If you’ve been a CIO for a while, you’ve seen many disruptive technologies transform businesses. First, the internet became widespread back in the early 1990s. Companies gained the ability to communicate with customers and employees all over the world instantaneously. Next came the mobile web. Traditional internet companies had to re-think their business models and struggle to survive in the new mobile world. The widespread adoption of cloud computing was yet another hurdle for CIOs to overcome. Traditional on-premise software needed to be replaced with cloud solutions.
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New technologies are being developed all the time, and they can disrupt your business, just like the technologies that came before them. One of the technologies that’s poised to disrupt businesses is blockchain. You’ve probably heard the word “blockchain” before, but you may not know much about it.
Blockchain is the technology that makes Bitcoin, the popular cryptocurrency, work. It’s a shared digital ledger that records transactions. The information is stored on a network of personal computers, not in a central database, like traditional ledgers. When a transaction occurs, a new record is created. These records, called “blocks,” are timestamped and linked together. To change one block, you’d need to change every block in the chain.
Cryptocurrencies aren’t the only use for blockchain technology. This technology can be used for many other purposes. This means it has the potential to disrupt many different industries. In fact, blockchain is such a disruptive technology that it’s been called internet 2.0.
As a CIO, you need to help your company navigate disruptive technologies like blockchain. You need to be prepared for the impacts it could have on your company so you’ll be ready to hire the right employees. Here are some of the impacts technologies related to blockchain could have on your organization.
Reduced Cost of Financial Transactions
The financial industry is one of the industries that will be most disrupted by blockchain technology. Traditionally, financial transactions are conducted through intermediaries like banks or credit card companies. These companies charge high fees. Every time a customer pays your company with a credit card, the credit card company will take a percentage. The business’s bank account is also subjected to monthly fees. These costs add up quickly.
With blockchain technology, intermediaries like banks and credit card companies can be bypassed completely. Instead of paying with their credit cards, customers could theoretically pay you directly through blockchain. You could pay your suppliers in the same way. The reduced cost of transactions could give your business a competitive advantage if you adopt blockchain before your competitors.
Of course, if you work for a traditional financial services company, this is bad news. Your customers may want to use blockchain technology to bypass you and avoid paying your fees. Some financial services companies are partnering with FinTech companies to take advantage of blockchain technologies. Another option is to hire FinTech engineers for your team to help your organization adopt blockchain.
As a CIO, you probably spend a lot of time thinking about your organization’s cybersecurity. You may be worried about threats like DDoS attacks, data theft, and user identity security. These threats can have a serious negative effect on a business. Companies that experience cyber incidents may have to pay fines, and their insurance premiums may increase. They may lose customers or contracts.
Blockchain technology may be able to help you keep your organization secure. That’s because blockchain has no single point of failure. The system is decentralized, so it’s nearly impossible for someone to carry out a DDoS attack. This will give you one less thing to worry about.
This technology can also help prevent data theft. Currently, data can only be encrypted when it’s either being stored or being transmitted. When the data is in use (like when an employee is accessing a file), it has to be decrypted. The data is vulnerable at this time. For example, if attackers can get into the system, they can see the plain-text data the employee is viewing.
Blockchain technology has been used to create a decentralized cloud platform, called Enigma, to solve this problem. Employees can view data and perform their work tasks while still retaining privacy. The data is distributed among multiple parties, so no one has full access to the data. This helps keep your data from falling into the wrong hands.
Better Record Keeping
Businesses need to keep many records. Right now, you may be using on-site servers or cloud solutions (or a combination of the two) to manage all the records. As you know, neither of these storage methods are perfect. Servers can become damaged, and you may not be able to recover your data. Cloud vendors can have server problems of their own and lose your data.
Blockchain technology has the potential to transform record keeping. With blockchain, the ledger file isn’t stored on one company’s server. Copies of the ledger file are shared among thousands of personal computers. Since there are so many copies, your data is more secure than it would be if it were only stored in one location.
When new data is entered in the blockchain, it can’t ever be erased. That’s because the blocks are linked together. Since the blocks can’t be changed, you’ll know your records are true and verifiable. Every transaction the organization has ever made will be stored in the blockchain. This makes blockchain very useful for auditing and record keeping purposes.
Eventually, the entire commercial world’s record keeping could be integrated with blockchain technology. That could eliminate huge amounts of record keeping for businesses.
Industrial Internet of Things
You’re probably familiar with the internet of things (IoT). The IoT is a network of internet-connected objects. These internet-connected objects are able to use sensors to collect and exchange data. You may already have some IoT-enabled devices in your home. For example, you may have a smart thermostat or some smart appliances.
The IoT isn’t just useful around the house. It can also be used in an industrial setting. Various devices and machines in factories can be connected to the internet, where they can communicate with other systems. For example, your machines could be connected to your enterprise resource planning system or your product lifecycle system. This can help cut costs and increase revenue for manufacturing companies.
There are some obstacles to using the industrial IoT right now. In its current form, the IoT poses cybersecurity risks for organizations. The more devices you have connected to the internet, the larger the surface area for cyber attacks. Worries about getting hacked may have kept your organization from embracing the industrial IoT. Another obstacle is the volume of communications that need to occur among devices in an industrial setting. To handle these communications, you could need to maintain a large and expensive data centre.
Blockchain has the potential to help companies overcome these obstacles. With blockchain, you can keep a permanent record of the history of all your smart devices. This will make it easier for you to keep an eye on security and follow compliance requirements. The internet-connected devices can also securely communicate with each other thanks to blockchain. It’s harder for malicious actors to hack your ledger or devices because the blockchain ledger isn’t in one location and doesn’t have just one thread of communication. The decentralized network also helps handle the volume of communications needed by the industrial IoT.
How technologies related to blockchain will affect your organization is yet to be seen—but the possibilities are exciting.
- FinTech Adoption Has Surged Globally Over the Past 18 Months - September 29, 2017
- Understanding Blockchain, Cryptocurrency & Bitcoin - September 27, 2017
- What is Blockchain? - September 25, 2017