Harnessing the Potential of Blockchain and AI for Process Performance Management With COBIT

Blockchain technology and artificial intelligence (AI) are two of the most significant technological advancements of the 21^st century. These technologies have the potential to revolutionize various industries and have already begun to impact the way enterprises operate. Process performance measurement is a crucial aspect of any organization’s success. It enables the organization to assess its performance and identify areas for improvement.

The combination of blockchain and AI can offer new and innovative solutions for process performance management. Integrating their implementation while incorporating them into existing COBIT^® practices allows for greater efficiency, transparency and security and for better governance over these new technologies.

Blockchain offers a secure and transparent way of managing IT transactions, and AI can automate routine IT processes, improve decision-making and predict potential IT risk. The integration of blockchain and AI processes into COBIT practices can help organizations optimize the COBIT framework for greater efficiency and effectiveness while simultaneously implementing those technologies. However, the integration should be approached with caution, and a clear understanding of the potential risk and challenges is necessary.

Use of Blockchain in Process Performance Management

Blockchain technology is a decentralized and secure platform for data storage and transactions. It operates on a distributed ledger system that ensures the accuracy and reliability of data, making it ideal for use in process performance management.

Key ways blockchain can be utilized in process performance management include:

• Supply chain management—Blockchain technology can be used to create a transparent and secure supply chain system. It allows for real-time tracking of products, reducing the time and effort required to manage the supply chain.
• Payment and contract management—Blockchain technology can be used to automate payment and contract management processes. This eliminates the need for intermediaries and reduces the risk of fraud and error.
• Quality control—Blockchain technology can be used to store quality control data, such as test results and production processes, providing a permanent and secure record of the process.
• Performance monitoring—Blockchain technology can be used to monitor the performance of employees, suppliers and other stakeholders in real time, allowing for immediate action to be taken in case of any deviations.

The combination of these technologies is expected to greatly enhance the performance of various processes and applications in diverse sectors.

Use of AI in Process Performance Management

AI algorithms can be used to automate processes, analyze data and make predictions, making it ideal for use in process performance management.

Key ways AI can be utilized in process performance management include:

• Predictive analytics—AI algorithms can be used to analyze data and make predictions about future performance, enabling enterprises to plan and make informed decisions.
• Process automation—AI algorithms can be used to automate repetitive and manual tasks, freeing up time and resources for more strategic activities.
• Decision-making—AI algorithms can be used to support decision-making processes by providing real time data and insights, enabling organizations to make data-driven decisions.
• Performance monitoring—AI algorithms can be used to monitor performance in real time, detecting deviations and taking corrective actions automatically.

The Power of Integrating Blockchain and AI

Blockchain and AI are complementary. The combination of these technologies is expected to greatly enhance the performance of various processes and applications in diverse sectors such as healthcare, delivery, agriculture, production, property management and real estate.¹ For example:

• In the financial industry, blockchain and AI can be used together to improve the speed and accuracy of financial transactions, reducing the risk of fraud and increasing the efficiency of the transaction process. AI algorithms can be used to automate the process of verifying transactions on the blockchain, reducing the time required to complete the process and improving accuracy.
• In any industry, the combination of blockchain and AI can provide real time visibility into the entire supply chain, from the production of goods to delivery to the customer.² AI algorithms can be used to analyze data from the blockchain to identify bottlenecks and potential issues, allowing for proactive management of the supply chain and improvement of the overall process performance.
• In the healthcare industry, blockchain and AI can be used to securely store and manage patient data, reducing the risk of data breaches and improving the accuracy of medical diagnoses and treatments.³ AI algorithms can be used to analyze data from electronic health records stored on the blockchain, providing healthcare practitioners with a more complete picture of a patient’s health and enabling more personalized treatment plans.
• Smart contracts are self-executing contracts wherein the terms of the agreement between buyer and seller are written directly into code. Implementing smart contracts can automate payment and contract management processes, reducing the time and effort required to manage these processes. AI and blockchain can help with smart contracts by automating contract execution, ensuring security and transparency and enhancing dispute resolution. AI can analyze and interpret complex contract terms, while blockchain’s decentralized nature enables secure, tamper-proof storage and execution of smart contracts.⁴
• A decentralized platform that integrates blockchain and AI can provide enterprises with a secure and transparent environment for process performance management.⁵ This platform can enable organizations to monitor performance in real-time, making it easier to identify and address issues.
• Machine learning (ML) algorithms can be used to analyze data and make predictions about future performance. This can help enterprises identify trends and patterns, making it easier to make informed decisions. Blockchain can work with ML by providing a decentralized, secure and transparent platform for data storage, sharing and management as well as enabling decentralized training of ML models. This can lead to improved collaboration, data privacy and model ownership in various ML applications.^{6, 7}

Blockchain technology and AI have the potential to greatly enhance the speed, efficiency and accuracy of process performance management with the aid of COBIT.⁸

However, it is important to note that the integration of blockchain and AI into a framework such as COBIT requires a thorough understanding of the underlying technology, the COBIT framework and the ability to apply it effectively. This involves a combination of technical knowledge and practical experience and the ability to interpret and make use of technical data and information.

Potential issues and bottlenecks resulting from inadequate framework application must be addressed to ensure successful implementation.

Challenges With Applying Frameworks

Frameworks such as COBIT play a crucial role in process performance management by providing guidance, best practices and standardized processes to effectively manage and govern IT projects. Process performance management facilitates the implementation and monitoring of frameworks such as COBIT to ensure that projects align with organizational goals and objectives. Hence, process performance management, in turn, aids in implementing and monitoring the framework effectively.⁹

Many organizations have already adopted COBIT and similar frameworks; therefore, before introducing another framework, it is advisable to utilize the existing work. If COBIT is already implemented, it should be referred to when establishing practices for AI and blockchain. For those yet to implement COBIT or other frameworks, it is important to have a robust set of rules for governing and managing these new technologies, and COBIT offers a blueprint for that. However, potential issues and bottlenecks resulting from inadequate framework application must be addressed to ensure successful implementation. Organizations should carefully consider these challenges and develop strategies customized to COBIT for effectively implementing the necessary processes for blockchain and AI.

Lack of Flexibility
One of the primary issues associated with the application and attempted customization of major frameworks is their lack of flexibility. Frameworks are typically designed to meet the needs of a wide range of organizations, which can make them less effective for specific organizations with unique requirements.¹⁰ For example, a complex framework that is particularly useful for the financial industry may not be suitable for a healthcare organization, as the latter may be required to meet a different set of regulations and compliance requirements.

Complexity
Another issue that may arise from certain frameworks is their complexity. Some frameworks can be difficult to understand and implement, especially for organizations that have limited experience with implementing frameworks. This could lead to problems such as incorrect implementation, lack of compliance and overall poor organizational performance.

Cost
The cost of implementing and customizing major frameworks can also be a significant barrier to enterprises. Organizations may have to invest significant amounts of time and resources to ensure that they have the necessary personnel, tools and infrastructure to implement a framework effectively. This can make the process of implementation difficult and time-consuming, which can negatively impact the overall performance of the organization.

Resistance to Change
Resistance to change can be a significant issue when integrating frameworks with management and governance processes. Employees and stakeholders may be resistant to the changes introduced by the framework, as they may feel that the new processes and procedures are too complicated or disruptive to their work. This can make the implementation process difficult, as employees may not be willing to change their work processes to align with the framework.

The integration of blockchain and AI technologies can introduce several significant improvements to the implementation of the COBIT framework within an organization.

Achieving Effective and Efficient Process Performance Measurement With COBIT

COBIT provides a common set of practices, control objectives and metrics to ensure the effective and efficient measurement of process performance. It defines a number of key performance indicators (KPIs) that organizations can use to assess the performance of their IT processes. These KPIs include service levels, cost-effectiveness, operational efficiency, risk management and customer satisfaction.

General solutions to the challenges of implementing new technology while ensuring adequate governance and management practices include several steps:

1. Develop a clear understanding of COBIT and its domains—To effectively measure process performance using COBIT, it is essential to understand the framework and its domains. This requires a thorough review of the COBIT framework, its activities and metrics, and its objective-specific practices.
2. Assess the current state of process performance—The next step is to assess the current state of process performance within the organization. This includes a review of the current IT processes, their performance and the associated KPIs.
3. Implement COBIT-based KPIs—After the current state of process performance has been assessed, the next step is to implement COBIT-based KPIs. This involves selecting the relevant KPIs for each IT process, defining the performance targets and setting up the necessary measurement and reporting processes.
4. Monitor process performance—Regular monitoring of process performance is essential to ensure that the KPIs are met and that any areas of improvement are identified and addressed. This requires regular reporting and analysis of process performance data and the identification of trends and patterns.
5. Continuously improve process performance—The objective is to continuously improve process performance. This involves the identification of areas for improvement, the implementation of corrective actions, and the regular monitoring of process performance to ensure that the improvements are sustained.

Effective and efficient process performance measurement is a critical aspect of IT governance and management. COBIT provides a comprehensive and systematic approach to process performance measurement, which enables organizations to assess their performance, identify areas for improvement, and continuously improve their IT processes.

Integrating Blockchain and AI Into COBIT

With the advent of blockchain technology and AI, there is a need to optimize the COBIT framework for greater efficiency and effectiveness.

Blockchain can be used to enhance the COBIT framework by providing a secure and transparent way of managing and tracking IT processes. The distributed ledger technology of blockchain can be used to maintain a secure and tamper-proof record of all IT transactions. Additionally, blockchain can help streamline IT processes by reducing the time and resources required for manual data reconciliation.

AI can be used to automate routine IT processes. For example, AI can be used to identify patterns and anomalies in IT data, which can then be used to trigger automated actions such as adjusting IT processes to respond to changes in demand. AI can also be used to predict potential sources of IT risk (e.g., system failures) and trigger preventive actions to mitigate the risk.

Another way that AI can be used to complement the COBIT framework is to enhance decision-making in IT governance. AI, with verified and well-tuned algorithms, can be used to analyze large amounts of data, such as IT performance metrics, and provide insights into the performance of IT processes. This can help organizations make informed decisions about how to optimize IT processes and manage risk, freeing up resources for more critical activities.

The integration of blockchain and AI technologies can introduce several significant improvements to the implementation of the COBIT framework within an organization, for example:

• Blockchain technology processes can be accounted for during a COBIT framework assessment to provide a secure, transparent and decentralized system for information storage and sharing. This can ensure that the information is tamper-proof and that all changes to the data are recorded and tracked, making it easier to identify and resolve any issues.
• AI algorithms can be used to analyze the data generated pursuant to COBIT and provide insights and predictions about the system’s performance, security and risk. This can help organizations make better decisions about their technology-related risk and respond to them more quickly.
• Blockchain and AI technologies can be integrated into the measurements needed by the COBIT framework to automate and streamline various processes, such as risk assessment, risk management and auditing. This can help organizations reduce manual work and increase efficiency.
• The integration of blockchain and AI can also enhance the reliability and accuracy of COBIT’s governance and management reporting and data analysis capabilities. This can help organizations better understand their technology-related risk and make informed decisions.

By providing improved transparency, security and automation, blockchain and AI can help organizations optimize IT processes, reduce risk, and make informed decisions about IT governance.

It is important to note that the integration should be approached with caution and with a clear understanding of the potential risk and challenges.

Organizations must be aware of the limitations of blockchain and AI to overcome them to effectively measure performance and achieve performance goals and objectives using the COBIT framework.

However, the potential benefits of integrating an AI or blockchain with COBIT outweigh the risk, making it a worthwhile pursuit for organizations looking to harness the power of these innovative technologies for process improvement.

A few reasons the integration of COBIT with blockchain and AI is worth pursuing, despite the challenges, include:

• Enhanced governance and compliance—COBIT provides a structured and comprehensive framework for IT governance and management, which can help organizations effectively manage blockchain and AI technologies. The integration of COBIT ensures that these technologies are aligned with business goals, comply with relevant regulations, and adhere to risk management best practices, which leads to improved governance and compliance.
• Optimized resource utilization—The combination of COBIT, blockchain and AI enables organizations to optimize resource utilization and streamline processes. By leveraging AI-driven analytics and automation within a COBIT-based framework, organizations can make data-driven decisions, improve the efficiency of their operations, and reduce costs.
• Improved security and trust—Blockchain technology is known for its decentralized and secure nature, which can enhance the security and trust aspects of various processes. When coupled with COBIT, organizations can create secure and transparent systems that are resistant to tampering and fraud. This increased trust can lead to better business relationships and potentially create new market opportunities.
• Innovation and competitive advantage—By embracing the implementation of COBIT with blockchain and AI technologies, organizations can position themselves at the forefront of innovation. This allows them to adapt to rapidly changing business environments, gain a competitive edge and create new revenue streams by offering innovative products and services.
• Scalability and flexibility—Implementing COBIT with blockchain and AI, (or conversely, implementing blockchain and AI practices into an existing COBIT implementation in an enterprise) allows organizations to scale their operations and adapt to changing requirements more easily. These technologies can help organizations meet the growing demands of their businesses while also remaining agile and responsive to new challenges and opportunities.

Conclusion

While COBIT provides a comprehensive set of guidelines and standards for the management of IT processes, blockchain and AI technology have the potential to greatly enhance the effectiveness of the COBIT framework for IT process performance management. By providing improved transparency, security and automation, blockchain and AI can help organizations optimize IT processes, reduce risk, and make informed decisions about IT governance. To effectively and efficiently implement these technologies, organizations must carefully consider specific use cases, design their solutions accordingly, and use the COBIT framework to help govern and manage AI and blockchain practices.

It is important to note that although blockchain and AI have the potential to enhance process performance, their alignment with the COBIT framework must be done carefully. Organizations must consider the potential risk and challenges associated with these technologies, such as data privacy and security concerns, and take appropriate measures to address them.

Although integrating a framework such as COBIT with blockchain and AI technologies presents some challenges, the potential benefits are significant. By effectively harnessing the power of these emerging technologies, organizations can achieve improved governance, compliance, security and efficiency, while also fostering innovation and maintaining a competitive advantage—assuming they look beyond a simple implementation and consider the larger enterprise when these technologies are implemented.

Endnotes

¹ Salah, K.; M. H. U. Rehman; N. Nizamuddin; A. Al-Fuqaha; “Blockchain for AI: Review and Open Research Challenges,” IEEE Access, vol. 7, 2019, p. 10127–10149, http://ieeexplore.ieee.org/document/8598784
² Choo, K.-K. R.; A. Dehghantanha; R. M. Parizi (Eds.); Blockchain Cybersecurity, Trust and Privacy, Springer, USA, 2020, p. 147–160, http://link.springer.com/book/10.1007/978-3-030-38181-3
³ Lee, D. K. C. (Ed.); Artificial Intelligence, Data and Blockchain in a Digital Economy,” Singapore University of Social Sciences World Scientific Future Economy Series, Singapore, 2020
⁴ Zheng, Z.; S. Xie; H. Dai; X. Chen; H. Wang; “An Overview of Blockchain Technology: Architecture, Consensus, and Future Trends,” 2017 IEEE International Congress on Big Data, USA, 2017, doi: 10.1109/BigDataCongress.2017.85
⁵ Vincent, C.; A. Emrouznejad; T. Gherman; “A Critical Analysis of the Integration of Blockchain and Artificial Intelligence for Supply Chain,” Annals of Operations Research, 2023, p. 1–41, http://link.springer.com/article/10.1007/s10479-023-05169-w
⁶ Op cit Zheng et al.
⁷ Huh, S.; S. Cho; S. Kim; “Managing IoT Devices Using Blockchain Platform,” 2017 19^th International Conference on Advanced Communication Technology (ICACT), 2017, http://doi.org/10.23919/ICACT.2017.7890178
⁸ ISACA^®, COBIT 2019 Framework: Introduction and Methodology, USA, 2019, http://store.hwfj-art.com/s/store#/store/browse/detail/a2S4w000004Ko9cEAC
⁹ Ibid.
¹⁰ Galliers, R. D.; W. Currie (Eds.); The Oxford Handbook of Management Information Systems: Critical Perspectives and New Directions, Oxford University Press, United Kingdom, 2011

AHMET EFE | PH.D., CISA, CRISC, PMP

Is a senior field auditor at the International Federation of Red Cross and Red Crescent (IFRC), based in Ankara, Turkey. Efe has extensive experience working in internal audit and logistics coordination for various organizations, including the Turkey Ministry of Agriculture and Forestry and the Ankara Development Agency. He is also a part-time lecturer at several universities and has published many academic articles. Efe is a member of ISACA^®, The Institute of Internal Auditors (The IIA) and the Project Management Institute (PMI).