Surrounded by pies: A breakthrough for security and transparency

A new method of project management, based in new technology, tracks every interaction in real-time and with audit-level accuracy.

Ishan Kaul

Ishan Kaul

Principal, Federal Advisory, KPMG US

+1 703-286-6753

Video transcript


On the outside, just apologize in advance if you see some pictures that make you hungry, we're at the end, as David said, and the reception will be soon. So with that said, let me set the stage.


I'm at Rockefeller Center, in the basement, in a restaurant, surrounded by pies. How did this happen? We're walking in New York City, just finished a meeting, run into a client. We've been trying to see this client for months now, and lo and behold, we run into him in the streets in New York. We're like, “do you have time?” We have time. We've got a few hours before we have to make our travel plans and we're like, “This has got to happen today.” Well, have you ever tried to find a quiet place to do some work in Midtown Manhattan, especially on short notice?


Well, the best we could do was a restaurant in the basement of Rockefeller Center. We head over, we get lucky again. We find a table, we run right into it. Sit down, laptops open, dive right in. Well, what's the most prized commodity for a tourist destination restaurant? Tabletops. Now we're sitting here with laptops open, doing work. We're seeing people line up, looking at us… hungry. They want the table. We've got to keep this table because God only knows when we’re going to run into this client again. We've got to talk through this really innovative solution we have. So I'm looking at the menu trying to figure out what order more coffee, some appetizers, heck, it was mostly pies. I bet you're thinking to yourself now, "Where's he going with this? Why should I really care?" Think about it. I am focused on the client, the solution, the discussion we're having and really oblivious to everything around me – except maybe the pies.


Meanwhile, the restaurant's really focused on what is going on here? “Are they going to eat these pies? Are they going to pay for these pies? Are we going to have enough pies left for the rest of the day? Really, when are they going to leave? We've got to turn tables." So, to put it in another words, we are using all kinds of resources. We're using a table for it’s unintended purpose in this scenario. And continuing to serve us, it's kind of a risk, right? From the restaurant's perspective, it could be risky to serve us. And when you think about it, at best we're being inefficient and at worst we're being downright wasteful. This whole story around the pies is really the metaphor, right? The restaurant really is your business, is your enterprise and the pies are your products, and when you think about it that way, the fact that you have got a lot of waste, inefficiencies, a lot of processes in the enterprise that you really don't have access to the real data, access to transparency into what actually is happening in the environment.


"How do I make informed decisions? How do I turn this table fast? How do I make sure there're enough pies?" Without that information available to you real time, you end up making decisions that don't pan out. That aren't what you intended. So, how do we solve this problem? This is pretty pervasive in the enterprise and it's sometimes fundamental to how we try and solve these business challenges. We like to look at an approach where we look at innovation, not just from thinking outside the box, but also looking at technology to feed that innovation cycle. To really enable how we can do things differently. Blockchain, I'm looking out here, I'm sure most of you know of blockchain, some of you might even be thinking to yourself, "He really means Bitcoin, right?" No, not in this case. Bitcoin, saying it's like blockchain is saying "My cell phone is my email device."


Yes, I could do email on my cell phone, but it's not the only application. Similarly, Bitcoin is an application of the foundational technology that’s blockchain. So, what is blockchain? Fundamentally, the components and the technologies that make up this foundational platform have been around for a long time. I'm talking databases, encryption, network, they've been around since the dawn of computing. It's really how they'd been put together and what has resulted in the amalgamation of a solution that's really enabled some capabilities and attributes that are foundational in nature and that we think are very, very exciting and enable us to innovate, to solve some of these challenges.


What am I talking about here? Right? You're looking at storing transactional data in blocks, the “block” part of blockchain, you're looking at then encrypting those blocks together, but then as each transaction occurs, you link them back to the original block that proceeded it and you encrypted again. So now you're forming this chain of transactions and it's the chain. So blockchain is really the nodes that get to store this data that's encrypted in blocks forming a chain and these nodes gets distributed around a network. This inherent distributed, immutable nature of this technology is what really enables things like transparency into your data, real time access into your data, trusting that data, being able to really improve efficiencies because you know how your process is being executed.


So fundamentally, this is now giving you certain capabilities out of the box that you don't have to cobble together, and really trying to help you solve some pretty fundamental enterprise solutions. As you think through that, and as we've been thinking through it with our clients, let me leave you with some examples.


Flu season is upon us. From all accounts, it's probably going to be a bad one, that's what they're predicting. It might even be bad in certain areas. We will hopefully have access to it and hopefully you guys will all get flu shots. But really, traditionally and today, the distribution mechanism of flus, flus vaccines and prescription drugs for most part is really done in lots. So in general, when they’re sent out, we know where they are, we kind of know how much supplies were sent where, but we don't have real time access to that information. We unable to react because we've got big, large numbers without any granular detail. Well what if we could change that around? What if at the point of manufacturer of the vaccine, you could identify each vial? You can uniquely code each vial, produce a system that the vial is registered on a blockchain, and each path it takes down its supply chain going all the way through the distribution, all the way out to the pharmacy or the doctor's office. Even back out to when you get administered with a shot, you have that chain and you know exactly what happened with that each individual vial.


Wait, all of a sudden now you've got traceability, transparency, real-time access to data for every single vial. Well, not only can it really improve safety in the drug supply, but it can also now give you information to react to if there is an outbreak that's worse in one region. You can say "how many supplies are close by in real time? Move them up there." You can even ramp up manufacturing and try and head off something that today when you start, the season is very unpredictable.


Let me give you another example. Most governments have some sort of grant, have some sort of a grant system, give out money for a whole variety of endeavors and initiatives. What they most have in common though is once the funds are allocated it's really hard to track where the money's getting spent and really get that information –especially in real time. What if you could follow the money?


To further elaborate that, let me talk about a more specific scenario where grants are issued and this is around disaster assistance. Disasters happen, it’s an unfortunate part, but we have to really react to them and how we can react and best mobilize afterwards is what really counts. In today's world, if you look at the most recent one, Hurricane Maria in Puerto Rico, when everybody's mobilized and you're reacting to that. A lot of people just simply need basic necessities like shelter, food. How are we going to make sure we're going to make it through the night?


Most folks will go there and require some sort of financial support. How is that being done today? Vouchers, gift cards, sometimes even cash. Now you can see the problem with this, right? You don't want such distributor, you don't – once that disappears – you don’t have any access to how that's getting spent, where it's getting spent. Is that really fraud happening? Are they using it for the intended purpose? What if you could flip this whole scenario? What if you could approach it with... Let's build an application. Let's build an application that lives on a mobile device and better yet, since a lot of these people have lost everything, let's give these people a mobile device with the application pre-installed, right? Behind that application, you support it with a blockchain technology where every interaction that you want to occur is encapsulated. And here I'm talking about listing hotels, grocery stores, online stores, anywhere that you want them to use those credits that's available to them in an application to actually be able to spend and get what they need.


Now, as a grant administrator or as a disaster recovery fund administrator, I have access to real-time information for every single individual that's using that money, where it's getting spent, how it's getting spent and better yet I can react in different ways. Not just look at fraud situations and alert for those, but also react with "that block of hotels is getting filled up, I should really arrange for another block of hotels or transport these people to a different region." So you can see how this transparency, real-time information and security and trusting all of their data behind it starts to enable a whole host of scenarios that today is very cumbersome to do in traditional processes and traditional systems.


As you think about this and make it real to your situation and your enterprise and your challenges, you might even run across some evangelists who will really try and convince you that this is going to change society completely. It's going to reimagine how we live, how we work, how we do everything.


While KPMG, we're bullish, we're also pragmatic about how this is going to really work. Especially in the enterprise, right? We don't think about going in ripping all your systems out, turning up all your processes upside down and just implementing blockchain. We know how difficult this is in most environments. The approach we take is, look, we're looking at it as a trust architecture. It's this veneer on top that plugs into your systems and processes, but enables you to enhance the processes, add efficiencies, add a way to automate. Fundamentally, not just have transparency and traceability in real time access to the data, but fundamentally trust that data. That's the key. Trusting that data. It's this trust architecture is what we think will be revolutionary, and it will be have long reaching implications, not just at the enterprise, but I think across society in general. And these implications, frankly, we're much better than a table full of pie. Thank you.