Fewer than 1 per cent of CIOs globally have invested in or deployed any kind of blockchain-based solution within their organisations, a survey from Gartner indicates.
The survey of 3138 CIOs – including 113 in Australia and New Zealand – found adoption of distributed ledger technology to be almost non-existent, although 8 per cent indicated they were at a ‘pilot execution’ stage.
More than a third of respondents said they had absolutely no interest in the technology, and 43 per cent said it was ‘on the radar but no action planned’.
Blockchain technology has been “massively hyped” in recent months explained Gartner analyst David Furlonger, who warned rushing into deployments could lead to “significant problems of failed innovation, wasted investment, rash decisions and even rejection of a game-changing technology”.
A number of Australian firms do have pilots underway however, including Australia Post, which intends to use it to store identities; the Australian Securities Exchange (ASX) which will replace its CHESS (Clearing House Electronic Subregister System) with a blockchain-style system by 2020; Blackmores and Fonterra which are taking part in Alibaba’s blockchain-based ‘Food Trust Framework’ pilot; and Webjet, which in February rolled out ‘blockchain as a service’ to four external partners to help them reduce the financial losses and pain caused by disputed bookings.
The Commonwealth Bank has also run experiments using blockchain, involving smart contracts and issuing bonds. Energy company AGL has staged a desktop trial of blockchain-based energy trading among households.
Despite the huge hype – with public companies announcing blockchain initiatives often seeing their stock price soar – for most companies however, the technology remains a solution in search of a problem.
"While many industries indicate an initial interest in blockchain initiatives, it remains to be seen whether they will accept decentralised, distributed, tokenised networks, or stall as they try to introduce blockchain into legacy value streams and systems," Furlonger said.
Among the 293 CIOs that already have or soon plan to invest in blockchain, nearly a quarter said it required ‘the most new skills to implement of any technology area’. Some 18 per cent said blockchain skills were the most difficult to find, 14 per cent indicated that blockchain required the ‘greatest change in the culture’ of the IT department, and 13 per cent believed that the structure of the IT department had to change in order to implement blockchain.
"The challenge for CIOs is not just finding and retaining qualified engineers, but finding enough to accommodate growth in resources as blockchain developments grow. Qualified engineers may be cautious due to the historically libertarian and maverick nature of the blockchain developer community," Furlonger said.
"Blockchain technology requires understanding of, at a fundamental level, aspects of security, law, value exchange, decentralised governance, process and commercial architectures. It therefore implies that traditional lines of business and organisation silos can no longer operate under their historical structures," he added.
The industries most likely to be involved in blockchain planning and experimentation were telecommunications, insurance and financial services, the survey found. Transportation, government and utilities sectors were among those most interested in future pilots.
The Gartner survey echoes the findings of a report by CSIRO’s Data61 research group which found adoption to still be in its infancy.
“New businesses and business models are expected to arise, but as yet there are very few examples of significant use in production of blockchain systems within industries or government,” the Data61 report states.
The Australian Securities and Investments Commission (ASIC) last year said it expects the potential uses of distributed ledger technology to grow “exponentially” over time.