Smart Contracts to Significantly Improve Data Quality Says Gartner Research

As the blockchain technology is making massive inroads in different business applications, organizations are getting more inclined on using smart contract facilities to automate their workflows while snoring utmost transparency.

In the latest research conducted by Gartner Inc., it predicts that businesses and organizations using blockchain-based smart contracts will see nearly 50% improvement in the data quality just by 2023.

Lydia Clougherty Jones, senior research director at Gartner, said: “When an organization adopts blockchain smart contracts, whether externally imposed or voluntarily adopted, they benefit from the associated increase in data quality”.  

But the research report authors also state that since blockchain is likely to replace traditional business processes, the availability of data could likely decline during the same period. It notes that smart contracts will eliminate all other data coming from third-party resources as they would possibly remove those third-parties entirely from the transaction equation.

Jones further added that “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”.

In its report, Gartner also says that smart contracts technology is very much in its early stage. Furthermore, since it has been difficult in connecting traditional database platforms with blockchain platforms, organizations have been a bit slow in adopting smart contract solutions.

But it adds that the net impact for data and analytics return on investment will stay positive. It says that the adoption of blockchain-based smart contracts will have a significant improvement in the decision-making processes of the enterprises.

Besides, the automated verification will also ensure that the data quality is more pure. Since smart contracts eliminate all the intermediaries, the code of the contract becomes supreme.

“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,” the report reads.

To begin with using smart contracts, Gartner advises that organizations should first experiment with non-sensitive data distributions or any basic contracts information for management purposes. If successful, they can further automate contracts with multiple parties within a particular ecosystem like finance, banking, insurance, real estate, etc.