Blockchain applicability in the management of urban water supply and sanitation systems in Spain

Abstract

Blockchain constitutes a disruptive technology that is currently changing business models and the way organizations operate. This paper explores the applicability of blockchain technology, and of distributed ledger technologies in general, to urban water supply and sanitation services in Spain. The potential of this technology for improving processes in this sector is assessed through a specific methodology of strategic analysis developed for this purpose. First, the technical, legal and managerial factors that condition the potential use of this technology to address the global, operational and governance challenges faced by urban water management are explored. Second, strategic analysis tools (e.g. value chain, factors of competition, and benchmarking) are used to model a water utility organization as a set of processes and characterize blockchain as an enabling technology with both benefits (traceability, immutability, and disintermediation) and limitations. Based on cost-benefit analysis, use cases in which the implementation of a blockchain could improve the organization?s performance can be discerned. The results identify the processes and sub-processes of urban water utility management for which the use of a blockchain could improve performance: comprehensive maintenance, the management of serious incidents, and supplier management. Essentially, the methodology developed identifies management processes whose requirements are efficiently met through automation derived from blockchain solutions. Regardless of the management models currently in place in Spain, the traceability and disintermediation benefits of blockchain solutions can help to overcome governance and efficiency challenges associated with the management of urban water supply and sanitation services.