A new study has revealed that most business managers in Africa do not trust the use of blockchain technology to transform their business processes.
The 2018 survey, which was conducted by PricewaterhouseCoopers (PwC), a multinational professional services network headquartered in London, United Kingdom, revealed that whereas 84 percent of the 600 organizations in 15 countries have at least some involvement with blockchain technology, 45% of their chief executives are not sure whether the technology can be trusted for business.
According to Mr. Adam Sengooba, the Associate Director of PwC Uganda, contributing to the blockchain trust gap is a lack of understanding.
“Currently, many executives are unclear on what blockchain really is and how it is changing all facets of the business. Blockchain’s role as a dual-pronged change agent as a new form of infrastructure and as a new way to digitize assets through tokens, including cryptocurrency is not easy to explain. Think about other new technologies: users can try on virtual reality goggles or watch a drone take flight. But blockchain is abstract, technical and happening behind the scenes,” he says.
“It is perhaps ironic that a technology meant to bring consensus hits a stumbling block on the early need to design rules and standards. Take payment systems and mechanisms in banking. Though everyone plays by the rules of existing systems today, they don’t necessarily agree on how an alternative blockchain-based model should be designed and operated. Majority of regulators are still coming to terms with blockchain and cryptocurrency. Many territories have begun studying and discussing the issues, particularly as they relate to financial services, but the overall regulatory environment remains unsettled,” he adds.
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However, he insists that blockchain is altering the business landscape through the use of many systems such as tokenization, the representation of real or virtual assets on a blockchain, which is spreading to raw materials, finished goods, income-producing securities, membership rights and more.
“Initial Coin Offerings (ICOs), in which a company sells a predefined number of digital tokens to the public, are funneling billions of dollars into blockchain platforms. Increasingly, an alternative to classic debt/capital funding as provided today by venture capital and private equity firms and banks, ICOs in the first five months of 2018 raised $13.7 billion,” he says.
He urges governments to begin promoting the use of blockchain technology, saying a well-designed blockchain offers transparency and traceability for many business processes.
“Enterprise software platforms that are the engine for company operations such as finance, human resources, and customer relationship management are beginning to integrate blockchain. For example, Microsoft, Oracle, SAP, and Salesforce have all announced blockchain initiatives. In the future, many core business processes will run on or inter-operate with blockchain-based systems. Using blockchain in concert with Enterprise Resource Planning (ERP) platforms will enable companies to streamline processes, facilitate data sharing and improve data integrity,” he says.
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