Blockchain is often associated with cryptocurrency but organizations in every industry are experimenting with how to use the technology for smart contracts, procurement, supply chain, payments and other applications.
What is Blockchain?
Simply put, Blockchain is a platform where transactions can be made and recorded on a secure digital ledger. Differing from the traditional technology which is based on a centralized ledger, Blockchain uses distributed ledger technology, preventing a single point of failure or fraud. It also eliminates the need for a third party to authenticate the data.
All computers in the Blockchain network, stores and verifies the data that is sent with every transaction. New data that is created or added is linked to the previous one, and all the users are notified of the same. Once information is added to the block, it is impossible to alter the data, making transactions secure and visible across the network.
Blockchain as a distributed ledger technology promises faster secure payments, improved efficiency, greater transparency, reduces costs and cases of fraud. Blockchain technology has endless possibilities, which when applied to any industry vertical will change the way a business operates.
Procurement is one of the many business processes that has opened itself to using Blockchain technology. An otherwise manual and cumbersome process, it views Blockchain technology as a means to improve the way goods are procured across industries. Here’s are the key elements that makes Blockchain technology favorable for the procurement process.
- The ‘Trust’ Factor
In a world where cyber-theft and phishing of data is a concern, businesses must take extra caution when sharing data online. A key aspect of running a business is developing and maintaining trust between all involved parties or stakeholders. Blockchain, by using permanently retained historical data to authenticate all parties involved, assures and establishes trustworthiness (e.g. the seller and buyer are who they say they are, and the product is the right product, or making sure that the prices cannot be modified etc). This further simplifies the complicated, multi-faceted transactions that is involved in procurement, maximizing security and reducing the risks.
- Improving transactional efficiency
A shared access database removes the necessity for manually scanned invoices – all parties in the given network can now view transaction details via the shared database, doing away with the need for third-party and all intermediaries. Blockchain makes the processing of payments and transactions not only faster but also helps identify the most cost-effective vendors, thereby improving operational efficiency.
- Creates strong audit trails
Blockchain helps store details of every transaction that takes place and makes it available for viewing by those in the particular network, thereby offering transparency and greater visibility into transactions. Not only does it assist with tracking and recording of digital data, it also does the same with physical items. This end to end visibility creates a strong, fully documented audit trial.
With RekoChain, our smart supplier collaboration portal, aided by Artificial Intelligence, Machine Learning and Analytics you will be able to control spend, provide effective costing and can also view the aggregated set of data. We transpose the human element of trust — the gentleman’s handshake, the chit of paper and the promise to pay that’s largely existed and has built 100+ years of trade.
Built on Hyperledger Blockchain, RekoChain is an all-in-one solution transforming the procurement industry, the procurement space and the processes of procurement for our customers both buyers and sellers. Although Blockchain technology is still in its nascent stage, the advantages of being able to streamline business processes, secure payments, and lighten your workload shouldn’t be understated.
Proper implementation into ones’ business will provide benefits today and tomorrow!