Business Solution

Is Blockchain The Solution For Your Business’s Data Needs?

Shruthi Rao is the cofounder and Chief Business Officer at Vendia, a multi-cloud data-sharing startup. She is a mother to 4 boys & 2 dogs.

Being able to track data is increasingly important for today’s industries. For example, if car manufacturers can’t communicate with their partners in real time, they will struggle to ship cars faster and more cost-effectively. Airlines will not be able to give their passengers the best itineraries at the best price if they don’t have access to the latest information on sales channels and available seats. And coffee providers can’t view the source of their beans and communicate with sellers without accurate supply chain tracking.

Problems across data silos, real-time partner communication and supply chain tracking are just a few examples of where organizations struggle to manage and interpret the ever-increasing volume of data needed to run a business effectively.

On paper, blockchain appears to be the perfect solution to these data problems. In fact, a recent survey from Deloitte found that 86% of executives believe there’s huge business potential in blockchain technology. The perceived value of blockchain comes from its ability to share data quickly and securely in a decentralized manner. And while the promise of blockchain for businesses is exhilarating, the implementation is excruciating. Companies that turn to traditional blockchain solutions quickly face a whole new set of problems across integration, scalability and overall performance. Here are the top three reasons why I think blockchain is not necessarily the solution for all businesses looking to streamline data.

The technologies don’t align.

Enterprise blockchain applications require integration with other enterprise systems to work. This means that legacy systems, applications and data sets need to integrate seamlessly, which is a big problem if you and your partners are using different providers. If the tech stacks don’t perfectly align, the technology’s consistency, user experience and overall performance are severely limited. This creates an entirely new set of silos and data problems. That means that if your business uses AWS and your partner uses Azure, it will be impossible to exchange data and communications across the blockchain solution. That then puts you in the very difficult position of trying to convince your partners, which are often many, to change cloud providers.

It’s difficult to implement.

Because of the misalignment in tech stacks, IT teams are immediately forced into problem-solving mode just to get their blockchain technology up and running. It takes an average of six to 12 months and hundreds of thousands of dollars just to set up the initial blockchain infrastructure for most businesses. And if ever they get into production, most traditional blockchains require specialized developers to maintain and manage, which most companies don’t have. This long and expensive process is where most companies decide the effort required just to get this solution started isn’t worth it.

It’s expensive.

The cost of deploying blockchain technology in a business can be huge. It does not apply to only the human power required in hiring consultants and specialists that understand the technology but also the hardware and technical resources that come with implementing the technology into your business’s existing systems. Companies are also on the hook for paying for their partners to restructure their tech stacks if they don’t already.

I’m here to tell you that most enterprise companies don’t have blockchain problems; they have data problems. And when it comes to implementing a solution, you can find ways that work with the technology and systems you and your partners already have in place.

Alternatives

Instead of implementing traditional blockchain technology as a catch-all to solving your data sharing challenges, I believe businesses should take an alternative approach offered by systems like next-gen blockchains and serverless distributed ledgers.

These modern technologies are already proven to help organizations securely share data across multiple partners—as seen in supply chain tracking use cases, financial settlement scenarios and partner data exchanges.

When considering solutions for managing your company data across parties and providers, successful companies can win by:

• Outlining the business problem you are trying to solve and working backward. Not all types of blockchain solutions make sense for the data-sharing challenges your business may be experiencing.

• Making sure the data sharing solution you plan to implement works with your existing tech stack and allows for flexibility.

• Ensuring that you have the internal support to implement and manage any new technology or solutions you bring on. You shouldn’t have to hire specialists or consultants just because of blockchain technology.

Final Thoughts

When it comes to solving data problems, businesses should feel encouraged by the number of technology solutions available to them today. By taking the steps outlined above, business leaders will be able to not only find the most effective solution for their particular business needs but also ensure it’s the most efficient and cost-effective method to support their business goals.


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https://www.forbes.com/sites/forbesbusinesscouncil/2022/08/05/is-blockchain-the-solution-for-your-businesss-data-needs/

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