The blockchain is having quite a moment, having emerged from its prior position as an underlying architecture supporting cryptocurrency transactions into an incredibly hyped technology that industry analysts predict could be applied to a variety of use cases, including contract management, real estate transactions, and the supply chain. Businesses are beginning to evaluate how they can apply blockchain successfully to their enterprise resource planning (ERP) platforms to improve the accuracy, efficiency, and transparency of transactions. Here’s how companies are already using blockchain with their ERP systems and what it might tell us about where this hot technology is headed. 

Blockchain, ERP, and Supply Chain Transparency 

Because blockchain is, in essence, a mutually distributed ledger of transactions, it’s not difficult to see how it could play a role within an ERP system. Major ERP system providers are already taking note, beginning to experiment with blockchain within their platforms.

One company was able to use this technology to improve transparency within the diamond supply chain, which is of critical importance for an industry that faces human rights concerns involving the provenance of conflict diamonds originating from war-torn countries in Africa. 

How Blockchain Creates Trust in the Supply Chain 

One of block chain’s most compelling features is its ability to create an architecture of trust. This feature was a fundamental necessity when creating a cryptocurrency such as bitcoin, of course, and it can also play a role in other kinds of transactions that rely on a high degree of trust to be viable. Businesses that face scrutiny over environmental or human rights concerns associated with their supply chains, for example, may find blockchain integration with their ERP systems to be of particular benefit in the future. 

Because blockchain ledgers are able to register detailed information about the transfer of goods (such as the price and date of a transaction) and identify the suppliers involved at each stage in the process, a company could choose to make its ledger publicly available to interest groups that demand greater transparency into the company’s supply chain. In addition, blockchain ledgers cannot be altered or tampered with because no single party owns an authoritative copy, so those interest groups could have greater confidence that the ledger they’re viewing provides a complete and unaltered view into how the supply chain operates. The blockchain is also notoriously difficult to hack, having originally been designed to support bitcoin transactions, so this adds an extra level of trust and confidence. 

Although blockchain is clearly still a leading-edge (some would say bleeding-edge) technology for many use cases, including ERP, it holds considerable promise for companies that want to run their operations more efficiently and achieve greater transparency. If your company uses an ERP system, it may well be worth keeping your eye on how early adopters use blockchain with ERP to determine how you might benefit, as well. One thing’s for sure: With the enormous hype surrounding the technology, industry interest in blockchain is unlikely to die down anytime soon. In fact, it looks like it’s only just started to take hold.