long chain stretching across the image

Will Blockchain Disrupt ECM or Is it Just a Lot of Hype?

7 minute read
Alexandra Lilienthal avatar

Blockchain has extended its reach beyond the alternative payment system behind token currencies like Bitcoin to a concept that some say will disrupt the entire IT landscape.

But does blockchain really represent the universal path to enhanced cost efficiency, security and autonomy? Do blockchain applications have the power to revolutionize enterprise content management (ECM) and content services?

In short, will we all soon be ‘blockchaining’ instead of managing content?

First Things First: What Is Blockchain?

Blockchains are so-called distributed ledgers that rely on internet-connected individual computers and open source software all over the world to verify individual transactions and maintain an ever-growing list of records called blocks. When each block is created, it receives a timestamp that links it to the previous block.

Because blockchains are crowd-validated, they are resistant to alterations due to a built-in consensus mechanism whereby at least 50 percent of participating computers must confirm any given block. In theory, this makes blockchain a secure, verifiable and permanent solution for transactions of any kind.

The Rapid Evolution of Blockchain’s Use Cases  

Originally implemented as the cryptographic ledger behind token currencies like Bitcoin, blockchain’s possible records management use cases are evolving rapidly. For example, Sweden’s land registry authority is currently exploring the use of blockchain as a mechanism for recording property deals.

The blockchain confirms and saves each step in the contract process between buyers and sellers, while making each deal’s information transparent to all parties such as banks and local governments.

Blockchain’s reputation as a highly secure, self-auditing ecosystem rests on two essential paradigms — anonymity and the absence of a central authority.

So, in evaluating blockchain’s potential applications to enterprise content management, it is vital to consider how — and how significantly — those principles conflict with ECM’s responsibility to ensure that information is managed in compliance with current regulatory and company policies.

4 Basic Differences Between Blockchain and ECM 

Those fundamental differences mean that ECM and blockchain currently take two very different approaches to business, not only technologically but philosophically as well. Here are four of those differences:

1. Traceability versus anonymity

An ECM system is based on traceability and the importance of creating an audit trail to comply with corporate and legislative rules. In fact, when the GDPR is implemented it will even require a traceable deletion process for personal information.

However, in a system based on the anonymity derived from a public blockchain, anonymity is the very factor designed to create data security. Yet the concept of traceability with blockchain differs significantly from the traceability inherent in ECM. That’s because in a blockchain, each saved block transaction is traceable, but cannot be attributed to any single individual.

What’s more, public blockchains do not allow for deletion or modification of any of the blocks, making the blockchain immutable but rigid. Each piece of new information must be stored in a new block, making the idea of editing or deleting content out of the question.

Looked at from an ECM point of view, a change as minimal as adding a comma would require that the entire peer-to-peer blockchain validation process be executed.

2. Data security versus public accessibility of information

The many parties involved in the verification process give blockchain its value as an open, public peer-to-peer verification tool.

But in ECM, data security and data privacy are key to keeping data leakage to a maximum. Most companies want to hold all sensitive data internally because they are very much afraid of hacking and industrial espionage.

That means that realistically, with the majority of ECM installations still run on-premises instead of in the cloud, it may simply be too early for the shift in thinking required to adopt the blockchain concept broadly at the enterprise level.

Learning Opportunities

Longer-term, the creation of so-called private blockchains may be what ultimately facilitates enterprise acceptance. Private blockchains are hybrids that can be modified to include features like access permissions and even modifications and deletions to the blockchain itself.

3. Central administration versus distributed ledgers

When running a content management solution, companies aim for data sovereignty, security and compliance. These goals typically work hand in hand with company policies that mandate the centralized administration of user and data management.

The blockchain, however, relies on a completely different concept: validation and confirmation of transactions via automated, distributed ledgers. User management, as enterprises now know it, would be impossible using blockchain, since transactions wouldn’t or couldn’t be connected to individual user profiles. 

4. Can blockchain scale?

Blockchain validates transactions using a so-called proof of work mechanism in which the nodes of a blockchain network compete to be the first to validate a block. This process, which ultimately results in blocks being condensed into a sequential chain, is extensive and time-consuming, raising the as-yet-unanswered question of whether blockchain can scale to meet the demands of large and growing databases.

By contrast, all modern ECM systems are easy to scale and can process files and data quickly. The confirmation that content has been filed, updated or deleted is right at hand in real time.

Disruptive Potential, But Still a Few Barriers

Already, some are putting blockchain in the same revolutionary category the internet occupied when it first emerged. We believe blockchain has a similar potential to disrupt software offerings, but at the same time, we believe blockchain’s potential to revolutionize ECM will translate to different use cases in different ways.

For example, let’s look at the classical archive approaches: For those, blockchain currently looks like the less efficient option because any extensive number of files, documents and data simply slow down the blockchain and make archiving scenarios too slow to deliver seamless and user-friendly solutions.

It’s also important to realize that even if ECM users wanted to, it’s not currently possible to shift all data and content to blockchain: it simply doesn’t have the capacity yet. In fact, at the moment, blockchains can only carry out transactions of representations.

To dramatically expand blockchain’s applicability to such fields as logistics and insurance, blockchain must be able to handle scenarios that involve multiple players and different confirmation and validation levels at the scale of large data volumes.

Our Vision for a Blockchain-Enriched ECM Platform 

Although blockchain does not currently comply with many of enterprise content management’s fundamental requirements, I see future opportunities to enhance ECM with blockchain concepts that can serve both user and governance needs.

Our vision of a blockchain-enriched enterprise content platform would incorporate the following:

  • A secure and compliant system that protects data, respects individual privacy and empowers companies by creating anonymized, verified and self-managed ‘profiles’ for employees, customers and suppliers
  • A private blockchain approach that complies with rules and regulations but offers more flexible editing and deletion policies where needed
  • An increasing emphasis on creating and utilizing smart contracts — standardized contracts that have defined rules and penalties but can be automatically enforced without the need for lawyers — for standard agreements
  • Automated payment processes, that use Bitcoin or similar digital payment systems to pay on delivery once certain action or transaction items have been fulfilled.

The Future of Blockchain and ECM

Implementing these features can pave the way toward incorporating blockchain into existing content services and fostering further ECM innovations. Continuing to search for ways to merge the strengths of blockchain and the flexibility of ECM will offer future value to all participants.

About the author

Alexandra Lilienthal

Based out of Berlin, Alexandra heads the international communication team of the ‎SER Group, Europe’s leading ECM vendor. In addition to her content and process management knowledge, she has also worked in online marketing for many years now.

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