Gartner says blockchain smart contracts will positively impact data analysis
SMART CONTRACTS are blockchain-based self-executing contracts and possess the same characteristics as the technology framework they’re built on including transparency, traceability, and immutability.
Gartner’s most recent forecast points out that there’s incredible value in smart contracts and that businesses should consider leveraging them to improve their data quality and data analysis tools.
The novel idea is already being deployed in several industries including real estate and healthcare, and there are chances that adoption will skyrocket as smart cities are developed by municipal organizations across the Asia Pacific.
“When an organization adopts blockchain smart contracts — whether externally imposed or voluntarily adopted — they benefit from the associated increase in data quality, which will increase by 50 percent by 2023,” said Gartner Senior Research Director Lydia Clougherty Jones.
However, Gartner warns that organizations need to pay attention to the fact that governance frameworks for blockchain participation (terms and conditions of smart contracts) often determine the availability of the data from resulting transactions and can range from ‘none’ to ‘limited’ to ‘unlimited’.
“This variable could leave participants in a worse position than if they did not participate in the blockchain smart contract process. As such, an organization’s overall data asset availability would decrease by 30 percent by 2023.”
Despite the reduction in data assets, the analyst firm believes that the net impact will be positive for data quality and data analysis.
According to Gartner, the impact of blockchain smart contract adoption on analytical decision making is profound. It enhances transparency, speed, and granularity of decision making.
It also improves the quality of decision making, as its continuous verification makes the data more accurate, reliable and trustworthy.
Senior Research Director Clougherty Jones believes that smart contracts are important and that data and analytics leaders should focus on them because they promise a near certainty of trusted exchange.
“Once deployed, blockchain smart contracts are immutable and irrevocable through nonmodifiable code, which enforces a binding commitment to do or not do something in the future.
“Moreover, they eliminate third-party intermediaries (e.g., bankers, escrow agents, and lawyers) and their fees, as smart contracts perform the intermediary functions automatically.”
Gartner’s analysts believe that organizations should start piloting smart contracts to automate simple business processes such as non-sensitive data distributions and simple contract formation for contract performance and management purposes.
Next, organizations should engage with their affiliates and partners to expand their pilot and attempt to automate multiparty contracts within a well-defined ecosystem, such as banking and finance, real estate, insurance, utilities, and entertainment.
In the Asia Pacific, countries such as Singapore and Australia are already looking into deploying smart contracts at scale — but other countries in the region and around the globe need to give the technology a thought if they want to improve efficiency and improve their data quality as well as analysis capabilities.