Blockchain in Canadian public sector: Value chains

Ensuring all participants gain value is key to the success of blockchain solutions

Co-authored with Ken Saloranta, Chief Technology Officer, Public Sector, IBM Services. This material is our own and don’t necessarily represent IBM’s positions, strategies or opinions.

In our first post, Blockchain in Canadian public sector: Foundations, we introduced the basics of how we view blockchain. A key thread which will run through this series is a focus on engaging collaborators in the blockchain.

To build trust, most government organizations strive to be as open, transparent and collaborative as possible.

IBM Institute for Business Value

One scenario that can be explored is in citizen identity and basic demographic information. The user could be the citizen themselves. They review the data the government has on them and see that the address is out of date. They submit an update with their new address, and as a trusted and identified citizen they have that access. The federal government in this model would host the blockchain consensus resources, and would add the updated address data as a transaction to the citizen blockchain.

Interoperability model for a private, commissioned blockchain for citizen registry

Blockchain automatically creates immutable records and synchronizes them with other collaborators such as the Canadian Revenue Agency, provincial and municipal systems. All governmental services can access this to ensure that citizens receive governmental notifications with minimal logistical overhead. The citizen is better served, their data is protected and the effort of change in this key data is substantially reduced.

The value arises not from the technology, but from the value chains that it enables and the ability it has to incentivize end users to participate and change their behaviors. The work of a blockchain business architect is in assessing the value chains for enterprise and end users, structuring the business agreements and incentive models to balance value and reward participation for all members, define the approaches for security and privacy by design, and to establish the mix of automated and human oversight governance.

In this example, maintaining information on citizens is a core responsibility of the government and an expected cost. There is strong value for the Canadian Revenue Agency in having up-to-date and accurate information on citizens which will enable it to validate which tax regulations apply. There may be limited value for municipal agencies in participating and costs to participate, but strong value for federal organizations of having a distributed network of resources updating and maintaining accuracy of citizen information. As such, the design of incentives might discuss rewarding municipalities for deployment and maintenance of the solution. The overall systems become more efficient and effective with lower administrative overhead, and the wins from that efficiency are distributed equitably.

This is similar to the work done by public sector program creators. They deal with initiatives involving shifting citizen behavior with multiple enterprise partners involved in delivery of the change. They deal with border security and the movement of goods across those borders. They deal with multiple participant safety programs for food and pharmaceuticals. They deal with the security and privacy implications of their programs.

Processes will change due to the greater transparency granted to the regulator with the value chain. Each partner in the value chain needs to be properly incentivized to participate. How do we develop an integrated business case that incents participation across the value chain commensurate to the investment each party will contribute? These are business — not technical — concerns that must be understood and addressed.

Subsequent posts will explore further scenarios in incentives and governance with specific use cases pertinent to Canada.

Ken Saloranta, Chief Technology Officer, Public Sector, IBM Services

I’m passionate about learning my client’s businesses in depth, gaining insight into the challenges that face them on a daily basis, and applying solutions and technology to overcome those challenges. I provide technical guidance and oversight to the IBM Public Sector consulting practice in Canada serving government and healthcare organizations.


Michael Barnard, Executive Consultant — Cloud, Blockchain and Health, IBM Services

Focused on helping clients with their strategies related to Cloud transformation and on blockchain solutions in the Health and Public Sector. He has over 20 years of delivery, innovation, transformation and consulting experience, covering a wide span of business and technical domains. Specialties: Healthcare, grid transformation, blockchain, Cloud portfolio transformation strategy, complex program startup.




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