3 I’s to adopt blockchain

By Bhanu Narayana posted Feb 21,2018 11:10 AM


The pace of technology change is staggering. While agencies were still trying to figure out how to deal with Cloud and Analytics, along come AI and Blockchain to make lives more interesting!

There is a lot of discussion around Blockchain - World Economic Forum estimates that by 2027, 10% of global gross domestic product will be stored on blockchain technology. And, lot of action as well - Gartner estimates that blockchain-based business will be worth $10 Billion by 2022.

Almost every other industry is piloting blockchain initiatives - manufacturing and retail organizations are piloting blockchain for supply chain and inventory management, healthcare and insurance are piloting blockchain for health record management and claims management. Even the public sector is not behind.

According to a study -  9 of 10 government leaders worldwide may start using blockchain by 2020. There are many who have already started. We have seen pilots by agencies across the world for – antifraud, welfare and pension payments, identity management, land records management, and voting among others.

Blockchain is demonstrating so much interest because of its potential benefits - efficiency, effectiveness, and security etc.

Organizations adopting blockchain move to a distributed model where they can easily maintain a single version of the data, automate transactions, improve tracking and become more efficient even while reducing cost of operations – all the benefits which agencies have always desired but not been able to achieve.

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Blockchain can be a useful technology to reshape service delivery. But, it’s not the answer to everything.

Just like any other technology, blockchain is useful if adopted for a certain set of tasks/processes and in the right way. This is my advice: agencies looking to adopt blockchain should focus on these 3 I’s:

  1. Identify suitable processes
  2. Identify the right solution
  3. Identify all the cost elements that should be factored to calculate accurate ROI


Identify suitable processes

Blockchain is suitable for only those processes that meet the criteria below.

  • Involve multiple parties/agencies that share control of the data and need assurance that data is valid/consistent
  • Use data which is vulnerable to risk/tampering
  • Rely on a central authority for processing the transaction
  • Involve a number of intermediaries which would make the process complex and/or costly
  • Use a complex or unreliable reconciliation process


Identify the right solution

The next step is to analyze if blockchain is the right solution. Agencies should assess if a blockchain is really needed or would a traditional ledger suffice? If blockchain is needed, then would a private ledger make sense or a public one? Should it be permissioned or un-permissioned? And so on.

There are a couple of frameworks that agencies can use to identify the right type of blockchain solution. One such framework is outlined below.
adopt_blockchain_2.pngIdentification of all the cost elements

Adoption of blockchain would involve costs – both direct and indirect.

Blockchain technology is new and there are multiple players offering blockchain platforms. Interoperability is difficult and there is still no clarity how these platforms/solutions would evolve. Since blockchain is a network, a lot of effort would have to be spent on getting the governance right. And then there will be a shift in the delivery model - from centralized to distributed–  which will require significant change management & training of staff.

In addition to the direct costs – people, software-hardware - all these factors would contribute to the cost of blockchain adoption. While it’ll not be easy, agencies would need to estimate all these costs to calculate accurate ROI from blockchain investment.



While blockchain is new and many may consider it to be a fad, I believe it’s here to stay and can transform the way agencies operate. If adopted for the right processes and in the right way, it can generate significant benefits.

Blockchain’s adoption will pick up. And, since every other industry is still trying to wrap their heads around this technology, it’s a great opportunity for the public sector to take the lead, establish standards, and show how blockchain can be adopted successfully.