Bidding on trust: using Taraxa to build data integrity and stakeholder accountability in the public sector.
In brief:
- Building trust-verifying mechanisms through the blockchain technology will eliminate the pitfalls of public contracting and government-run enterprises.
- Taraxa’s offers several value propositions for large-scale public infrastructures such as operational transparency, confidence in the process outcomes, digital identities.
During the COVID19-triggered economic recession, the lowest cost of ownership becomes an absolute business necessity both in the private and government sectors.
Whether it is managing public procurement contracts or government-run enterprises, operating and renewing critical enterprise assets in the public sector requires strong technological acumen. When applied correctly, technology offers a path to address the pain points of the public economic sector that are largely due to the lack of trust-verifying mechanisms:
High level of financial, operational, and compliance risks.
The underlying operational complexity of large-scale public infrastructures such as communications (e.g., 5G base stations), power (e.g., high-voltage power plants), and transportation (e.g., federal and regional railways) requires a lot of human and technical resources to establish double (and even triple) verification to ensure the source and accuracy of critical operational data. This makes internal processes time-consuming and requires a lot of coordination between the stakeholders.
The lobbying of private interest hurts the national economic interest.
Since the public sector strictly regulated by the government and offers high economic gains, contract parties and project partners often have conflicts over their financial interests and operations. Technology has long been viewed as an efficient way to battle lobbying and bribery: in 2016, the UK committed to open up more data on public contracting using the open contracting data standard to protect the public interest.
In this blog, we explore what benefits the blockchain technology offers to public contracting in asset-intensive enterprises.
Taraxa’s value proposition for public infrastructures.
Taraxa helps large-scale public infrastructures to mitigate operational risks associated with contract management and asset maintenance. Asset-intensive industries such as coal-mining, agriculture, energy, railroad construction, urban transit, will all benefit from the blockchain-geared platform for collecting and retaining critical operational records.
Eliminate intermediaries and build accountability through smart contracts.
Smart contracts running atop Taraxa’s blockchain ledger deliver a robust mechanism for keeping contract parties and stakeholders accountable for their actions. Contract terms are encoded and recorded on the blockchain, which makes their fulfillment transparent and traceable.
This functionality helps to build operational transparency and eliminate broader issues such as lobbying of private interest and bribery in public procurement and tendering process (closing, communication of decisions, bid analysis based on defined criteria). Taraxa’s application in construction is a good example of how the platform makes complex, multi-faceted contractual relations transparent and traceable through correct authorizations and logs of progress and milestones:
‘For change orders management, our flexible cloud-based data collection solution makes it simpler for general contractors to track progress across multiple teams, with smart contracts automatically issuing invoices and automated payments linked to project milestones’. Steven Pu, Co-Founder and CEO.
Mitigate operational and financial risk.
Taraxa’s immutable audit log of facts and events helps to ensure the authenticity of operational data, significantly reducing the friction points between collaborating parties — both internal and external. It is very useful for high-risk, cross-border, and multi-stakeholder operations in the sense that it helps to build confidence in the process outcomes. This use case has been applied by our customers for asset leasing to build a bridge of trust with their overseas partners:
‘One of our clients is a Japanese leasing vendor. They lease out arcade machines to operators and then distribute the revenues generated by each of them among their machine operators. When they started expanding their markets in East and Southeast Asia, their growth rate accelerated very quickly. Still, they found it difficult to agree on incoming asset performance numbers with their overseas operators. And if there is no agreement on the numbers, you can, of course, change your business model to the fixed-cost, but then fixed-rate return on assets becomes much lower. Our bundle of software and hardware allows them to confidently grow their revenue stream by onboarding partners in new markets’. Steven Pu, Co-Founder and CEO.
Step up supply chain management with blockchain-geared auditing.
The use case looks particularly promising when coupling blockchain with IoT using a bundle of software and hardware modules to establish digital identities on factory floors. With hardware modules installed in machinery on factory floors, enterprises will be able to monitor and audit their performance through the signals that are transmitted to the cloud and anchored to the blockchain. By installing encrypted modules to IoT edge devices, Taraxa enables digital identities for machine-generated data:
‘We use the proper hardware support to secure the source and invariance of the data collected from hardware devices. Hardware modules developed by Taraxa have onboard key generation and signature functions to maintain the device’s independence. MCU’s application logic disables the write permission in advance to ensure anti-tampering behavior. This way, the module helps enterprises build visibility and resilience when managing their operational assets. We see the market demand and anticipate that such modules will be integrated into most edge devices in the future’.
By using Taraxa, enterprises and contractors in the public sector can effectively track responsibilities and reduce operational costs associated with asset-intensive resource planning.
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