Designing a blockchain-based information system for procurement processes - Balancing decentralization, scalability, and security while maintaining privacy

The inter-organizational processes in procurement remain burdened by media discontinuity, inefficiencies, and a lack of trust among trading partners. Blockchain-based information systems are frequently proposed as a remedy because they enable shared, tamper-evident records. However, existing instantiations rarely scale beyond small consortia because they fail to address the extended blockchain trilemma, which requires simultaneously achieving decentralization, scalability, security, and strict privacy requirements for sensitive commercial information. In contrast to prior blockchain procurement prototypes that manage the extended blockchain trilemma primarily through permissioned architectures, this study investigates how a blockchain-based information system can be designed to reconcile the trade-offs inherent in the extended trilemma, achieving a viable balance through architectural allocation and cryptographic enforcement. Following the design-science research paradigm, an empirically validated problem statement is synthesized from a structured literature review and expert interviews. Five design objectives are derived, evaluated, and used to guide a prototype design, which is then iteratively refined and evaluated through quantitative and formative assessments and sixteen semi-structured expert interviews. Reflection on the build–evaluate cycles yields two design principles: (1) Balancing decentralization, scalability, and security by using a public chain as a trust anchor, a Layer 2 for scaling, and decentralized communication between layers. (2) Maintaining that balance when privacy is required by integrating efficient, resilient cryptography and minimizing control points. These principles extend existing procurement research, linking business requirements to infrastructural choices, providing a transferable foundation for scholars and practitioners aiming to deploy secure, scalable, and privacy-preserving blockchain solutions in inter-organizational contexts.