Shruthi Rao is the Co-Founder and Chief Business Officer at Vendia, a multi-cloud data sharing startup. She is a mother of 4 boys and 2 dogs.
Being able to track data is becoming increasingly important for today’s industries. For example, if automakers can’t communicate with their partners in real time, they will struggle to ship cars faster and more cost-effectively. Airlines will not be able to offer their passengers the best itineraries at the best price if they do not have access to the latest information about sales channels and available seats. And coffee suppliers can’t see the origin of their beans and communicate with sellers without accurate supply chain tracking.
Problems in data silos, real-time partner communication, and supply chain tracking are just a few examples of where organizations struggle to understand the ever-increasing amount of data needed to run a business effectively.
On paper, blockchain appears to be the perfect solution to these data problems. In fact, a recent Deloitte study found that: 86% of executives believe there is huge business potential in blockchain technology. The perceived value of blockchain comes from its ability to share data quickly and securely in a decentralized manner. And while the promise of blockchain for businesses is exciting, the implementation is excruciating. Companies turning to traditional blockchain solutions are quickly faced with a whole new set of integration, scalability and overall performance issues. Here are the top three reasons why I don’t think blockchain is necessarily the solution for all businesses looking to streamline data.
The technologies are not compatible.
Enterprise blockchain applications require integration with other business systems to work. This means that legacy systems, applications, and datasets need to be seamlessly integrated, which is a big deal if you and your partners use different providers. If the tech stacks don’t align perfectly, the consistency, user experience, and overall performance of the technology will be severely limited. This creates a whole new set of silos and data problems. That means if your company uses AWS and your partner uses Azure, it will be impossible to exchange data and communication through the blockchain solution. That then puts you in a very difficult position to convince your partners, who are often many, to change cloud providers.
It is difficult to perform.
Due to the misalignment in tech stacks, IT teams are immediately forced into problem-solving mode to get their blockchain technology up and running. It takes an average of six to 12 months and hundreds of thousands of dollars to set up the first blockchain infrastructure for most companies. And if they ever go into production, most traditional blockchains will require specialized developers to maintain and manage, which most companies don’t have. This long and expensive process is where most companies decide that the effort required to get this solution up and running isn’t worth it.
To be expensive.
The costs of deploying blockchain technology in a business can be enormous. It applies not only to the human resources required in hiring consultants and specialists who understand the technology, but also to the hardware and technical resources involved in implementing the technology into your company’s existing systems. Companies are also about to pay for their partners to restructure their tech stacks, if they don’t already.
I’m here to tell you that most large enterprises don’t have blockchain problems; they have data problems. And when it comes to implementing a solution, you can find ways that work with the technology and systems you and your partners already have.
Rather than implementing traditional blockchain technology as a comprehensive solution for solving your data-sharing challenges, I believe that businesses should take an alternative approach offered by systems such as next-gen blockchains and serverless distributed ledgers.
These modern technologies are already proven to help organizations securely share data between multiple partners, as seen in use cases for supply chain tracking, financial settlement scenarios, and partner data exchange.
When considering solutions to manage your business data across parties and providers, successful companies can win by:
• Outline the business problem you are trying to solve and work backwards. Not all types of blockchain solutions make sense for the data sharing challenges your business may face.
• Ensure that the data sharing solution you want to implement works with your existing tech stack and offers flexibility.
• Ensure you have the in-house support to implement and manage new technology or solutions you introduce. You should not hire specialists or consultants just because of blockchain technology.
When it comes to solving data problems, companies should feel encouraged by the number of technology solutions available to them today. By taking the steps described above, business leaders can not only find the most effective solution for their specific business needs, but also ensure that it is the most efficient and cost-effective method to support their business goals.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.