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How blockchain can benefit IT outsourcing providers | CIO

Earlier this month IBM and its customer Bank of Tokyo announced that they would begin piloting blockchain technology to automate business transactions between the two companies. The joint experiment is one of the first projects built on the open-source Hyperledger Project (the Linux Foundation-led blockchain platform) to explore contract management, the companies said. It’s also an early example of the benefits of using an existing IT outsourcing engagement to experiment with blockchain technology.

[ Related: How blockchain will disrupt your business ]

“There’s been a lot of internal experimentation with blockchain because companies see a lot of potential there. But it’s so complex that it’s difficult to decide where to start outside the company,” says Christine Ferrusi Ross, research vice president at services analyst firm HfS Research. “IT outsourcing contracts are a safe way to experiment with it.”

Big Blue and Bank of Tokyo say they created a smart contract prototype on a blockchain that would improve the efficiency and accountability of service-level agreements (SLAs) in multiparty business transactions like outsourcing arrangements. The bank plans to begin using it to manage contracts within its business in fiscal year 2017 while IBM and Bank of Tokyo plan to management their SLAs with the system by the end of that year.

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