It is believed that with the advancement of blockchain-based applications, the technology’s decentralized and distributed ledger protocol can help in enterprise resource planning (ERP), which refers to the integrated management of key business processes. According to Ultra Consultants, a business leadership consulting firm, the business value of blockchain is expected to exceed $176 billion by 2025 and exceed $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 US$1.90 billion in 2019 and is expected to reach US$24.94 billion by 2027 -dollar, at a compound annual revenue growth rate (CAGR) of 39.5%.
“Many companies use ERP systems to optimize their business processes. The combination of blockchain and ERP has the potential to eliminate the trust gap between siled ERPs while providing transparency throughout the system. Blockchain could be effective not only in terms of keeping records, but also for automating transactions through smart contracts,” Pratik Gauri, founder and CEO of 5ire, a blockchain-based platform, told FE Blockchain.
According to experts, blockchain-based ERP systems can help in data processing related to factors like creation, encryption, validation and distribution of valuable and immutable records, transactions, etc. As reported by Mipro, an electronics company, Fortune 500 and the global small and medium-sized enterprises (SMEs) and micro, small and medium-sized enterprises (MSMEs), they are expected to incorporate blockchain applications into their ERP systems.
“ERP as a process integrates various functions of an organization in an optimized way, while blockchain is a distributed ledger. Together they are able to provide a platform that offers privacy, security and automated processes. Also, they can work together to streamline database management frameworks,” said Prashant Kumar, founder and CEO of a cryptocurrency-focused platform.
Companies that have started adopting blockchain to expand their ERP or supply chain have reportedly included Walmart, IBM, Maersk, and FedEx. EOS Costa Rica, a software company, creates blockchain-based ERP solutions for any type of organization and provides resources for the EOSIO blockchain. Based on insights from ContenteraTechSpace, a tech blogging site, banks and insurance companies want to leverage blockchain-based ERP systems to ensure business-to-business (B2B) purchases and payments are automated and risk-free.
In addition, market-oriented research believes that both Bitcoin and Ethereum have delivered technical innovations in the development of blockchain-oriented ERP systems. According to International Data Corporation, a market intelligence-based company, 45% of industry leaders are expected to use blockchain as their primary technology for enterprise-wide transaction management.
“The blockchain and ERP integration enables the optimization of all business processes in numerous organizations. I believe blockchain-based ERP will be necessary for nearly half of the industry leaders to manage intra-enterprise transactions. Businesses that integrate with a blockchain-based ERP system can operate at their best and have the potential to generate higher profits in the long run,” said Rajagopal Menon, vice president of WazirX, a cryptocurrency exchange.
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