Presentation submitted by Puja Gopal, Shubham Kishore, Andrey Popkov and Jinyu Yang.
Undergraduate and graduate students from leading universities around the world were tasked with creating a cybersecurity strategy for a U.S. health system that is inclusive of their supply chain, addresses the threat of gray market and counterfeit products and includes approaches to monetize the cyber hygiene capabilities.
MHS are facing three core cybersecurity problems, namely island hopping, insider threat and gray and counterfeit goods. Having proposed solutions for each of these three problems previously, the team have expanded on this and developed aa implementation strategy, financial model, monetization plan and future developmental prospects.
Having weighed the pros and cons of various market solutions, our proposal embedded the CIA triad of cybersecurity, which are confidentiality, integrity and availability. Our proposal was to first implement Multi-Factor Authentication (MFA) and Just-In-Time (JIT) Privileged Access Management (PAM). These two together would help combat the insider threat and island-hopping issues, respectively. With MFA, you are adding additional channels for identification and authorization. With JIT PAM, you are ensuring only the right user has the correct access they need for a specific amount of time, so as to complete their tasks. Second, to combat the issue of grey market and counterfeit goods, we proposed a blockchain solution to gain transparency and reliability.
When they implement these solutions, they will start seeing immediate benefits. Data breaches are expected to reduce by 84.35% and gray and counterfeit goods will be reduced by 30% in Year 1 and by 70% from Year 3 onwards. In terms of cost savings, MFA and JIT PAM together will save $6.3 million, and with a 5-year total cost of ownership being 4.5 million, this gives an ROI of 39%. Apart from the monetary gain, they also be able safeguard their data better.
We incurred a $200 billion loss worldwide and $21 billion loss in the US because of counterfeit drugs every year. The graver problem is that counterfeiting causes deaths: 500 children die every year. The cornerstone of this problem is complexity and silos in the supply chain. We provide you a solution, which is currently being used by industry leaders in cross-domain businesses such as JP Morgan, SAP, IBM, Unilever, Walmart, Amazon and a long list of companies who care about reducing counterfeits and customers.
Hyperledger Fabric is the solution which takes about $500K to implement, and incurs negligible transaction amount of $0.42.
The technology works as such that ‘Client’ nodes invoke transactions. Ordered’ nodes provide updates to the transaction data. Peer nodes receive the update from the orderer and maintain the distributed ledger. They commit the transactions in the ledger. ‘Endorser’ nodes are peers who validate transaction validity such as digital signatures. They endorse transactions so that other peers can record the transaction in the ledge.
Implementing blockchain systems as a service with the low payment $2 for any received consignments creates a market of $180 million.
This will alleviate the silos and increase transparency in the whole value chain, which will reduce the cost of medicines and counterfeits. As it requires the digital signature and smart contracts, accountability is enhanced.
Through this solution, we can reduce the presence of counterfeit drugs, make the market place safer, and reduce operating costs for the healthcare institutions.
To estimate the return on investment (ROI), our team makes projections of future cash flows. The year 2022- 2026 will be the penetration stage, our price will be $120,000 for each customer, which is relatively low. Meanwhile, the number of customers will grow at an exponential rate, from 100 in 2020 to 1284 in 2026.
The year 2027 – 2031 will be the mature stage, the number of our customers grow at a slower rate. Meanwhile, we will gain a higher gross margin due to the increase of specialty and a lower SG&A cost.
For assumptions, most of the costs are calculated as a ratio of the sales revenue. Due to IBM’s leadership position in the current Blockchain-based solution industry, we use IBM’s 2018 income statement as the base of our assumptions related to operating costs.
Overall, the project starts to generate revenue for the second year after entering the market. The net margin keeps growing to reach 18.46% in the year 2031. Considering the initial investment, the project will break-even in the second year of the project. Any income left after that could be used to distribute it to the investors. Therefore, this project would be a great opportunity for the investors.
The project will be implemented using a waterfall approach for scheduling the whole project, along with a scrum framework for the software development phases. Additionally, we will engage internal and external stakeholders using various platforms such as social media, team meeting and walkthroughs, and use collaborative software such as Slack and Trello.
It will be the perfect time for the healthcare industry to implement a Blockchain-based solution, due to various existing strengths. Firstly, the health systems used by health institutions are moving towards consolidation, which enables more efficient integration. Secondly, a lot of the best-in-class start-ups are established in the United States, which gives very strong support to our project. Thirdly, the US government is also supportive and investing money to build AI and Blockchain solutions.
In the future, as the US healthcare industry is analogous to the EU healthcare market, we plan to enter the EU and partner with local vendors to gain their expertise. This will pave the way to really grow our business, to 200 billion dollars and save more lives.