Unleashing Change
Blockchain Changing the Built Environment
Blockchain implementation
WHY DO WE NEED TO CHANGE
Blockchain is on a sharp upward trajectory starting with the financial sector and showing its ability to significantly change the built environment on every front. You know this as you are starting to hear about it and see it come up in discussions with industry bodies and within government departments.
The important question for you is how does it affect my business? How should I get us started, what areas should we focus on, and why should we bother thinking about blockchain at all? As with any technology there are industry frameworks, such as the World Economic Forum – decision flowchart. However, the framework is specifically focused on applying blockchain and assumes that blockchain is the solution. But how do you know whether blockchain is a suitable option for you in the first place? More to the point, is blockchain something that I need to worry about now or should I wait until it becomes mainstream?
We want to help you understand what industry could be aiming for so that you can prepare your business whilst figuring out what blockchain technology will best suit your differentiation and future growth.
Many blockchain solutions have expanded beyond the financial sector, with some of the latest figures showing a significant increase by government agencies, energy, and utilities.
Why? Because it is establishing alternatives to manage areas of risk. Blockchain is assisting with improving identity and ownership, supply chain transparency and efficiency, and inventing or reinventing a new wave of markets.
What does this mean? Change is inevitable for many markets (if not all) when it comes to blockchain. Governments are preparing by setting national roadmaps, changing regulatory conditions, and enabling and promoting the implementation of blockchain technologies.
For the Built Environment this change effects how we will operate as an industry overall. This has the potential to change your market position much quicker than you may expect or can keep up with. The challenge is to understand the industry impacts so you are ready when the rapid influx of solutions hit the mainstream market.
For example, for the Built Environment Sector we can expect blockchain-enabled technologies to bring material benefits, such as faster procurement with greater emphasis on rewarding genuine skill and experience; increasing value of intangible (i.e. digital) assets; creating new ways to share and value critical operation and behaviour data, to name just a few.
Having the ability to see this and invest in both preparing your talent and exploring a solution/product is where you’ll not only meet the market change but be able to leverage how this shift impacts your market share and future market aspirations.
Focus on the changes
The core benefits that blockchain technologies present to the Built Environment sector are:
- Increasing supply chain transparency and efficiency,
- Improving identity and ownership, and
- Inventing or reinventing markets.
The significance of the core benefits is they are realised across the key business streams within the Built Environment sector.
- Industry Stream – solutions that enhance industry and its processes,
- Business Stream – solutions that enhance individual businesses and their processes, and
- Delivery Stream – solutions to help deliver blockchain technical services.
In exploring the three core functions of blockchain technology we’ll provide an awareness on what the functions will deliver and the possible impacts. This is designed to start you on your blockchain exploration.
Helping to decide on what will impact your business and preparing you to capitalise on the change.
1. Increasing supply chain transparency and efficiency
We need a blockchain supply chain to help participants/stakeholders to more effectively manage the entire lifecycle of assets. Blockchain-enabled supply chains will help participants to: smart contracts, tracking, fraud/theft elimination and transaction processes.
Tracking
Verifies the supply chain process at each step of the lifecycle.
Possible effects: Product origin and handling exposure (this can include the intangible items such as data); Record of product or service status at each stage of production; Tracking of purchase orders, change orders, receipts, shipment notifications, and other trade related information; Verification of material quality improves; Tracing of consignments through the supply chain minimises theft of materials; Confirms quality of goods meets specification requirements.
Impacts to: Entire value chain from raw materials, construction to operations and maintenance.
Smart Contracts
An agreement between two parties, with a transaction processed over the blockchain that occurs when a condition is met.
Possible effects: Improved efficiency in automated purchases, deliveries, quality, authenticity and availability. Verified delivery conditions, storage and installation.
Impacts to: Procurement practices across all industries within the Built Environment.
Transaction Process
Documents and verifies the transactions.
Possible effects: Individual contributions to design/construction output receive greater recognition; Validates that the proposed project team is provided at delivery; Software and applications develop links to blockchain (e.g. once a file has been published or submitted its transaction is added to the blockchain for permanent record).
Impacts to: Consulting, design and construction teams, software, platform and cloud vendors.
2. Improving identity and ownership
Blockchain-enabled identity systems remove problems associated with inaccessibility, data insecurity, and falsified identities. This feature alone could have a significant impact within the Built Environment, some positive and some negative. Below is a list of the areas and the current possible effects recognised.
Companies
Supplier Identity
Validating companies, their competency and capabilities, and past performance history in cost, quality, and safety etc.
Possible effects: Risk exposure across the supply chain becomes more evident; Vetting and compliance for panel of suppliers increases significance; Quality, safety and compliance metrics increase in transparency.
Impacts to: Procurement and panel of supplier practices across all industries within the Built Environment.
Customer or Staff Identity
Privacy-centric regulations shift the industry to expose their personal data collection methods.
Possible effects: The way data (ranging from employee data to travel behaviour patterns) is collected and reported may change, which may impact KPI reporting and the information available for project planning.
Impacts to: Data collection, data aggregation and storage, and technology services; Employee contracts and award arrangements.
Ownership
Validation of tangible and intangible assets.
Possible effects: Value of digital assets (e.g. Digital Twins) increases with traceability; Verification market increases with new roles emerging to validate quality of intangible assets; Increase in demand for valuation for intangible assets (i.e. digital as a commodity).
Impacts to: Asset owners; Data creators.
Individuals
Globally recognised qualification and experience
Verify records for academic credentials, professional certifications, workforce development, and civic records.
Possible effects: Competency of staff utilised across projects/teams becomes more exposed; Increased propensity for eco-system approach to collaboration; Log of learning and development becomes more highly valued; Industry bodies holding a significant role in maintaining, verifying, and working with businesses in continuing professional development (CPD).
Impacts to: Consulting; Contractor project teams; Education; Industry bodies.
Internet of Things (IoT) Devices
Access Identity and Management
Verify ownership, identity and rights to reduce security risks.
Possible effects: Cyber security market increases; Formal verification of companies and individuals will increase; Further certification requirements for installation; Higher costs to owners.
Impacts to: IoT installers and advisors; Project and City infrastructure planning and systems integration; Device maintenance teams; Asset Owners.
3. Inventing or reinventing markets
Blockchain is challenging traditional industries and markets by exposing how they intertwine with others. This creates opportunities for services to cross over within the Built Environment sector and establish greater market share.
As an example, current supply chain solutions are assisting in quality assurance from inception to customer, such as, Everledger, IBM Food Trust, etc. These solutions are adaptable across sectors and investors are helping to drive this into each industry.
The delivery stream is the new market that makes this change happen. They are assisting businesses from large enterprise to start-ups to implement their blockchain solutions. The current business models recognised in this area are:
- Technology Solutions,
- Applied Technologies, and
- Professional Services.
The speed of growth in blockchain-enabled solutions has pushed many governments to act now. Whether you are looking at the industry stream, your own business stream, or the technology delivery stream, blockchain-enabled solutions are going to appear and you need figure out how your business will respond.
Now to start preparing
First, consider how the industry-wide changes may impact your business. This will establish the areas of greatest risk to your current business model and an what areas you may need to pivot or change direction within.
Next, identify the areas that you believe might place your company/talent at risk. This will help you to change your business processes that could be seen as less attractive to your customers in the future, such as your data or information collection methods, etc.
Finally, start to review what blockchain business models may improve or disrupt your business. This can be in the form of your contribution to a broader market eco-system through to products or services that are enabled by blockchain technologies.
Following these steps provides an awareness level of what unleashing the change of blockchain brings to your business. It is designed to help you sift through the expected impacts – allowing you to understand and manage your business value with blockchain.