Viewing offline content

Limited functionality available

Dismiss
Deloitte UK
  • Services

    Highlights

    • CFO Advisory

      Bringing together the best of Deloitte to support CFOs. Whether developing skills or navigating business challenges, CFO Advisory can support.

    • Deloitte Ventures

      Connecting our clients to emerging start-ups, leading technology players and a whole raft of new Deloitte talent.

    • Towards net zero together

      Discover the people leading the change and what could be possible for your business.

    • Audit & Assurance

      • Audit
      • Audit - IASPlus
      • Assurance
    • Consulting

      • Core Business Operations
      • Customer and Marketing
      • Enterprise Technology & Performance
      • Human Capital
      • Strategy, Analytics and M&A
    • Financial Advisory

      • Mergers & Acquisitions
      • Performance Improvement
    • Legal

      • Legal Advisory
      • Legal Managed Services
      • Legal Management Consulting
    • Deloitte Private

      • Family Enterprises
      • Private Equity
      • Emerging Growth
      • Family Office
    • Risk Advisory

      • Accounting and Internal Controls
      • Cyber and Strategic Risk
      • Regulatory and Legal
    • Tax

      • Global Business Tax Services
      • Indirect Tax
      • Global Employer Services
  • Industries

    Highlights

    • Ecosystems & Alliances

      An engine to embrace and harness disruptive change

    • Resilience Reimagined

      Resilient organisations thrive before, during and after adversity. How will you become more resilient?

    • Consumer

      • Automotive
      • Consumer Products
      • Retail, Wholesale & Distribution
      • Transportation, Hospitality & Services
    • Energy, Resources & Industrials

      • Industrial Products & Construction
      • Mining & Metals
      • Energy & Chemicals
      • Power, Utilities & Renewables
      • Future of Energy
    • Financial Services

      • Banking
      • Capital Markets
      • Insurance
      • Investment Management
      • Real Estate
      • FinTech & Alternative Finance
    • Government & Public Services

      • Health & Human Services
      • Defence, Security & Justice
      • Central Government
      • Infrastructure, Transport and Regional Government
    • Life Sciences & Health Care

      • Health Care
      • Life Sciences
    • Technology, Media & Telecommunications

      • Telecommunications, Media & Entertainment
      • Technology
  • Insights

    Deloitte Insights

    Highlights

    • Deloitte Insights Magazine

      Explore the latest issue now

    • Deloitte Insights app

      Go straight to smart with daily updates on your mobile device

    • Weekly economic update

      See what's happening this week and the impact on your business

    • Strategy

      • Business Strategy & Growth
      • Digital Transformation
      • Governance & Board
      • Innovation
      • Marketing & Sales
      • Private Enterprise
    • Economy & Society

      • Economy
      • Environmental, Social, & Governance
      • Health Equity
      • Trust
      • Mobility
    • Organization

      • Operations
      • Finance & Tax
      • Risk & Regulation
      • Supply Chain
      • Smart Manufacturing
    • People

      • Leadership
      • Talent & Work
      • Diversity, Equity, & Inclusion
    • Technology

      • Data & Analytics
      • Emerging Technologies
      • Technology Management
    • Industries

      • Consumer
      • Energy, Resources, & Industrials
      • Financial Services
      • Government & Public Services
      • Life Sciences & Health Care
      • Technology, Media, & Telecommunications
    • Spotlight

      • Deloitte Insights Magazine
      • Press Room Podcasts
      • Weekly Economic Update
      • COVID-19
      • Resilience
      • Top 10 reading guide
  • Careers

    Highlights

    • Hear from our people

      At Deloitte, our people are at the heart of what we do. Discover their stories to find out more about Life at Deloitte.

    • Careers Home

  • UK-EN Location: United Kingdom-English  
  • UK-EN Location: United Kingdom-English  
    • Dashboard
    • Saved Items
    • Content feed
    • Profile/Interests
    • Account settings

Welcome back

Still not a member? Join My Deloitte

Assessing blockchain applications for the public sector

by Bruce Chew, Wendy Henry, Andrea Lora, Hogene Chae
  • Save for later
  • Download
  • Share
    • Share on Facebook
    • Share on Twitter
    • Share on Linkedin
    • Share by email
Deloitte Insights
  • Strategy
    Strategy
    Strategy
    • Business Strategy & Growth
    • Digital Transformation
    • Governance & Board
    • Innovation
    • Marketing & Sales
    • Private Enterprise
  • Economy & Society
    Economy & Society
    Economy & Society
    • Economy
    • Environmental, Social, & Governance
    • Health Equity
    • Trust
    • Mobility
  • Organization
    Organization
    Organization
    • Operations
    • Finance & Tax
    • Risk & Regulation
    • Supply Chain
    • Smart Manufacturing
  • People
    People
    People
    • Leadership
    • Talent & Work
    • Diversity, Equity, & Inclusion
  • Technology
    Technology
    Technology
    • Data & Analytics
    • Emerging Technologies
    • Technology Management
  • Industries
    Industries
    Industries
    • Consumer
    • Energy, Resources, & Industrials
    • Financial Services
    • Government & Public Services
    • Life Sciences & Health Care
    • Tech, Media, & Telecom
  • Spotlight
    Spotlight
    Spotlight
    • Deloitte Insights Magazine
    • Press Room Podcasts
    • Weekly Economic Update
    • COVID-19
    • Resilience
    • Top 10 reading guide
    • UK-EN Location: United Kingdom-English  
      • Dashboard
      • Saved Items
      • Content feed
      • Profile/Interests
      • Account settings
    07 September 2018

    Assessing blockchain applications for the public sector Blockchain basics for government

    07 September 2018
    • Bruce Chew United States
    • Wendy Henry United States
    • Andrea Lora United States
    • Hogene Chae United States
    • Hogene Chae United States
    • Save for later
    • Download
    • Share
      • Share on Facebook
      • Share on Twitter
      • Share on Linkedin
      • Share by email

    ​Government organizations can truly transform and enhance collaboration through blockchain technology. However, while IT will be a key factor, the composition of stakeholders, operations, strategy, talent, and compliance will be just as important.

    The buzz around blockchain is understandable—after all, it is likely to be the next big “foundational technology,” like the internet and personal mobile phones before it. And being a “new” technology, any conversation about its applications raises more questions than answers. But with a growing number of success stories emerging from the financial sector (where much of the current publicity for the technology originates), it would seem that blockchain may be living up to its hype.

    Learn More

    Create a custom PDF or download the full report

    Read more from the government and public services collection

    Subscribe to receive public sector content from Deloitte Insights

    Governments too are exploring dozens of applications for blockchain, as highlighted in our explainer, Will blockchain transform the public sector? However, before diving into the technology, government agencies and organizations should take into account multiple factors; here we highlight the most critical of these.

    Technology may be the most obvious consideration, but it’s certainly not the only concern. It is equally important to understand the unique ecosystem that is a blockchain and the considerations in successfully crafting a winning blockchain solution. We identify six key factors to consider in assessing the readiness of a government application for blockchain:

    • Consortium: Partnering with the necessary players to ensure network effect
    • Operations: Designating maintenance responsibilities
    • Business impacts: Understanding impacts to core business processes
    • Talent: Sourcing the right people to lead implementation
    • Compliance: Adapting to accommodate rules and regulations
    • Technology: Navigating through rapid technological changes

    The particular challenges and approaches that should be taken with regard to each of these factors will depend on the specific public sector use case under investigation. Of course, before addressing these six factors, it should first be determined whether blockchain makes sense for a given problem/application.

    To better understand how to consider blockchain’s potential in a government context, it’s helpful to examine a concrete use case. Intergovernmental transactions (IGTs) offer a clear example. IGTs are business activities conducted between two government entities. To properly record them and present the balances in the Financial Report of the United States Government, IGTs must be eliminated during the preparation process, or else they can result in misstated balances.1 In other words, when preparing the consolidated financial statements, intragovernmental activity and balances between federal entities should be in agreement and must be subtracted out, or eliminated, from the financial statements. If the two federal entities engaged in an intragovernmental transaction do not both record the same intragovernmental transaction in the same year and for the same amount, the intragovernmental transactions will not be in agreement, resulting in errors in the consolidated financial statements.2

    According to the US Government Accountability Office (GAO)’s Financial Audit of Fiscal Years 2017 and 2016, the federal government continues to be unable to adequately account for and reconcile intragovernmental activity and balances between federal entities. This inability can lead to issues such as the loss of billions of dollars in unreconciled activity; inaccurate reporting of assets, liabilities, costs, and other information; and errors and low trust in reporting.

    IGTs appear clearly to be a problem, but is blockchain the right solution? To assess the quality of fit between a problem and a blockchain solution, we recommend viewing the problem through three lenses:

    1. Desirability: The challenge or potential opportunity is desirable for an agency if it aligns with and furthers its goals or operations, as well as that of its stakeholders. IGTs are a significant, shared business problem affecting nearly all agencies. A solution providing trading partners with a near-real-time settlement and an accurate record of transactions would be desirable for all involved. From a business perspective, it could help minimize errors and increase managerial confidence in transaction reporting. From the user’s perspective, it could minimize the time needed to complete administrative tasks and allow employees to reallocate their time to more mission-critical tasks.3
    2. Feasibility: The challenge or potential opportunity is feasible if there are no insurmountable technical or organizational obstacles to its success. IGT is, by definition, a business transaction between two heterogeneous business partners (agencies). Organizationally, the agencies may differ in their culture as well as policy. Complex questions concern the integration points between trading partners and systems, changes to current processes, and governance of the network. Data security and infrastructure are important to government leaders and may be key considerations when designing user interfaces. These are all issues that blockchain could be designed to wrestle with.
    3. Viability: After an agency has decided there is a desirable business case and determined it is feasible to move forward, it is imperative to evaluate whether the use case for blockchain is viable—meaning that blockchain would offer greater advantages and value than other solutions. IGT has the four main characteristics that make a viable case for blockchain—multiple writers who need access to shared data, in a low-trust process that requires immutability to address current problems. Blockchain also has added value potential for IGT through disintermediation via automated reconciliation and real-time transparency, as well as the possibility of codifying terms and conditions of the interagency agreement (IAA) into a “smart” contract on the blockchain.

    In a separate, more extended discussion, the six key factors for assessing the readiness for blockchain are explored in more detail and examined with regard to IGT.

    Even blockchain’s most enthusiastic supporters should not suggest it is a panacea. The desirability, feasibility, and viability of each use case must be considered and then the six readiness factors can be addressed. While the considerations for implementing blockchain solutions are many, the benefits are slowly becoming clearer. Blockchain offers government organizations an opportunity for true collaboration and transformation. Early adopters can expect to see the benefits sooner than most, while establishing themselves as leaders in areas that are likely to grow in importance over time.

    Download the full report to know more about what a government agency should be considering when starting a blockchain project.

    Also, check out the explainer, Will blockchain transform the public sector?

    Authors

    Bruce Chew is a managing director with Deloitte Consulting LLP’s US Strategy service line, Monitor Deloitte. He is based in Boston, Massachusetts.

    Wendy Henry leads Deloitte Consulting LLP’s US Government and Public Services Blockchain practice. She is based in Arlington, Virginia.

    Andrea Lora is a senior consultant in Deloitte Consulting LLP’s US Government and Public Services Blockchain practice. She is based in Arlington, Virginia.

    Hogene Chae is a senior consultant in Deloitte Consulting LLP’s Government and Public Services practice. He is based in Arlington, Virginia.

    Acknowledgments

    Cover image by: Stuart Briers

    Endnotes
      1. Department of the Treasury, Intergovernmental transaction (IGT) guide, accessed August 21, 2018. View in article

      2. US Government Accountability Office, “Financial audit: Fiscal years 2017 and 2016 consolidated financial statements of the US Government,” February 15, 2018. View in article

      3. Joe Gerber, “How to prototype a new business,” IDEO CoLab, accessed August 21, 2018. View in article

    Show moreShow less

    Topics in this article

    Blockchain , Government , Public Sector , Emerging technologies , Technology , Federal Government

    Deloitte Center for Government Insights

    View

    Download Subscribe

    Related

    img Trending

    Interactive 3 days ago

    Bruce Chew

    Bruce Chew

    Federal Consulting Managing Director

    Bruce Chew is a managing director with Monitor Deloitte, Deloitte Consulting LLP’s strategy service line. For more than 20 years, his work has focused on strategy development and implementation and the building of organizational capabilities. Chew is a former Harvard Business School professor and has twice served on the advisory board panel for the President’s Federal Customer Service Awards. He has worked with the federal government, universities, and companies across a broad range of industries.

    • brchew@deloitte.com
    • +1 617 437 3526
    Wendy Henry

    Wendy Henry

    Global Consulting Blockchain and Digital Assets Lead | Deloitte Consulting LLP

    Wendy currently serves as the Global Consulting Blockchain and Digital Assets practice lead. Currently working with multiple industry and government clients to explore, experiment and implement blockchain and digital assets projects, she blends deep technical expertise alongside functional knowledge of required governance and operating models to support the implementation of these decentralized solutions. Working with blockchain and digital assets since 2013, she has a unique perspective around the challenges and opportunities in this space, including the need for evolving regulatory positions. She has worked with clients across a wide spectrum of engagements including forming digital assets strategies to incorporate evolving concepts like NFTs and Web3.0 to helping clients identify meaningful enterprise use cases to build and implement blockchain and digital asset solutions. Wendy earned her bachelors in economics from the College of William and Mary and her masters in information technology from George Mason University Volgenau School of Engineering.

    • wehenry@deloitte.com
    • +1 571 858 1181
    Andrea Lora

    Andrea Lora

    Senior Consultant | Deloitte Consulting LLP

    Andrea Lora is a senior consultant in Deloitte Consulting LLP’s US Government and Public Services Blockchain practice. She works with federal clients to design and build business-focused technology solutions, and has a passion for delivering innovative blockchain solutions and thought leadership.

    • anlora@deloitte.com
    • +1 571 882 6740
    Hogene Chae

    Hogene Chae

    Senior Consultant | Deloitte Consulting LLP

    Hogene Chae is a senior consultant in Deloitte Consulting LLP’s Government and Public Services practice, with a focus on customer transformation by designing and implementing capabilities and architectures to bring customer strategies to life.

    • hchae@deloitte.com
    • +1 571 858 1610

    Share article highlights

    See something interesting? Simply select text and choose how to share it:

    Email a customized link that shows your highlighted text.
    Copy a customized link that shows your highlighted text.
    Copy your highlighted text.

    Assessing blockchain applications for the public sector has been saved

    Assessing blockchain applications for the public sector has been removed

    An Article Titled Assessing blockchain applications for the public sector already exists in Saved items

    Invalid special characters found 
    Forgot password

    To stay logged in, change your functional cookie settings.

    OR

    Social login not available on Microsoft Edge browser at this time.

    Connect Accounts

    Connect your social accounts

    This is the first time you have logged in with a social network.

    You have previously logged in with a different account. To link your accounts, please re-authenticate.

    Log in with an existing social network:

    To connect with your existing account, please enter your password:

    OR

    Log in with an existing site account:

    To connect with your existing account, please enter your password:

    Forgot password

    Subscribe

    to receive more business insights, analysis, and perspectives from Deloitte Insights
    ✓ Link copied to clipboard
    • Contact us
    • Careers at Deloitte
    • Submit RFP
    Follow Deloitte Insights:
    Global office directory Office locations
    UK-EN Location: United Kingdom-English  
    About Deloitte
    • Home
    • Press releases
    • Newsroom
    • Deloitte Insights
    • Global Office Directory
    • Office locator
    • Contact us
    • Submit RFP
    Services
    • Audit & Assurance
    • Consulting
    • Financial Advisory
    • Legal
    • Deloitte Private
    • Risk Advisory
    • Tax
    Industries
    • Consumer
    • Energy, Resources & Industrials
    • Financial Services
    • Government & Public Services
    • Life Sciences & Health Care
    • Technology, Media & Telecommunications
    Careers
    • Careers Home
    • About Deloitte
    • About Deloitte UK
    • Accessibility statement
    • Cookies
    • Health and Safety
    • Modern Slavery Act Statement
    • Privacy statement
    • Regulators & Provision of Services Regulations
    • Deloitte LLP Subprocessors
    • Supplier Standard Terms & Conditions
    • Terms of Use

    © 2023. See Terms of Use for more information.

     

    Deloitte LLP is the United Kingdom affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see About Deloitte to learn more about our global network of member firms.

     

    Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom. A list of members of Deloitte LLP is available at Companies House.