire to "own the infrastructure wires" and grasp the consumer payment opportunity.


In previous blockchain research Gartner recommended that organisation should explore blockchain in a “structured and objective way”, seeking out the use cases that are most relevant to them.


It also identified a number of promising and practical blockchain use cases that show evidence of broad government interest. They included:

  • Voting

Using blockchain for voting capabilities is of interest to many governments. Although few governments have used the technology for elections at a national level, Sierra Leone being the first, Ukraine conducted a few blockchain pilots for regional elections. And Brazil intends to conduct national referenda using blockchain-enabled voting.

  • Complex data (records)

Many governments have announced an intent to store and manage government records on blockchain. The US states of Vermont and Delaware, as well as the city of Dubai, have shown some of the most visible and ambitious efforts on the use of blockchain for government records – primarily property ownership records but also utility bills and permits. The Republic of Georgia’s initiative with Bitfury is just one of several efforts aimed at creating blockchain-based land-registry services.

  • Connected identities

Blockchain-enabled identity and access management (IAM) applications introduce alternative methods to establish trust and resiliency with little reliance on centralised infrastructure. The US Department of Homeland Security (DHS) has experimented with a digital identity network, effectively delivering a “single sign-on” experience.


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