Gartner: Blockchain will be nothing more than an add-on for ERP, CRM software
During the next two to three years, all major ERP and CRM vendors will offer blockchain capabilities as an add-on feature for their software and SaaS products, according to a new report from Gartner.
During that same time, fragmented blockchain standards are likely to inhibit adoption of the distributed ledger technology in real-world systems by financial services firms, which have been rolling out a variety of test beds and pilot projects in recent years.
Until consortiums and standards groups come together on several industry standards, or de facto standards emerge, the use of blockchain will be limited mostly to proofs of concept and pilot tests. Gartner released its report at its IT Symposium/Xpo in Cape Town, South Africa today.
Without standards, businesses would have to support multiple blockchains and integrate them upstream into ERP and CRM systems, said Dale Kutnick, a Gartner senior vice president of research and co-author of the report.
“We’re going to have to support five different blockchains? Who’s going to pay for that?” Kutnick said. “It’s unlikely there’ll ever be just one standard, but ultimately [there will be] a couple [of] standards bodies who’ll adjudicate…. Ultimately, there will be one or two standards..,. but no more than four.
Kutnick expects one primary standard – and one or two secondary ones – to emerge. In the meantime, de facto standards are also likely to form, though that process is likely two years away. While Hyperledger Fabric has the potential to become a de facto standard because it’s being piloted in several industries, there’s no guarantee it will, he added.
As a result, companies working with the myriad of blockchain platforms available today should realize it’s “highly unlikely” the one they’re using now will become the industry standard in five years. “When standards come out, you’re going to have to convert yours,” Kutnick said.
And blockchain ledgers will need to be integrated with existing ERP, CRM, finance, and asset managment systems, Gartner warned. When SAP or Oracle announce a new version of their software, companies will have to re-integrate their blockchain platforms, according to Kutnick.
“If you’re a FedEx, Alibaba or Amazon, maybe you want to stick your hat in the ring and try [blockchain], or maybe you wait,” Kutnick said. “If you’re a user – an insurance company, a bank, or a [consumer packaged goods] company – you’re going to want to wait until your software company – Oracle, Microsoft or SAP – announce blockchain as an add-on feature for your supply chain software so you don’t have to worry about integrating it.”
All of the major software vendors will eventually offer blockchain as a feature; in fact, said Kutnick, most are already developing that kind of add-on. Likely the most complicated platform will be ERP, which won’t see a viable blockchain feature set for anther year or two, he said.
Oracle and SAP, for example, have already announced blockchain products for supply chain tracking.
The financial services industry, in particular, is still three to five years away from mature industry standards, according to Fabio Chesini, a senior research director at Gartner and co-author of the report.
Standards are critical for financial services firms because they are constantly moving assets between clients, partners and other institutions. Today, bank CIOs can choose from numerous blockchains, available using either enterprise-grade approaches such as R3 Corda, Hyperledger, and Digital Asset, or the many public blockchain standards like Bitcoin, Ethereum, Cardano, EOS and Tezos. Each standard’s consortium is trying to make theirs the de facto basis for value exchange and digital asset representation, smart contracts and decentralized applications.
