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Enterprise Resource Planning (ERP) is a widely used terminology to collaborate multiple departments onto one platform, manage finance and accounting, payrolls and statutory compliances for companies. Block chain technology known as distributed ledger allows sharing of information between multiple computers without having a centralized platform to maintain the highest security.
So what does it look like when both are integrated? It will result into mapping, linking and accessing the transaction between two parties or manage the supply chain process without having to fear the breaching of information.
Also Read: How blockchain can revolutionize ERP?
The operation of blockchain lies within the bitcoin network, which is decentralized. Therefore, whenever a new transaction occurs, it is important to validate it in order to avoid the risk of excessive spending. To explain the block chain technology, let’s take an example of food industry. The supply chain of the food industry is very complex and it is difficult to track food-borne illness from farmers to grocers. Blockchain technology can help here. It can help in identifying the contaminated food throughout the supply chain resulting into improved efficiency and transparency. For another example, let’s talk about the finance sector. Regular SMS and emails are circulated among users warning them not to share their bank details with anyone and the major reason behind this is to avoid frauds. Due to banks using centralized systems, they are more prone to cyberattacks. It is highly risky because if the hacker cracks the code to access one system, he gains access to all the other. The distributed ledger is made up of blocks containing a timestamp that holds individual transaction batches with a link to a previous block. This technology, therefore can contribute efficiently in putting down the current cybercrimes.
ERP systems are used by multiple industries – banks, healthcare, food and beverage, e-commerce, retail, etc. It helps companies manage their accounts, finances, supply chain, human resources and such other departments through a unified platform. When multiple departments require to access common data, verbal communication can result in the partial loss of information resulting into productivity loss and no or less profit booking. With an ERP system, multiple departments can be collaborated together to generate data accessible by different teams in real-time from anywhere. But, in this case, how do you protect the information that is not public and requires to be kept confidential, yet shared between some parties? This is when the ERP integration with blockchain technology works wonders where the data can be shared between two parties (here computers) to be accessed by trustworthy individuals but this data cannot get copied.
Also Read: ERP and Cybersecurity
Companies using ERP systems can be benefited with blockchain integration to manage their finances, keep inventories in check, track supply chain and perform high-end transaction without having to worry about security or cyberattacks. In order to create more transparent, secure and seamless experience, 90% banks from North America and Europe are investing in blockchain technology.
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