State Of Enterprise IT 2018

The evolution of IT

Blockchain and cryptocurrencies

By Kelsey Parish, Research Manager

They’re set to be revolutionary and are getting more press attention by the day. How are enterprises reacting to the hype surrounding cryptocurrencies and blockchain?

The two go hand-in-hand, but cryptocurrencies are getting the most attention right now because their value is skyrocketing.

In that case, shouldn’t enterprises already be gearing up to support cryptocurrencies? Maybe, but only two in ten organisations we surveyed are currently investing in it, the lowest of all the digital trends we researched.

Why so few? There’s a couple of reasons.

Organisations need to accurately measure their profits, expenses, and transactions. At the simplest level, as this is often reported in US dollars and the value of all cryptocurrencies is so volatile, adopting them presents a significant risk at worst and a major accountancy headache at best. Would the return on investment in allowing them to accept cryptocurrencies be positive right now?

And not only would businesses have a huge back office challenge on their hands, but the legality of cryptocurrencies around the world is constantly under question as well. This not only increases the volatility of the value, but adds the extra complication of compliance for multi-national organisations. It’s likely that this will remain an issue until the global attitude to cryptocurrencies matures and the financial industry as a whole understands legal issues around them, which probably won’t happen any time soon.

The bottom line is that the 78% who are not currently investing are going to take some convincing to do so.

But what’s even more interesting is blockchain, the technology that cryptocurrencies are based on.

It might be the lesser known (often misunderstood) cousin of cryptocurrencies such as Bitcoin, particularly in the consumer world, but if predictions about blockchain are correct, it will transform every industry. However according to our research, 70% of organisations aren’t investing in it at the moment.

One of the reasons for this lack of investment is that a lot of decisions around IT spending are made outside of the IT department by people who are less likely to be tech-savvy. If their systems are working fine right now and they don’t get the (admittedly hard to understand) logic behind blockchain, there’s little reason for an organisation to spend on overhauling and implementing the technology.

Over a quarter of the decision makers in IT departments we spoke to said that investment isn't where it should be because the rest of the organisation was fearful of new technology, there's a lack of appreciation for how newer technologies could be helpful, or that the culture is stuck in the past. This, coupled with that lack of understanding, means that blockchain isn't likely to be widely adopted very quickly.

The research shows there’s a serious lack of knowledge around blockchain across organisations. What is surprising is that it shows that decision makers in the IT department are struggling to understand it too.

Take the research data about what impact blockchain will have when it comes to GDPR compliance. 22% say it will make it simpler, 31% say it will have no impact, and 19% just don’t know. Blockchain makes details around transactions public and permanent, meaning anyone involved relinquishes their rights to delete or change information. It’s a GDPR nightmare, without question. And IT decision makers not knowing this is a worrying finding.

What does this mean for tech marketers?

Undoubtedly there’s interest in organisations for both cryptocurrencies and blockchain, but that alone is not enough to prompt investment. The problem here is two-fold – tech buyers across the organisation need to understand how these technologies actually work, and they need to know how those technologies can be integrated into (and then improve) their existing infrastructure. An educational approach is needed before they’ll truly be sold on the idea of either technology.

Any thoughts?

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