Empowering government organizations with Blockchain
Blockchain needs no introduction these days. What started out as the basis of cryptocurrency is now disrupting the way dozens of industries are operating with its capability to handle complex, multi-party transactions in a highly secure and trusted environment.
It is hence no surprise that nine in ten government organizations globally plan to invest in blockchain for use in financial transaction management, asset management, contract management and regulatory compliance by 2018. In fact, according to the blockchain study, Building Trust in Governments, by the IBM Institute for Business Value, 14 per cent of government institutions expect to have blockchain in production and at scale by 2017 while seven in ten government executives predict blockchain will significantly disrupt the area of contract management between the public and private sectors.
The level of trust and security which blockchain provides, is especially critical in the public sector where governments typically deal with highly personal and confidential citizen information. For example, blockchain can be used to register and record property transactions, preventing traders from defrauding banks. It can also be used for healthcare initiatives so as to track medical records, citizen services. On a day-to-day level, blockchain has the potential to make government tendering processes and purchases more efficient, and reduce the potential for fraud and error.
To get the most from blockchain in your organization, here are a few things to note:
Start small – While you may be inspired to define an ambitious strategy from the onset, it is usually better to start small then scale from there. A good use case should be practical, top-line oriented and have senior leadership backing. Keep in mind that if it’s too discrete, the investment will benefit only a narrow slice of the business.
Not a one-size-fits-all approach – Not all blockchain platforms are suitable for the same purposes. Some are appropriate for high value, point-to-point transactions and others for high volume transactions. Some are built on open-source platforms, others on proprietary languages that may have a limited developer base. Engage your employees, IT team and external experts, if needed to clarify your organization’s end user needs and identify the most suitable technologies to address them.
Involve your key suppliers and customers – One of the most exciting aspects of permissioned ledger environments is the network effects they create – the more participants, the greater the value. In developing this ecosystem, it’s again best to start small. Consider doing a pilot run in partnership with a trusted supplier which can help to provide proofs-of-concept and shine light on legal and process changes that need to be considered.
Blockchain is dynamic – As the technology is still advancing, it is important for teams to go into the project with an open mindset. Be prepared to adapt, refine and collaborate, and more importantly, measure and report results. Company leadership also plays a key role in setting that tone — giving teams permission to experiment and allowing them to fail fast so they may succeed faster.
Distributed ledgers like the blockchain holds tremendous potential for governments to deliver citizen engagement services more effectively. However to reach its full potential, blockchain must involve a concerted effort between the public and private sector in developing smart standards.