What Even Is “Blockchain”?
Blockchain is one of those buzzwords a lot of us hear but don’t totally understand.
Picture a spreadsheet that is duplicated thousands of times across a network of computers and imagine that this network is designed to regularly update this spreadsheet. This should give you a basic understanding of blockchain technology.
Blockchain is an innovative type of technology that allows digital information to be distributed but not copied. Each digital record or transaction in the thread is called a block and it allows either an open or controlled set of users to participate in the electronic ledger. Each block is linked to a specific participant. Blockchain can only be updated by consensus between participants in the system and when new data is entered, it can never be erased.
It was originally created for digital currencies like Bitcoin and Ethereum as a secure, anonymous data storage and management facility that was not controlled by a central authority like a bank or government agency. In the last few years, its value and use has expanded beyond cryptocurrencies and into many other applications. We predict that blockchain will be adopted for routine business transactions and data at some point in the foreseeable future.
What Does Blockchain Technology Have to do with ERP Systems?
Blockchain is an additive technology, meaning its primary purpose is to support and strengthen other technologies and systems. The maturation of blockchain and its growth beyond the boundaries of cryptocurrency has created enormous opportunities for its use within other systems, like ERP software. ERP vendors like Acumatica, are working to integrate the distributed ledger technology with their systems to strengthen the integrity and automation of supply chains.
Within ERP systems, blockchain has the potential to unite a large supply chain network using a decentralized system. Together, blockchain and ERP provide a trackable, immutable record for everything from shipping manifests and supply chains to equipment maintenance and dispute-resolution systems. This would mean businesses could maintain their own internal ERP system, while joining one rule-enforced blockchain network.
How Will Blockchain Effect ERP Software?
The integration of blockchain technology and ERP software has several clear advantages to business-owners. First, using the two in tandem allows for increased visibility throughout the supply chain. Each member of the chain can trace a product’s journey from the manufacturing floor to the retailer’s shelf, helping to eliminate product diversion and counterfeiting.
This increase in visibility also enforces authenticity in the manufacturing and distribution industries, facilitating trust between members of the supply chain. Most companies have a set of processes and people they trust, which includes their own ERP system. But that trust doesn’t always extend to other companies in the supply chain. Without trust between members of the chain, inefficiencies and poor practices can begin to present themselves. With the visibility created by Blockchain throughout the supply chain, trust gaps between disconnected members can be bridged and reconciled.
The future is bright for supply chain management and cooperation among key players. By keeping a shared system of records for inter-company transactions, together ERP software and blockchain can change the industry for the better.
New technologies like blockchain cannot be ignored. In this digital age, you can lead, follow, or get out of the way and let your competitors take away your business advantage. When it comes to blockchain and ERP integration, down the line blockchain-connected ERP systems will offer the best supply chain management option for most companies.
At Aqurus, we know how valuable the Acumatica ERP software is for businesses and we are more excited than ever for what the future holds for this technology.
If you’re interested in how Acumatica’s Cloud ERP Software can advance your business in 2019, the Aqurus team is passionate about streamlined implementation and ongoing support. Reach out to us to find out more!