15 Feb 2022
In the world of the digital era, technology is rapidly maturing and opening new possibilities. It pushes businesses to unlock potential benefits and gain competitive advantages. Enterprise Resource Planning (ERP) solution, a technological trend these days, has been leveraged with many separated systems and advanced technologies. On top of that, Blockchain technology has seen its promising future and several adoption chances in various industries. Let’s take a quick look at the integration of Blockchain into ERP systems and how it can facilitate businesses.
What is Blockchain Technology?
According to Investopedia, Blockchain is a type of shared database that stores information and data in blocks linked together via cryptography.
Blockchain technology was first proposed as a research project in 1991 and utilised in 2009 for bitcoin. Back from that day till now, the use of blockchains has exploded in many other technology platforms. For example, cryptocurrencies, decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts.
Known as a Distributed Ledger Technology (DLT), blockchain works to enable digital information to be recorded and distributed; however, not edited. In other words, a blockchain is considered as the foundation for immutable ledgers, or records of transactions that cannot be altered, deleted or destroyed.
Blockchain Technology in ERP System
In this experimental phase of technology, any integration amongst systems is an incentive. Already, there are numerous benefits from ERP software. Now that the system comes with Blockchain, it can push those existing benefits to another level.
Automation feature is a must-have of ERP systems. Integrating with blockchain will strengthen ERP system’s level of automation. The ability to create smart contracts is typical evidence. Smart contracts, in fact, are computer protocols that can automatically verify and enforce contracts using digital codes. Businesses, hence, do not need to hire a legal department or a third party to do this task.
In addition, one of blockchain’s advantages is to validate transactions and generate a fixed record of data shared among various nodes in real-time. This means that every transaction, even intercompany transactions, will be visible and traceable to relevant stakeholders and departments. Therefore, blockchain in ERP systems will add more transparency and traceability for businesses.
Blockchain can also be used for the verification and authentication of identities. The technology utilises digital signatures based on public-key cryptography and an automatic check of the correct private key. Businesses, thanks to this, can reinforce security to verify personnel who have access to credential information. Moreover, blockchain can offer ERP systems encryption, validation, and decentralisation. These technologies ensure to prevent data leakage by detecting suspicious attempts of unauthorised access and other security threats in real-time.
Last but not least, blockchain can transform ERP systems into robust system models with flexibility. The technology offers extensive, configurable and flexible customisation platforms such as -Hyperledger, R3 Corda, Enterprise Ethereum Alliance, Quorum, Ripple, etc. This will enable enterprises to use the systems flexibly to shape their requirements and quickly adapt to ever-changing business scenarios.
Conclusion
ERP providers have realised the impacts of blockchain technology, which potentially transforms how modern businesses operate. So far, ERP systems are the main focus of individual enterprises, while blockchain integration adds more flexibility. The integration between ERP solutions and blockchain technology will empower businesses frictionless to function in a unified ecosystem and allow them to control their resources and growth far better.
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