8 Reasons Why Procurement Doesn’t Need Blockchain.

8 Reasons Why Procurement Doesn’t Need Blockchain.

May 11, 2022
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.

September 8, 2022

UK Risks Its Place On Anti-Corruption Body

The UK has been placed ‘under review’ by the 77-country-strong Open Government Partnership (OGP) due to its failure to meet mandatory criteria...
September 8, 2022

Thurrock Exposes Transparency Blind Spot

An investigation by The Bureau of Investigative Journalism (TBIJ) into investments by Thurrock Borough Council has led to the resignation of the...
September 6, 2022

New Zealand Government Reviewing Procurement System.

It’s always encouraging when we see governments around the world looking to improve their procurement transparency and efficiency. The New Zealand Government...
September 1, 2022

Collecting Data For Sustainable Procurement In Construction

Over the last few weeks we have been looking at setting a sustainable procurement framework in the construction industry, and what kind...
August 30, 2022

Selecting Data For Sustainable Procurement In Construction

It is estimated that around 40-50% of natural resources are transformed into construction material, and that as much as 30% of all...
August 25, 2022

Setting A Sustainable Procurement Framework For Construction

When procuring construction projects, it can be useful to underpin sustainability criteria on existing policy and regulation. When assessing the enabling framework,...
August 18, 2022

Big Net Zero Contract Win For Small Cornish Business

A small Cornish company has purportedly won a £70bn contract to help deliver the country's transition to Net Zero. The Penzance based...
August 16, 2022

Supporting Sustainable Procurement In ICT

One of the key challenges of sustainably procuring ICT lies in the lack of transparency in supply chains. To overcome this challenge,...
August 11, 2022

Why Is Sustainable Procurement Important For The ICT Sector?

The extraction of raw materials, manufacturing, transportation, use, and disposal of ICT products is associated with a number of environmental, social, and...
August 10, 2022

Shifts Towards Sustainable Sourcing

A while ago,  we shared an article on findings by the Boston Consulting Group and the World Economic Forum that showed procurement is responsible...
August 9, 2022

Supporting Sustainable Procurement In The Construction Industry

Construction projects are usually long and complex, involving the participation of different stakeholders throughout the different project stages. There are certain factors...
August 4, 2022

Why Is Open SPP Important In The Construction Sector?

The construction industry is estimated to account for 6% of global GDP, with Africa's construction market valued at around USD 5.4 billion...
August 2, 2022

US Advances Equity And Economic Opportunity Through Procurement.

With the implementation of the Bipartisan Infrastructure Law, the Biden-Harris Administration set an objective to ensure federal investments built wealth and opportunity...
July 28, 2022

5 Reasons To Export To Government

If you want to grow exports, you should start with the largest and most transparent industry in the world, and here are...
July 26, 2022

Sustainable Public Procurement and Economic Development

What is it? For many industries contracting has become a global affair. Governments are rightly keen to gain economic advantages from a...

Newsletter

Compelling research, insights and data directly into your inbox.

Recent media stories

The Times
May 30, 2022
CIPFA
August 3, 2021

Search

Scroll to Top