How crucial may application of blockchain be for IT outsourcing providers?
Summing up the 2016 trends, IT Outsourcing Review team couldn’t omit mentioning blockchain as one of the most crucial tendencies. It promises to help immediately reveal any money laundering, tax evasion, agreement breach, improved money fund management, etc.
Is blockchain really disrupting the business sphere?
Blockchain popularization is directly related to the cybersecurity growing concerns, since, both state and private organizations seek for the best solution to prevent information leaks. However, the technology supporters claim blockchain to make the Internet more secure and reliable. Along with that, it aims at evolving the existing financial systems, namely, banking institutions, into more advanced and less bureaucratized ones. Yet, some experts wouldn’t advise relying much on it: the technology has been vacillating so far and requires serious improvements before it can go wide.
To clarify the issue, first of all, one should consider the essence of blockchain and its purpose for different industries. We will view it from different angles. So, what is so special about the technology that makes it's widespread. Blockchain suggests a great method for data recording, so-called, digital ledger, therefore, a company or an institution working with finances, contracts, various transactions, or anything that is subject to record can have constant but safe control over the data. All the information is stored in the virtual cloud and is accessible for a limited number of people with rights to enter the data or download them. Only a person in charge can grant certain access to the ledger or block it, meaning that all the changes made to any piece of information can be immediately tracked as well as any suspicious action can be immediately blocked.
Blockchain for IT outsourcing services providers: a new way of information security or another headache?
Since, one of the most heatedly discussed and controversial issues arising in IT outsourcing industry is how much the data is protected when some portion of it is submitted to a third party providing data processing or other services. Sad but true, NDAs are no longer 100% guarantee. With blockchain implementation, the level of risks related to data control is decreasing substantially. As the technology prevents from altering or removing any data from the given database, it significantly increases the level of trust to an outsourcing services providers. However, this shouldn’t necessarily mean that none of the data can be edited or amended. Often it just should be, and, then, under purely legal and mandatory requirement. In such a case tracking and data verification is a must-be of such procedures. To secure the information from the inside leak in terms of frauds or errors, many ledgers can use the record type that cannot be changed ones it is made, as well as it cannot be relocated or removed. Therefore, all the participants with access to such ledger are able to check and track all the changes.
IT companies can directly share the information with their customers without sending any important piece of data or information via e-mails or other messengers, since it may not be secure. With blockchain in the sleeve, it’s becoming less risky. It’s also a great chance to avoid any third party involved to work as the need for a data storage service provides is most likely to eliminate in the nearest future. As soon as blockchain is implemented into one's business, any portion of information is immediately embedded into it; therefore, a computer will record and keep everything necessary and accessible. With IT outsourcing companies this approach is making life even easier: ones you get the payment for a certain service, the blockchain immediately arranges all the documentation, invoices, etc. and informs the customer of the transaction. No human factor can influence the process, hence, no fraud on that side can occur.
Automated transactions and approvals within the blockchain substantially decrease the risk of human mistake as the intervention is minimized. Such security steps are very likely to become widespread and commercial transaction in IT outsourcing business will gain a lot from it.