Blockchain as a Resource; how technology can give a new definition of Enterprise Resource Planning
As blockchain-based applications develop, it is believed that the technology’s decentralized and distributed ledger protocol can help with enterprise resource planning (ERP), which refers to the integrated management of key business processes. According to Ultra Consultants, a business management consulting firm, the value addition of blockchain is expected to exceed $176 billion by 2025, and will surpass $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 was $1.90 billion in 2019 and has been projected to reach $24.94 billion by 2027, to a compound annual growth rate (CAGR) of 39.5%.
“Many companies use ERP systems to streamline their business processes. Blockchain and ERP combination has the potential to eliminate the trust gap between siled ERPs while providing system-wide visibility. Blockchain can be effective not only in terms of record keeping but also in 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 immutable records, transactions, among others. As reported by Mipro, an electronics company, Fortune 500 and global small and medium enterprises (SMEs) and micro, small and medium enterprises (MSMEs) are expected to add blockchain applications to their ERP systems.
“ERP as a process integrates different functions of an organization in a streamlined way, while blockchain is a distributed ledger. Together they are able to provide a platform that offers privacy, security and automated processes. They can also work together to optimize database administrative framework,” said Prashant Kumar, founder and CEO, a cryptocurrency-oriented platform.
Companies that have begun incorporating blockchain to expand their ERP or supply chain are reported to include Walmart, IBM, Maersk, and FedEx. EOS Costa Rica, a software company, creates blockchain-based ERP solutions for all types of organizations and provides resources for the EOSIO blockchain. Based on insights from ContenteraTechSpace, a tech blogging site, banks and insurance companies are aiming to use 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 optimization of all business operations across a variety of organizations. I believe blockchain-based ERP will be necessary to manage intercompany transactions for nearly half of the industry leaders. Companies that integrate with a blockchain-based ERP system can perform optimally, and carry the potential to earn higher profits in the long run,” emphasized Rajagopal Menon, Vice President, WazirX, a cryptocurrency exchange.
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