The pilot utilises blockchain technology with the objective of promoting the competitiveness of the Northern Growth Zone network cities. In practice, the pilot is an automation of business processes that covers many operators.
“The objective of the pilot is to illustrate and concretise the possibilities of blockchain technology. In the future, cities can handle digital processes on a shared platform — do electronically what is now done manually with more labour force,” Karri Mikkonen from DBE Core Oy explains.
Digitalisation and blockchain technology facilitate cooperation between operators by enabling the simultaneous use and data retrieval by several parties. The decentralised blockchain network developed by DBE Core combines the enterprise resource planning systems of orderers and deliverers.
The platform is an encrypted network created with blockchain technology on top of the internet, which connects systems to each other with a shared language. Sections of the platform have previously been tested in national research projects.
“Data stays stored online and can be used by all parties. At the same time, the consumer gets a digital mark of the order process.”
The pilot project, funded by the Northern Growth Zone, is one of the technology and innovation implementations supported by the cooperation network. Espoo and Turku are the two Northern Growth Zone cities involved in the first phase which will be implemented from January to March.
“The goal is that our pilot expands into a platform shared by cities and can also be duplicated to the international markets,” Mikkonen explains. The platform is based on the PEPPOL system, which is standardised in the EU and applicable as such for international use.
Resources allocated effectively
Digital solutions save time and effort in various sourcing and tendering processes. Automation and blockchain technologies can save city resources in the long term.
“The most important task of a municipality is to serve its citizens. At best, the piloted technology creates savings and improves services: resources can be allocated where they are most needed,” Program Director Tapio Järvenpää from the City of Turku says.
Suitable local challenges for the pilot were sought out from the Northern Growth Zone municipalities. The initiative started with a workshop where suitable uses for the blockchain technology were identified. Espoo and Turku are among the first cities in the world to test blockchain technology.
“We have been interested in the possibilities of blockchain technology for a long time. We realised that the pilot is now in a phase where we can join in on the testing,” explains the City of Espoo’s Head of Supply Chain Pasi Ojaniemi, who is responsible for the local implementation of the pilot project.
The new technology supports the traceability of data, among other things. For example, the tracking of orders and deliveries and sharing of data has typically required a lot of manual work, which also increases the risk of human mistakes.
“Blockchain offers better data, which already makes operations more secure and, in the long term, increases predictability,” Ojaniemi says. “As the system develops, we can, for example, anticipate a growth in demand and communicate the changing needs directly to the supplier.”
Blockchain enables the sharing of data between municipalities and stronger cooperation than before.
“Cooperation in the Northern Growth Zone is a good example of the benefits for municipalities when they share information with each other and cooperate,” Järvenpää concludes.