Blockchain, ERP, and Innovative Solutions

Over the years, the industry of ERP has made its money by selling integrated applications to manage the internal processes of an enterprise. Irrespective of whether front-end or back-end functions, the application always has been restricted to internal operations only. Even though, most of the businesses work in the ecosystem (of its partners as well as vendors), as the economy evolves further, the collaboration of numerous companies becomes quite essential.

But, at present none of the ERP vendors offer a complete set of solutions to automate external processes. Before discussing the integration of the blockchain into ERP, let's discuss which is that barrier that often separates the similar internal and external business processes of the organization.   

A Matter of Trust: 

Let us consider this scenario – Suppose your company comprises numerous vendors in its ecosystem and its ERP offers well-secured screens, particularly designed for arranging business operations such as delivering or buying of goods/services, approving of invoices, and much more. Assume that, your company and one of the vendors got involved in a legal dispute, and you produced the contract’s specifics in front of the law. Do these proofs hold validation? Perhaps, never as everyone will think that this evidence can be easily produced by your company’s ERP system!

Then, what’s that key aspect which is holding back the businesses from adopting the external automation for years? It’s lack of trust! However, the companies can easily tackle this obstacle by incorporating blockchain within an ERP as it offers a distributed ledger that is available to every member across the network. Furthermore, being an open source, blockchain technology makes altering or modifying any of the record incredibly difficult, which makes it secured and transparent application.

Why Can’t Utilize Digital Signatures?

Whenever we think of creating legally enforceable digital transactions, the utilization of digital signatures comes into the mind as they hold legal significance in most of the countries. However, in reality, the digital signatures are rarely incorporated into an ERP since they required to obtain and store public/private keys to each of its users. In case, more than one party involved, then the concerns related to privacy, cost, scalability, and usability arise immediately. 

However, here the Fast ID Online comes as an aid! Even though the key purpose of FIDO is to solve the digital signature authentication issue, it can be further utilized to sign any kind of business transaction. It might facilitate the vendor to digitally sign any transaction with other party’s ERP through facial recognition or fingerprint scanner without encountering any kind of inconvenience.

How Blockchain Can Help?

If the alliance of digital signatures and FIDO authentication devices serve the purpose, then why we need the blockchain technology? Because, even though the transaction with digital signature cannot be altered without being detected, however, it can still be eliminated without any trace. All it means, the digitally signed transaction which has been stored in a particular place that’s retained by one of the interested parties does not hold validity in terms of legal context. And, this is where the blockchain comes into the picture as it offers one of the most outstanding features, i.e. Hyperledger Project, which enables each member across the blockchain to reserve one node for itself and store its own copy related to every transaction. As a result, the member is empowered to protect the documents and produce them whenever required, even though the other parties eliminate or alter their own records.

According to the industry experts, the incorporation of blockchain technology in ERP products can completely transform the present structure of ERP industry by permitting each member of a business ecosystem to preserve own copies of transaction records at an economical expenditure. Also, it will allow the ERP to focus on automating each aspect of the entire business process. Some of the large firms are already started integrating blockchain-backed solutions into their business model and embrace numerous small-scale companies within their ecosystems as partners. Also, prominent cloud service providers are offering the ideal platform which lets its customers to develop, run, and manage various applications without building and maintaining of the physical infrastructure. Adding to this, the combination of blockchain and ERP will surely provide a separate node, however, every term and condition, process flow, and interaction well-suitable for the requirements of a particular project. 

Take Away         

Earlier, when the companies usually depended on their own internal solutions for workplace functions such as HR, Payroll, and others as the adoption of ERP was not widely accepted due to the technicalities and the cost involved in its implementation. At present, blockchain stands in the similar position, as most of the bigger companies think that automation of external processes and developing their unique indigenous solutions requires huge amount of investment. However, if the current ERP vendors come forward and start delivering blockchain-backed solutions such as SaaS offerings along with process flows and smart contracts as a fundamental component of an ERP, then it would be really great!!!

About Author: Sandy is working in NSS A leading Outsource Application Development Company and AWS Solution Providers Right now I am working on blockchain web app development project. So I do research, write and share some updates about blockchain. I hope you may like this article. Please share your views in comment.

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Created on Apr 2nd 2019 01:15. Viewed 413 times.

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