Blockchain is a promising technology for ERP companies because it can be used to record of every step (in a block) in a given business process for example Purchase business process. It enhances existing features of enterprise resource planning software in many functional areas.
For any business application such as finance, operations or logistics, blockchain technology helps.
Blockchain’s ability to execute actions that include identification and verification of the parties such as customers and employees makes it superior to other technologies.
The blockchain address is a public key and the authentication of every transaction and time-stamping of blocks is stored in a chain.
Integrating blockchain smart contracts to ERP Puchase module
The role of Smart Contracts to manage the multi-step process of executing purchase orders is immense.
What is smart contract ?
Smart contracts are lines of programming code or programs or computer code with a predefined set of rules (rules of a transaction) that are stored on a block chain.
To know how Ethereum Virtual Machine work, see here.
The smart contract code automatically runs when predetermined terms and conditions are met by parties to the smart contract. The code in the smart contract facilitates, verifies, and enforces the agreement or a transaction.
Smart contracts are accessible through web browser and is verified by each node in the network checking both sides of parties. If network agrees, that all conditions are true, transactions happen in both sides.
By integrating smart contracts on the blockchain to ERP software purchase module, procurement process becomes more efficient and importantly transparent.
Enforcing contracts becomes possible in the following areas.
- Stocks can be replenished when required automatically by enforcing smart contracts.
- Authentication of inventory purchases happens automatically from a new supplier without negotiations and without wasting time.
In case of international trade between parties, Blockchain plays an important role expecially when there is a solid contractual agreement, clearly defined rules and importantly, a transaction involves an exchange of value.
By using the smart contracts, many business processes activities in the ERP could be automated and efficiency is achieved.