Blockchain as a resource; how the technology can bring about a new definition of Enterprise Resource Planning
As blockchain-based applications evolve it is believed that technology’s decentralised and distributed ledger protocol can help with enterprise resource planning (ERP), which refers to the integrated management of main business processes. According to Ultra Consultants, a business management consulting firm, business value addition of blockchain is expected to exceed $176 billion by 2025, and will go past $3.1 trillion by 2030.
Insights from Fortune Business Insights, a market research-based company, showed that the global blockchain-as-a-service (BaaS) market size stood at $1.90 billion in 2019 and has been projected to reach $24.94 billion by 2027, at a compound annual growth rate (CAGR) of 39.5%.
“Many companies use ERP systems to streamline their business processes. Blockchain and ERP combination carries the potential to eliminate the trust gap between siloed ERPs while providing visibility throughout the system. Blockchain could be effective not only in terms of record keeping but for automating transactions through smart contracts,” Pratik Gauri, founder and CEO, 5ire, a blockchain-based platform, told FE Blockchain.
According to experts, blockchain-based ERP systems can help process data in terms of factors such as creation, encryption, validation, and distribution of valuable and unchangeable records, transactions, among others. As reported by Mipro, an electronics company, Fortune 500 and the global small and medium enterprises (SMEs) and micro, small and medium enterprises (MSMEs) are expected to make the addition of blockchain applications into their ERP systems.
“ERP as a process integrates different functions of an organisation in a streamlined way, meanwhile blockchain is a distributed ledger. Together, they are capable to provide a platform that offers privacy, security and automated processes. Also, they can work together to optimise database administrative frameworks,” Prashant Kumar, founder and CEO, a cryptocurrency-oriented platform, said.
Reportedly, companies which have started to inculcate blockchain to augment their ERP or supply-chain, which include Walmart, IBM, Maersk, and FedEx. EOS Costa Rica, a software company, creates blockchain-based ERP solutions for any kind of organisation and provides resources to the EOSIO blockchain. On the basis of insights provided by ContenteraTechSpace, a technical blogging site, banks and insurance companies aim to utilise blockchain-based ERP systems to ensure that business-to-business (B2B) purchases and payments are automatic and risk-free.
Moreover, market-oriented research believes that both Bitcoin and Ethereum have provided technical innovations in the development of blockchain-oriented ERP systems. According to International Data Corporation, a market intelligence-based firm, 45% of industry leaders are expected to use blockchain as the primary intercompany transaction management technology.
“The blockchain and ERP integration allows for the optimisation of all business operations across numerous organisations. I believe blockchain-based ERP will be necessary for managing intercompany transactions for almost half of industry leaders. Businesses that integrate with an blockchain-based ERP systems can perform optimally, and carry the potential to earn higher profits in the long run,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, highlighted.
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