Could Public Blockchains Help ERP Systems?
I'm sure you've heard someone say that the solution to every technological problem or problem with banking, investing, and even cryptocurrency is Blockchain.
Everyone believes that the new kid of the block, blockchain, will help solve all the problems related to technology. The word is passed on as a healing ointment that when sprayed on any technological problem, it is solved.
Many have even touted that Blockchain could replace the hugely popular and efficient system as the ERP system.
Today, we will seek to understand how ERP and Blockchain systems work. And we would also be looking at the possibility of how Blockchain integration could help the ERP system.
What is Blockchain?
If you are fairly familiar with the crypto industry, then one of the terms that you should be fairly familiar with is Blockchain.
Blockchain operates in the way we understand the functioning of a "block" and a "chain." But, in the context of its use in technology, "block" deals literally with information while the "string" acts as a database. Put together; they refer to "information stored in a database".
Now imagine a public database that, at the same time, records information in a way that it is almost impossible for you to mess with the system, hack the system, or even cheat the system. Sounds intriguing, right? Exactly, this is how Blockchain works.
In simple terms, Blockchain works as a uniformly distributed (decentralized) system. It keeps track of all digital transactions that take place on its network. And it distributes this information to all computers that may be operating on its platform.
In the absence of a definition, let's say that Blockchain is a digital system that records information in its database in a way that makes it difficult and almost impossible for stored information to be manipulated.
Essentially, the "blocks" contain information such as date, time, value, a unique username for the parties involved in the transaction, and a unique code that helps differentiate each block.
When this information is stored on the Blockchain, it is widely available for the public to see.
Understanding ERP systems
Enterprise resource planning (ERP) is a system that many organizations use to manage and integrate essential parts of their business.
Organizations generally find this system invaluable as it enables them to integrate all the essential components to run their business in one system.
This ERP system allows the company to carry out functions such as sales, marketing, human resources, inventory, and a number of other tasks.
Over the years, this ERP system has evolved into a website and allows many users to access their applications remotely.
How can a public blockchain help ERP systems?
Blockchain has undoubtedly altered the functioning of many industries. Industries like banking, governance, supply chain, etc. have modified their business models with Blockchain.
Considering the efficiency and ease of use these industries have seen, many have called for Blockchain to replace ERP. Some have even gone ahead to label the system as obsolete with the speed at which the digital world has evolved.
The truth is that ERP has some shortcomings that Blockchain could help improve. We will discuss some of the shortcomings and how Blockchain can help improve it below:
Blockchain can help improve transparency
One of the rods used to beat ERP these days is the level of processes and the number of complications that arise when using the system. The graphics used in the system can be laborious, challenging, and very difficult to understand its functionality.
This has made the system unattractive to some companies.
However, if Blockchain is integrated with the system, it would guarantee very high transparency and visibility of its main functions. The use of Blockchain will allow companies to be able to track all their activities in real time.
For example, if Blockchain is integrated into the ERP of a company that manages a supply business, the company can use the blockchain functions to register its products and know their quality and locations throughout the period that the product could be in transit. .
Blockchain can be integrated into ERPs to perform the authentication processes of the system. Usually, before you can access the ERP system, you are expected to have the login details and other relevant information that will allow you to access the platform. If this information falls into the wrong hand or into the hands of your business competitors, then your business dealings and activities will be compromised.
However, if Blockchain is integrated with ERP, features like biometric authentication and a multi-factor authentication process can keep unwanted people away from the ERP platform.
This feature would allow the company to authenticate its workers at all times during their working hours, and they can be sure that the right people have access to the correct level of information.
Businesses can also use this to authenticate their customers, which in the long run can help them tailor their services and products to customer preferences.Automated processes and lower risk in transactions
With Blockchain, businesses can ensure that all of their digital transactions carry little to no risk.
Although some ERP systems can offer transactions to their users, the level of security in it cannot be compared with what would be available if Blockchain is integrated with the platform.
ERP has had previous problems with hackers attacking its centralized database and hacking a transaction; Blockchain and its characteristics would prevent this scenario from happening again.
Not only that, the blockchain integrations would come with smart contracts that can be programmed to automate transactions once a set of rules that the system administrator (company) could have decided on.
As soon as the rules are met, the contract can be automated to automatically initiate and carry out those transactions.
In conclusion, the integration of blockchain in ERP systems would help to rapidly develop the system and allow it to carry out functions that were previously believed impossible.
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