Blockchain can significantly improve ERP systems by reducing security risks, and providing greater visibility and control to stakeholders.
Enterprise Resource Planning (ERP) is basically a unified platform that allows employees, vendors, suppliers, and other stakeholders to be on the same page while carrying out business operations. Though the term has only recently gained so much attention in the tech space, its history dates back to the year 1940s. Since then, the ERP system has evolved as and when new business requirements arose and technologies advanced. ERP systems are becoming every organization’s prime choice for operational control, execution, and excellence. Today, ERP systems are amalgamated with various new-age, sophisticated technologies like AI and IoT to advance their sophistication levels and benefit companies in terms of efficiency, control, and productivity. As these systems have now advanced and developed, it is better that organizations adopt these new-generation ERP systems to stand unique among their competitors.
When an ERP system is combined with AI, companies get a platform that is smart and intelligent to learn a situation and carry out tasks on its own. And when ERP systems are incorporated with IoT, it opens up a new wave of opportunities for companies to collect more relevant data, gain actionable insights from the collected data, and get complete control over business workflows. Another incredible combination, blockchain and ERP, is helping organizations to gain a secure platform for collaboration and workflow execution. Not only a secure consolidated platform, blockchain and ERP when fused, can bring in new opportunities for complete visibility. True that businesses are stepping up to to gain competitive advantage by adopting ERP integrated with cutting-edge technologies, but it is imperative that businesses know everything about a combination. While you may know the benefits companies gain when IoT and AI are combined with ERP, it’s time to comprehend the potential of ERP systems when they are powered with blockchain.
UNLOCKING THE POTENTIAL OF ERP SYSTEMS
Before we get into understanding how blockchain and ERP make the best pair for companies, let’s first take a quick look at the functionalities that ERP solutions offer, in general.
ERP solution is a business suite of applications that pull in all the project operations on a single platform, enabling increased visibility and control, streamlined operations, and enhanced optimization. In today’s technology-driven age of information, an ERP system enables companies to seamlessly plan and meet long-term business goals, proving to be an asset to almost every organization. Apart from the benefit of optimized and streamlined task completion, ERP systems offer functionalities that offer organizations advantages like:
1. Lower Expenses
An ERP system automates business processes, which means the hassle of maintaining paperwork and spending on more than one system goes out of the picture.
2. Complete Customization
One of the most incredible benefits of an ERP system is its ability to customize applications as per the requirements and demands of organizations.
3. Compelling Customer Service
With all the data available on a single platform, companies can better serve every customer who gets in touch with the sales team, whether for doubt clarification or information acquisition.
4. Streamlined Task Completion
Blockchain can provide greater visibility and control, allowing organizations to meet efficiency and accuracy goals.
MAIN CHALLENGES OF ERP SYSTEMS
Although there are plenty of benefits that follow ERP systems, there are a few disadvantages too. One of the worst nightmares for organizations is losing their sensitive data. As the ERP system houses sensitive business data and runs vital operations, there are high chances hackers might target and intercept the data from the ERP repository. The US Department of Homeland Security has already alerted organizations about the hacker craze for exploiting ERP systems. If hackers can exploit vulnerabilities in an ERP application, they can easily reach the central data repository and steal highly confidential data. Hence, it is of utmost importance that organizations take this problem into urgent consideration and come up with a full-proof solution to keep hackers away.
HOW BLOCKCHAIN CAN IMPROVE THE SECURITY OF ERP
Though the initial application of blockchain was for cryptocurrencies, this sophisticated technology is capable of offering plenty of other capabilities that are worth notifying. One spectacular feature of blockchain is cryptographic validation function, which holds enough power to curb the security issues. Hence, blockchain can be the right choice to fight hacking. To fix the issue, it’s important to know the weak points that allow hackers to enter in so quickly. The cloud-based service that stores, manages, and controls the data flow centrally in the ERP system is one of the most accessible paths from where hackers can make their way to carry out their nefarious activities. To manage the central data storage, there is involvement of third-parties, which is again a problem. All of these can be easily solved by blockchain!
The cryptographic function of blockchain is one of the key assets of blockchain, as mentioned earlier. The data stored in the blockchain ledger can only be viewed and accessed by authorized members who have the validation code. The code is basically a combination of both, public and private keys, and is difficult to hack. If the ERP system is blended with blockchain, every participant trying to view or access any information will have to enter the authentication code. Such firm security grip will make the nefarious actor’s job difficult and keep them away from the ERP system, to say the least. Besides, blockchain and ERP give clear visibility over business processes. The other benefits of integrating blockchain and ERP solutions are:
- Financial transactions can be carried out safely and transparently.
- The provenance of any product can be easily known with blockchain, which reduces the disputes that occur among stakeholders.
- The translational details, once stored, cannot be altered.
- With the use of smart contracts, organizations can even automate business processes, like payments, sending invoices, notifying authorities about the workflow execution, and so on, which will not only enable them to achieve performance excellence but also save a lot of time.
As mentioned earlier, the ERP application has evolved and advanced since its advent. 81% of companies have already leveraged an ERP solution for their business operations, which means that this trend is here to stay. While companies rely more on ERP systems, it is better that they follow the newest ERP trends that emerge in the tech space. Staying updated will help companies to make the most out of the technological innovation, streamline their business processes, run their ERP software at an optimum level, and most importantly to gain competitive edge. One such latest ERP trend is pairing the standard ERP with blockchain to enable enhanced data security, gain provenance details, and foster secure payment processes. The newest couple in the tech space, blockchain and ERP, in a nutshell, enables frictionless project execution against a collaborative landscape and also allows organizations to manage their resources and track business progress like never before.