8 Reasons Why Procurement Doesn’t Need Blockchain.

8 Reasons Why Procurement Doesn’t Need Blockchain.

April 26, 2021
Procurement

Blockchain is fundamentally a database, but rather than a database where one item is allowed to replace another, each change to the data is added as new record that is then chained to other records using a complex algorithm.

These records are then distributed across multiple instances, so the records aren’t held in a central database but in multiple locations, making it much, much harder to tamper with records.

In our view, blockchain is complex, requires lots of power and won’t fix your procurement data problems. Below are our 8 reasons why blockchain isn’t needed in procurement:

  1. Databases do the job just fine → In procurement we need to understand transactions, who paid what to whom, who contracted with whom and what event breached which part of a contract. All of this can be recorded in a database, we don’t need to distribute these records to be able to make them work.
  2. Version control is enough → There’s a widely used technology called Git which is used in programming to manage different versions of documents. Version control can easily be used to track changes across databases, determining who changed what and to what end.
  3. Our data is dirty, blockchain won’t fix that → The big problem in procurement is getting good data in the first place. Supplier identifiers, categorisation, parts numbers, linking spending to contracts, all of these are all data integrity issues. Putting these problems on the blockchain just means you’re going to have the same problems and a more complex environment.
  4. Complexity shouldn’t be your goal → Blockchain adds huge amounts of complexity to your project, complexity infects everything in a project from the simplicity of logins, through to conducting analysis on the data. Seriously, running a procurement project is hard enough, don’t make it harder.
  5. Blockchain solutions are expensive → setting up a service based on the blockchain is expensive. Firms selling blockchain solutions are riding a wave of hype and charging a premium for it, with relatively few developers using blockchain in their day to day work, expect to keep paying that premium.
  6. The planet deserves better → distributed ledgers require exponentially more and more computing power to manage. As the database grows larger the distribution of records also grows, more records in more places means that adding data to the chain costs more in energy and has a higher carbon footprint.
  7. You can’t outsource trust to a database → Yes, blockchain is still just a database and although blockchain does more to secure information, in the end it comes down to trust. If your supplier wants to deliver stones instead of copper, there’s no amount of blockchain tech that is going to stop that happening.
  8. Show us the examples of blockchain working → If the technology had even a tenth of the potential that many seem to think it has, surely we’d have seen some influential projects using the technology for procurement? But we can’t find any smart contracts or smart GRN projects that have succeeded. After all this time, it might be safe to say that there isn’t a good reason to use this technology.

If you’d like to know how to run a good procurement data analytics project, we’re ready and able to help here.

August 3, 2021

New Carbon Reporting To Impact 1,000 Suppliers

New rules to help reduce CO2 in public contracting show that at least 720 suppliers will be required to provide a detailed...
August 3, 2021

Trade, Policy And Procurement Meet Again.

The UK's Trade and Agriculture Commission has published its final report, along with twenty-two recommendations, one of which is to direct the...
August 3, 2021

McGowan Government Enhances Aboriginal Procurement Policy

In 2018, Western Australian Labour Premier Mark McGowan introduced a landmark Aboriginal Procurement policy. The objective of the policy was to improve...
August 3, 2021

Are Trade Agencies Becoming More Like Hedge Funds?

Trade promotion, where a country promotes its companies and products to be bought by another, has a certain image. One imagines suave...
August 3, 2021

Meeting The Research Challenge

Our clients expect us to answer tough questions. Questions like, "what's the total value of public contracting worldwide?" or, "who's the leading...
August 3, 2021

US Consults On Social Procurement

The US Government's Office of Management and Budget (OMB) has requested submissions on the "methods and leading practices" to assess whether agencies'...
August 3, 2021

Harnessing Procurement To Tackle Climate Change

As experts in procurement and open data, we are pleased to see the recent announcement that global confectionery giant Mars is harnessing...
June 29, 2021

Western Australian Govt Rolls Out New Procurement Process.

We're always pleased to see governments reviewing their procurement processes with a view to greater transparency. The Western Australian Government has recently...
June 9, 2021

Commit To Net Zero To Win Government Contracts.

....So says the Cabinet Office, with new measures released on World Environment Day that will require businesses to publish clear and credible...
June 2, 2021

Major Procurement Project For Inverness Castle

This week sees Highland Council publish the main construction and refurbishment tenders for the Inverness Castle Transformation project, through Public Contracts Scotland...
May 27, 2021

Six Considerations When Marketing To Governments.

We might say marketing to the government is similar to marketing to any other target market, particularly another B2B target market. And...
May 17, 2021

Data Mastery.

It's easy to say that you're a 'world leading' enterprise. It's much harder to back it up. But we genuinely believe that...
May 4, 2021

Recommendations For Tackling Gender Disparity For Governments

Clearly, the UK Government is a leader in the field of open data and transparency: it is this commitment to transparency as...
June 2, 2021

Does Government Business Correlate To Gender Disparity?

As part of our Procuring Inequality report, we've analysed whether winning government business equates to a gender pay disparity. By linking gender...
May 5, 2021

The Worst Performing Suppliers To Government In The Gender Pay Divide.

As our analysis of the gender pay gap within strategic suppliers to government from our Procuring Inequality report, showed a broad overlap...

Newsletter

Compelling research, insights and data directly into your inbox.

Recent media stories

Search

Scroll to Top