ORLANDO, Fla. — In South Korea, a credit card company uses blockchain technology to let its staff and customer base — 23 million altogether — sign on easily and securely to its platform.
Another company, which offers a rewards program for customers, also leverages blockchain to ensure its 9 million daily users can access services.
Blocko, a Seongnam, South Korea-based blockchain company, is powering both platforms. Both clients saw value in a blockchain solution because it fit the use case, according to Jae Shin, chief marketing officer at Blocko.
"We haven't focused on blockchain but in assessing needs and then giving the technology to address those needs," Shin said last month in an interview with CIO Dive during the Gartner IT Symposium/Xpo in Orlando, Florida.
It's one way the company found to convey the potential of blockchain, especially for companies in heavily regulated sectors like financial services.
Per a review of early blockchain adoption cases by Gartner, the three key hurdles enterprise-level organizations faced were:
- An inability to get involved parties to smoothly work together
- Clearly identifying the value the technology brings to the table
- Scalability and maturity of the technology.
Though it's the early days of development, blockchain is headed for widespread adoption. Failure to catch up will come at a cost for enterprises, that risk giving up a competitive edge as industry and consumers embrace blockchain long term.
Blockchain by the numbers
In its 2019 Hype Cycle, Gartner warned most blockchain technologies were stuck in the "experimentation mode," failing to deliver on expected outcomes.
But the road ahead seems clear for the continued evolution of the underlying technology. By 2021, the analyst firm expects the technology to move past the experimentation phase. However, Gartner does not expect blockchain to become fully scalable technically and operationally until 2028.
"The hype in this technology is significant," said Rajesh Kandaswamy, chief of research and Gartner Fellow at Gartner, speaking at the IT Symposium/Xpo, last month. "But actual adoption is rare."
In a review of 1,063 enterprise companies, Gartner found early blockchain adopters mostly hail from highly regulated industries like banking and securities, alongside communications, media and services companies, and manufacturing and natural resources.
Organizations which have blockchain projects up and running represent just 4% of the group. Almost half of companies, 48%, said there was no interest in deploying blockchain, while the remaining 48% of companies have plans to invest in blockchain within three years.
Most use cases in the enterprise have had to overcome barriers. Mainly, companies have grappled with stakeholder dynamics, internal commitment and immaturity of blockchain.
The non-technical challenges can become "thornier than technical ones" as they impact the dynamics of tech adoption, said Kandaswamy.
These are the three key issues identified by Gartner's research:
1. Getting all parties to work together
Instead of having competing blockchain projects under development at different companies, success stories include the formation of standalone companies or consortiums in order to better articulate a strategy around a specific technology.
One example is the Enterprise Ethereum Alliance, which in 2017 connected JPMorgan, Credit Suisse, Accenture and other financial services companies with blockchain technology company ConsenSys to work on reducing inefficiencies in financial applications.
2. Internal issues in securing commitment and proving value
Partly due to the hype surrounding blockchain technologies, the outcomes and value they can bring is often vague for teams.
Overselling the value of blockchain, or attempting to force the technology into a project that doesn't call for it, can derail the effort.
"The benefits are still vague," Kandaswamy said. "There's not a common shared understanding, and that's still a big problem."
Early adopters learned there's a need for internal work to convey the potential of blockchain and the value they can deliver, as most technologists have a certain level of skepticism regarding the technology.
"Investing in education internally is critical to get a shared understanding," Kandaswamy said.
3. Maturity, reliability, performance and scalability of technology solutions
It's unlikely blockchain technologies will fully catch up to the hype in the coming years, according to Gartner.
Companies wanting to deploy blockchain need to be prepared for deployment processes marked by the iterative solution of issues as the technology evolves.
"Plan for the immaturity of solutions that will evolve over time," said Kandaswamy.