--- title: Good Applications for Smart Contracts in Capital Projects description: Inefficiencies like administrative drag, hidden costs and mistrust in capital projects can be solved with smart contracts image: https://blog.datagumbo.com/hubfs/AdobeStock_246627520-scaled-1.jpeg --- [![Data Gumbo](https://blog.datagumbo.com/hs-fs/hubfs/Imported%20sitepage%20images/DataGumbo_logo_EPS_png.png?width=150&height=45&name=DataGumbo_logo_EPS_png.png "Data Gumbo")](https://www.datagumbo.com/) - [Platform](https://www.datagumbo.com/platform) Show submenu for Platform - [GumboNet](https://www.datagumbo.com/platform) Show submenu for GumboNet - [Blockchain as a Service](https://blog.datagumbo.com/platform#baas) - [GumboNet Smart Contracts](https://blog.datagumbo.com/platform#smart-contracts) - [Network Effect](https://blog.datagumbo.com/platform#network-effect) - [Security & Compliance](https://blog.datagumbo.com/platform#security) - [ESG Reporting](https://www.datagumbo.com/platform/esg-reporting) - [Industries](https://www.datagumbo.com/industries) Show submenu for Industries - [Energy](https://blog.datagumbo.com/industries#energy) - [Oil & Gas](https://blog.datagumbo.com/industries#oilandgas) - [Supply Chain & Logistics](https://blog.datagumbo.com/industries#supplychain) - [Mining](https://blog.datagumbo.com/industries#mining) - [Construction](https://blog.datagumbo.com/industries#construction) - [ESG](https://blog.datagumbo.com/industries#esg) - [Manufacturing](https://blog.datagumbo.com/industries#manufacturing) - [Commercial Real Estate](https://blog.datagumbo.com/industries#realestate) - [Pricing](https://www.datagumbo.com/pricing) - [Company](https://www.datagumbo.com/about-us) Show submenu for Company - [About Us](https://www.datagumbo.com/about-us) - [Careers](https://www.datagumbo.com/about-us/careers) - [Contact Us](https://www.datagumbo.com/contact-us) - Resources Show submenu for Resources - [Blog](https://blog.datagumbo.com/en/gumbonet-blog) - [Press](https://media.datagumbo.com/en) - [Resource Library](https://www.datagumbo.com/resource-library) - [Platform](https://www.datagumbo.com/platform) Show submenu for Platform - [GumboNet](https://www.datagumbo.com/platform) Show submenu for GumboNet - [Blockchain as a Service](https://blog.datagumbo.com/platform#baas) - [GumboNet Smart Contracts](https://blog.datagumbo.com/platform#smart-contracts) - [Network Effect](https://blog.datagumbo.com/platform#network-effect) - [Security & Compliance](https://blog.datagumbo.com/platform#security) - [ESG Reporting](https://www.datagumbo.com/platform/esg-reporting) - [Industries](https://www.datagumbo.com/industries) Show submenu for Industries - [Energy](https://blog.datagumbo.com/industries#energy) - [Oil & Gas](https://blog.datagumbo.com/industries#oilandgas) - [Supply Chain & Logistics](https://blog.datagumbo.com/industries#supplychain) - [Mining](https://blog.datagumbo.com/industries#mining) - [Construction](https://blog.datagumbo.com/industries#construction) - [ESG](https://blog.datagumbo.com/industries#esg) - [Manufacturing](https://blog.datagumbo.com/industries#manufacturing) - [Commercial Real Estate](https://blog.datagumbo.com/industries#realestate) - [Pricing](https://www.datagumbo.com/pricing) - [Company](https://www.datagumbo.com/about-us) Show submenu for Company - [About Us](https://www.datagumbo.com/about-us) - [Careers](https://www.datagumbo.com/about-us/careers) - [Contact Us](https://www.datagumbo.com/contact-us) - Resources Show submenu for Resources - [Blog](https://blog.datagumbo.com/en/gumbonet-blog) - [Press](https://media.datagumbo.com/en) - [Resource Library](https://www.datagumbo.com/resource-library) ![Smart contracts can ease capital projects pain points such as distrust, productivity drag, and outmoded business processes. With the support of blockchain technology and Industrial Internet of Things operating field data, smart contracts automate payments, capture performance metrics, and reduce overall friction and costs. ](https://blog.datagumbo.com/hs-fs/hubfs/AdobeStock_246627520-scaled-1.jpeg?width=1280&name=AdobeStock_246627520-scaled-1.jpeg) # Good Applications for Smart Contracts in Capital Projects ![Michael Matthews](https://blog.datagumbo.com/hs-fs/hubfs/DataGumbo_hexagon_Michael.png?width=80&name=DataGumbo_hexagon_Michael.png) [Michael Matthews](https://blog.datagumbo.com/en/gumbonet-blog/author/michael-matthews) May 27, 2020 10:01:00 AM No industry is perfect. Each is plagued by its own unique set of circumstances — [or incentives](https://www.investopedia.com/articles/investing/020615/20-industries-threatened-tech-disruption.asp) for tech opportunists. In the capital project industry, a broad term enveloping building and infrastructure projects and investments, there are three major areas of informational and transactional friction that severely hamper progress. These inefficiencies include administrative drag, the hidden costs involved in multiple player projects and hardened mistrust between parties and project stakeholders. All three of which can be solved with technology. As a notoriously sluggish industry when it comes to adoption, we are often asked, where is the best place to start?  ### **Understanding Root Problems** Every capital project is a novel event that catalyzes relationships between numerous companies, vendors, suppliers, contractors, subcontractors and so on. Each event involves a new intersection of disjointed contracting models, disparate systems and outmoded paper-based document workflows. The administrative burdens associated with this manual work often involve spreadsheets, phones and faxes — work that’s time-intensive and error-prone. Multiply this paper workload along a full-scale project life cycle and it’s easy to understand the productivity drag. Laborious paper-based project approaches include significant financial consequences. Lack of a central information hub, coupled with the industry’s [cash flow challenges](https://constructionexec.com/article/tips-to-measure-and-maximize-cash-flow-in-construction-businesses), induce a waterfall-like cascade that makes it difficult to garner a clear financial picture of any project in real time. Combine this scenario with DSO metrics that regularly exceed 100 days and there is no easy cut path to clarity around costs. To further complicate money and workflow matters, mistrust is a standard business to business (B2B) operating characteristic. Without a single source of truth to provide visibility, transparency and connection, counterparties and project stakeholders get trapped in a blame game. Human emotions, hardened by fear and further exacerbated by lack of neutral data, force legal disputes and hefty back office admin work to eat into resources and skyrocket project completion times and [costs](https://www.globest.com/2019/06/14/construction-costs-increased-more-than-5-in-2018/?slreturn=20200118134400).  ### **Smart Contracts are the Answer** The good news is that there’s an answer to these pain points: [smart contracts.](https://wpblog.datagumbo.com/capital-projects-streamlined/) Backed by blockchain technology and Industrial Internet of Things (IIoT) operating field data, smart contracts are software programs that enable project participants to capture performance metrics, ensure contract obligations are fulfilled and automate payments.  As an immutable record of truth, blockchain solves the trust issue between project participants. This central source of neutral data gives visibility into productivity, schedule and safety necessary to alleviate the administrative paper-based workflow responsible for disjointed systems. And lastly, by automating payments the transactional delays and friction associated with the layers of participants can transform, reducing friction and costs.  ### **Looking to Implement** Varying contracting models lend themselves to smart contracts: cost-reimbursable, lump sum, performance-based and linear construction contracts to name a few. Any approach where incremental progress can be measured, automated and executed is a candidate. The most applicable use cases for smart contracts are where parties can be defined, terms agreed upon and payments set to automatically transact. – To find out more about leveraging smart contracts to eliminate transactional waste in capital projects, **[register here for our upcoming webinar “Crush Transactional Waste”](https://offers.datagumbo.com/capital-projects-webinar)** presented with [PrairieDog Venture Partners](https://www.os2jv.com/) on June 24. Share on: [Share on Twitter](https://twitter.com/intent/tweet?url=https://blog.datagumbo.com/en/gumbonet-blog/good-applications-for-smart-contracts-in-capital-projects&text=I+found+this+interesting+blog+post) [Share on Facebook](https://www.facebook.com/sharer.php?u=https://blog.datagumbo.com/en/gumbonet-blog/good-applications-for-smart-contracts-in-capital-projects) [Share on LinkedIn](https://www.linkedin.com/shareArticle?mini=true&url=https://blog.datagumbo.com/en/gumbonet-blog/good-applications-for-smart-contracts-in-capital-projects) Tags: [Data Gumbo](https://blog.datagumbo.com/en/gumbonet-blog/tag/data-gumbo) [Construction](https://blog.datagumbo.com/en/gumbonet-blog/tag/construction) [Smart Contracts](https://blog.datagumbo.com/en/gumbonet-blog/tag/smart-contracts) You may also like ![](https://blog.datagumbo.com/hs-fs/hubfs/082020105934.jpg?width=630&name=082020105934.jpg) ![](https://blog.datagumbo.com/hs-fs/hubfs/082020105934.jpg?width=630&name=082020105934.jpg) Creating Efficiency in Capital Projects with Smart Contracts ![](https://blog.datagumbo.com/hs-fs/hubfs/pexels-oleg-magni-2058136_DG.jpg?width=630&name=pexels-oleg-magni-2058136_DG.jpg) ![](https://blog.datagumbo.com/hs-fs/hubfs/pexels-oleg-magni-2058136_DG.jpg?width=630&name=pexels-oleg-magni-2058136_DG.jpg) Getting Rid of Fuzzy Financials and Finding Transactional Certainty [![Data Gumbo Logo](https://8433262.fs1.hubspotusercontent-na1.net/hub/8433262/hubfs/DataGumbo_logo_final_darkText.png?width=150&height=59&name=DataGumbo_logo_final_darkText.png "Data Gumbo Logo")](https://www.datagumbo.com/) [Data Gumbo Corporation 600 Travis Street Suite 5050 Houston, Texas 77002](https://goo.gl/maps/FKnPG5Rhzg9ZQuie6) ##### Platform - [BaaS](https://blog.datagumbo.com/platform#baas) - [Smart Contracts](https://blog.datagumbo.com/platform#smart-contracts) - [Network Effect](https://blog.datagumbo.com/platform#network-effect) - [Security & Compliance](https://blog.datagumbo.com/platform#security) - [ESG Reporting](https://www.datagumbo.com/platform/esg-reporting) ##### Resources - [Blog](https://blog.datagumbo.com/en/gumbonet-blog) - [Press](https://media.datagumbo.com/en) - [Resources](https://www.datagumbo.com/resource-library) - [Knowledge Base](https://knowledgebase.datagumbo.com/knowledge) ##### Let's Connect - [Book a Demo](https://www.datagumbo.com/book-demo) - [Login](https://demo.datagumbo.com/login) - [Support](https://knowledgebase.datagumbo.com/knowledge) - [Contact Us](https://www.datagumbo.com/contact-us) - [info@datagumbo.com](mailto:info@datagumbo.com) [Follow us on Facebook](https://www.facebook.com/datagumbo/) [Follow us on LinkedIn](https://www.linkedin.com/company/data-gumbo/) [Follow us on Instagram](https://www.instagram.com/datagumbo/) [Follow us on Twitter](https://twitter.com/datagumbo) © 2026 All rights reserved. | [Privacy Policy](https://blog.datagumbo.com/privacy-policy)