Blockchain is the latest business and technology Holy Grail du jour. It is this year’s Artificial Intelligence or Big Data – both now “so yesterday” when measured by fervor. I recently wrote in this space about How Blockchain is Impacting Healthcare and Life Sciences Today. Clearly, there is great potential, and with this come great expectations.
Blockchain holds the promise of creating new levels of data trust, while providing a shared history of activity (“a ledger)”. Blockchain can improve the efficiency and reliability of transactions and exchanges of data between multiple parties, and can track the flow of activity and actions taken upon that data. In a time of unregulated and ungoverned data usage and exchange, Blockchain holds the potential to introduce a historic record of activity leading to greater data veracity.
I recently hosted an executive roundtable breakfast on the topic of Blockchain in Healthcare and Life Sciences. The breakfast drew Chief Data Officers, Chief Analytics Officer, Chief Information Officers, and senior data science executives from firms including Aetna, Alexion, Astellas, Cigna, CVS, Partners HealthCare, and Takeda among others. These executives shared their excitement, and some skepticism, over opportunities to apply Blockchain to issues of traceability and lineage in areas such as clinical trials, health information exchanges, and to combat counterfeit pharmaceuticals.
Two summers ago, in July 2016, Massachusetts Institute of Technology (MIT) hosted a working group session in Cambridge, MA, in response to a call to action at that time from the then White House Commission on Cybersecurity. MIT Connection Science, organizers of the working group, published a summary whitepaper entitled Towards an Internet of Trusted Data: A New Framework for Identity and Data Sharing. The 2016 MIT discussions sought to understand Blockchain in the context of the larger economic and societal transformation, as we have moved from an industrial economy to an information-based economy over the course of the past half century. This information economy is increasingly characterized by digital interactions based on online data and transactions. As data has proliferated (Big Data), so too has the need to manage, distribute, govern, access, and utilize data, in a secure, protected, and trusted manner. It is within this context that Blockchain has emerged as a potential solution.
Yet, for all of the promise and potential represented by Blockchain, there remains a critical gap in both understanding and execution. I attended an industry program last fall in New York which featured a discussion of how Blockchain might be a factor in disrupting the financial services industry. At the conclusion of the discussion, the panel moderator commented, “Well, I still don’t understand Blockchain”. From my experience, this reaction is not uncommon. Understanding the role and application of Blockchain remains a challenge for many executives, both business and technical, who seek to grasp the significance and potential business impact of Blockchain to their organizations.
One obstacle to understanding Blockchain is that explanations can come across to some as sounding highly technical or “architectural” in nature, making it difficult for non-technical executives to understand how Blockchain may be relevant. Executives want to know how Blockchain will translate into business value and business benefits? Will it make my organization and our data more usable, reliable, safer, or more dependable? What will be the business impact of Blockchain? Why will Blockchain matter? For Blockchain to take hold, the rest of us non-specialists will need to develop a richer understanding and appreciation of what Blockchain is and is not, what it can do and what it cannot do.
This gap in understanding Blockchain is matched by a current gap in execution as well. A recently published study from Gartner Group confirms that only 1% of the 3,138 Chief Information Officers (CIO’s) who were surveyed had already “invested and deployed” Blockchain initiatives. Further, no more than 22% of CIO’s reported any type of “planning or experimentation” with Blockchain. An overwhelming majority of the CIO’s who were surveyed (77%) reported “no interest in the technology and/or no action planned to invest or develop it”. A further breakdown indicates that 43% of CIO’s report that Blockchain is “on the radar, but no action planned”, while 34% of CIO’s report “no interest” at all in deploying Blockchain. Clearly, the execution gap is real today. Nonetheless, Gartner strongly cautioned that companies that ignore Blockchain do so at their own peril.
Since the MIT working session of 2016, fears relating to data security, data leaks, and rampant data misuse have moved from theoretical threats to daily realities, as can be attested by the most cursory review of the news. The timing for Blockchain might never be more urgent than now, but organizations must chart a course to experiment and innovate around the edges, establishing Centers of Excellence, Innovation Labs, or consortiums to validate the promise of Blockchain. Ultimately these efforts will lead to wider adoption, as organizations address both the technology and cultural challenges that represent an obstacle to any new technology and business approach.
For now, Blockchain holds great promise. In the ensuing years, we will understand whether Blockchain can fulfill its ambitious, and perhaps revolutionary, potential.
Randy Bean is an industry thought-leader and author, and CEO of NewVantage Partners, a strategic advisory and management consulting firm which he founded in 2001. He is a contributor to Forbes, Harvard Business Review, MIT Sloan Management Review, and The Wall Street Journal. You can contact him at rbean@newvantage.com and follow him at @RandyBeanNVP.
