ERPs are undoubtedly a necessity for smooth business operations. An ERP program houses a suite of different tools (ranging from HR to accounting and more) integrated together to ensure easy flow of information across all departments of a workplace While two companies transact and interact with one another, their separate ERPs should communicate with one another.
However, there is a growing need of blockchain integration with ERPs today to take the existing ERP programs to the next level and for better.
The new paradigm of smart contracts
Smart contracts herald the latest revolution in the accounting sphere. What is meant by smart contract? Well, it’s a unit in business logic which is executed through consensus on blockchain. It presents a novel approach to execute business logic that will replace and enhance some of the functionalities of existing ERP systems. It’s to stress here smart contracts serve as shared source for truth as well as veridical execution environment that helps to automate interactions- that previously needed several parties or groups to trust one another.
Smart contracts generally require 2 or more groups to come to an agreement (individually) about a series of parameters. A good example would be standardization of a haggling process regarding price of a good, the payment method and delivery terms. Now, these parameters get recorded as codes of smart contract. Once activated, this smart contract will perform on the basis of rules decided upon by the involved parties. The entire process will flow on the basis of smart contract parameters.
Streamlining of accounting
When multiple parties agree on automating business processes via smart contracts, these parties can easily streamline accounting operations. All the transfers that are executed through smart contract get recorded on blockchain and that too in an easily comprehensible structure. Additionally, smart contract can hold supplemental data regarding transfers which take place in shared business processing. It enables multi-stakeholders easy visibility of transfers as well their supplemental information on blockchain.
Companies that count on blockchain for automating varied processes regarding sale of products, would store associated transfers and supplemental information on every transfer in some uniformly designed smart contract. As the data would be standardized, it would help to automatically categorize every transfer. Normally, a bookkeeper analyzes every transaction and categorizes them for a precise representation in the financial reports like balance sheet. But, since the blockchain technology can aggregate transfers as well as include information reflecting its very purpose- it will help streamline and automate the role of bookkeeper to a great extent. It will help to create a trusted shared process in between several transacting parties which will enable every party to build self-generated financial reports.
Now, to make this interaction seamless, companies should perform transaction via digital assets. For example, say company “A” has to buy goodies from vendor “B” via “shared business processing” created between them. In that light, “A” should pay via digital asset while “B” should be flexible to accept digital asset as well as send asset-backed token.
Zygot presents blockchain and smart contract-based ERP
From the above discussion, it’s clear that introduction of blockchain and smart contract into ERPs will prove to be highly beneficial for user-businesses.
Top ERP company Zygot has come up with a blockchain EOS-powered decentralized open-source, community oriented and modular ERP engine called “ZERP”. ZERP’s Ethereum based operative system, it’s decentralized structure as well as possibility to deploy smart contracts make it highly potent to solve the typical problems plaguing the current ERP scene. These include a closed rigid market system, high costs and data vulnerability.
Open-source fair marketplace
Thanks to its open-source nature, the ZERP portal can be maintained and updated by independent software teams. Such facilities are not possible with existing ERP scene where the market is dominated by the monopoly of a few dominant ERP providers and implementers. Such monopolistic tendencies force the ERP users to get their ERP implemented/updated/maintained from some set ERP companies and pay whatever they ask for.
But ZERP changes that with its decentralized nature and smart contracts. It allows users to post job on a dashboard and also post the number of token they are ready to pay for the job. Independent ERP implementer teams can check the job post and compete for the job. Users get a wide range of options to choose the most compatible one for them- based on the team’s ratings and their job budget. The participant teams also need to freeze a certain number of tokens before they set out to perform the job.
Smart contracts will enable distribution of tokens to these teams on completion of the task. But the teams will only get the tokens if they are able to perform the job correctly and with the desired quality. If not, the underperformed teams will receive negative ratings and also won’t get the frozen tokens back. Such a system will allow ERP users to enjoy a fair marketplace and keep their costs low.