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This paper provides a high-level overview of the impact of Blockchain on Enterprise Resource Planning (ERP). Why it is needed, how it will impact the customers, and what are the ongoing developments in this area. This paper presents both technical and structural overview of the use cases already under development. It also describes the available open source tools and their advantages over each other. This paper is intended to introduce Blockchain to ERP consultants and customers, also at the same time introduce this powerful weapon to the general business reader.
Content may be subject to copyright.
A
Tryst
Of
ERP
With
Blockchain
Table of Contents
Acknowledgement............................................................................................................................. 3
About the Author .............................................................................................................................. 3
Purpose of This Paper ........................................................................................................................ 4
Intended Audience ............................................................................................................................ 4
1 Introduction ......................................................................................................................... 5
1.1 Enterprise Resource Planning (ERP) ......................................................................................... 5
Scope of ERP .............................................................................................................................. 5
Technical aspects of ERP ............................................................................................................ 6
1.2 Databases ................................................................................................................................ 7
Types of Database:..................................................................................................................... 7
1.3 Relational Database Vs Blockchain Ledger................................................................................ 8
2 Blockchain Design Philosophy .................................................................................. 8
2.1 A Block..................................................................................................................................... 9
2.2 Consensus Mechanisms ......................................................................................................... 11
2.3 Types of Blockchains .............................................................................................................. 12
2.4 Current Developments ........................................................................................................... 12
3 Why Blockchain for ERP? ............................................................................................ 15
3.1 Smart Contract ...................................................................................................................... 15
3.3 ERP modules with Blockchain................................................................................................. 15
4 Some Compelling Use Cases ...................................................................................... 17
4.1. Electricity Meter ................................................................................................................... 17
4.2. Background check system ..................................................................................................... 18
4.3. Supply Chain: Online shipment ............................................................................................. 18
5 Long Term Vision ............................................................................................................ 19
6 Conclusion ........................................................................................................................... 19
7 Notes/Glossary ................................................................................................................. 20
Acknowledgement
I decided to write a whitepaper on blockchain after realising its impact upon business in future.
There were already a considerable number of whitepapers upon blockchain and blockchain based
platforms. However, I felt that none of them really addressed the question that had let me to do
research in blockchain: How a blockchain blocks are processed? How blockchains will impact
Enterprise resource planning? How can we solve real life problems using blockchain? These are
questions that are of interest to all us. But blockchain technology is too much complex to
understand. Yet the basic concepts of blockchain can be stated without these complexities. This is
what I have attempted to do in this paper. The reader must judge whether I have succeeded.
I’m very grateful to my reviewers Kunal Jauhari, Aditya Singh, Hitesh Goel and Pratishtha Mishra for
their precious feedbacks. I’m sure it is a better paper as a result of their keeping my nose to the
grindstone.
About the Author
Rudramani Pandey has had a 4-year career as a blogger. He is a former member of a social
enterprise ‘EzeGirl’ which deals with menstrual hygiene. He is a SAP Consultant by profession. He
has authored a book ‘My Grandpa once told me’.
He can be reached at rudramanipandey@outlook.com
***
Purpose of This Paper
This paper provides a high-level overview of the impact of Blockchain on Enterprise Resource
Planning (ERP). Why it is needed, how it will impact the customers, and what are the ongoing
developments in this area. This paper presents both technical and structural overview of the use
cases already under development. It also describes the available open source tools and their
advantages over each other.
This paper is intended to introduce Blockchain to ERP consultants and customers, also at the same
time introduce this powerful weapon to the general business reader.
Intended Audience
I expect this paper will be read by both technical and business readers across the globe. The
intended audience of this paper are the people connected directly or indirectly to either ERP or
Blockchain. Newbie’s too can utilize this paper to get acquainted with the Blockchain.
Since Blockchain is so new, we expect readers will be somewhat familiar with the Blockchain
technology and its jargons. I have tried to explain minute details of the technology and hope it will
impact people including entrepreneurs, IT developers and managers, self-learners and the
executives.
In the end, I have attached reference/sources for those, who want to deep-dive into the Blockchain.
***
1 Introduction
This section is the building block for all upcoming sections. It explains the basic concepts of both
Enterprise Resource Planning and Blockchain. It also throws light upon different databases and
distributed ledgers.
1.1 Enterprise Resource Planning (ERP)
Every enterprise consists of resources like manufacturing resource, human resource, etc. and these
complicated resources and their relationship with each other needs to be managed via a well-
organized software or a solution. This is where Enterprise Resource Planning comes into the picture.
There are multiple Enterprise Resource Planning companies like SAP, Microsoft Dynamics, Oracle,
Sales force, etc and these are involved in management of many other big enterprises like Apple,
General Electric, KFC, etc.
Scope of ERP
Every ERP solution revolves around following modules or business activities:
Customer Relationship Management (CRM)
CRM is a system that directly interacts with its current and future customers. Suppose an
enterprise with multiple clients, wants its activities to be managed in an organized way.
Then it must integrate sales, marketing, commerce and customer service altogether and this
is available in CRM. In this way CRM helps in understanding customers and help enterprises
to fulfil the needs and requirement of customers.
Financial Services Management
Financial Services manage all the financial operations within an organization. Its roots are
connected to every other business activities, from Customers’ transactions to Vendors
payment and from business future investments to individual employee payment. With
Financial Services Management system, an organization keeps an eye on its wealth.
Supply Chain Management (SCM)
SCM involves a chain of partners via which supply of goods, information and capital occurs.
Suppose an enterprise orders something from another enterprise, then the flow of that
order will involve manufacturer, supplier, inventory, logistics and many other. SCM improves
efficiency of an enterprise with better supply and demand management.
Human Resource Management (HRM)
HRM is the force behind the forces that runs an enterprise. It keeps tracks of employee
recruitment and on boarding, attendance, training and development, appraisal, payroll and
other employee concerns. HRM helps an enterprise to accomplish its goals through
workforce.
Production Planning or Production Scheduling
Production unit of an enterprise manufactures a product based on the planned activities
which includes employees, materials and operational plans. The vision of an enterprise and
successful demand and supply management is achieved via production planning/ scheduling.
These modules might differ by name from ERP to ERP, but their purpose remains same. There are
more modules apart from the one mentioned above, you can refer the reference section for more
information.
Technical aspects of ERP
ERP solutions architecture varies from ERP to ERP. A generic architecture can be seen below with the
actual processes going in each phase.
Figure 1: Generic Architecture of ERP
Following technologies are part of ERP software’s:
Client/Server Technology
Client/ Server technology is a distributed application structure and consists of two different
types of computers. One type of computer sends request for data, called client and the
other one is responsible to process that request and produce relative response. This
separation keeps data protected into servers and allows hosting of database in central
locations.
Database systems
To store enterprise data, ERP systems generally use Relational Database Management
Systems (RDBMS) as it is simple and easy to use, have multiple user access and can have
authorization-based access. A relational database performs Create, Read, Update and Delete
(CRUD) functionality using unique key which is assigned to each row.
Development tools
Different ERPs use different development tools to develop their software. The database is
mainly based upon SQL. The computer language is becoming advance day by day; hence ERP
companies are adapting all open source-based development. Based on Wikipedia of
different ERPs, here is a list of development tools used by some of the ERP solutions:
ERP/CRM
Database
Backend
Frontend
SAP
HANA
ABAP
UI5/Fiori
Oracle
Oracle SQL
Developer
Oracle APEX
Salesforce
Dell, Oracle, AWS
Salesforce Apex
Lightning
Microsoft Dynamics
Azure Developer
Tools
PowerApps
Table 1 Development tools of ERP solutions
These are only some of the tools shared on their official page, for more knowledge regarding the
tools used by these ERPs please visit their websites.
1.2 Databases
A database is an organized collection of information, just like a notebook, where you can read, write,
update and delete data. It is one of the essential tools of all the organizations using computer
technology. A database is also known as ledger. A ledger in accounting stands for a principal book
where transactions are saved by date. In digital format these books take form of excel or database.
Going on further, wherever we discuss about ledger, it will stand for database.
Types of Database:
There are different types of database which are categorized based on their data saving format and
structure. In this section we will discuss following two databases relevant to this paper:
Relational Database
A Relational Database is database management system which utilizes the Primary Key(PK)
and Foreign Key(FK) relationship. Almost every ERP solutions use Relational database. In
simple context, this database divides all data based on relations among them. For example,
data of employee can be saved into three tables i.e. Employee Details table, Employee
Address table and Employee Salary table where each table has Employee ID as a common
key. The relationship among these tables can be seen below:
Figure 2: A Relational Database
Blockchain
A Blockchain is a decentralized database, or simply a decentralized linked list, where list of
records (called blocks) are linked via cryptography. By decentralized, we mean that there is
no single database where all records are saved rather the same set of data is saved in
multiple databases. A block in a Blockchain contains list of records (called transaction data),
a timestamp (UNIX time) and cryptographic hash of previous block (hash converts the
previous block data into a fixed length of random data). This process of saving blocks can be
seen below (You can make your own blocks here):
1.3 Relational Database Vs Blockchain Ledger
Both the database systems mentioned above carry their own advantages and disadvantages. Let us
have a look on the basic differences between these database systems:
Relational Database
Blockchain Ledger
Controlled by an Admin
No Admin, everyone shares same data
Access limited to view data
Anyone can access (public) Blockchain
Access limited to write data
Anyone with right consensus can write
Relational Databases are fast
Blockchain, due to verification process, are
slow
No history trace of edited data unless log
table is maintained
History of data is maintained via hashing
High performance & confidentiality
High provenance and immutability
Table 2 Comparison between Database & Blockchain
2 Blockchain Design Philosophy
Blockchain was introduced to the world via Bitcoin. With time the use case of Blockchain shifted
from crypto currency to business problems that it can solve. Many are still confused between Bitcoin
and Blockchain. To clear this confusion, I will quote few lines of FT Technologies reporter, Sally
Davies.
Figure 3: An example of Blockchain
“Blockchain is to Bitcoin, what the internet is to email. A big electronic system,
on top of which you can build applications. Currency is just one.”
We have already discussed the basics of Blockchain technology. In this section we will deep-dive into
Blockchain and discuss a block in detail, consensus, and types of Blockchains, current development,
advantages and disadvantages of a Blockchain.
2.1 A Block
In the introduction part, we have seen how blocks are linked to each other
and what a block contains. Now let us explore technical information of a
block (a block header) part by part. The non-technical readers can skip this
part.
Genesis Block
It is the first block of any Blockchain and its value is always hard
coded. Since no previous block existed before it, hence the
previous hash remains ‘0’ in this case. All the data are maintained
in the later blocks and the very next block will have the Hash value
of Genesis block in the “previous hash” section as shown in figure 3
above.
Hashing
Hashing is a process in which an algorithm is used to convert a
string of any length to a string of fixed length. It is very important
in case of Blockchain as it helps to keep track of huge data without
saving them and rather saving hash of that data. Bitcoin uses SHA 256 while Ethereum uses
Keccak-256 algorithms respectively. The only important thing to take away is that this
generated hash key is the one that stores data of current block and address of the next
block, hence linking both the blocks and keeping track of the previous block. In given
diagram below, I have generated hash of a string using SHA 256 algorithm, you too can
generate hash values from here.
Figure 5 SHA-256 Conversion
Transaction Data
All the transaction records are saved as Transaction Data. Each block of a Blockchain can
contain thousands of transaction data and it will be inefficient to store all the data inside
each block as a series. This will decrease the search efficiency of a data. To solve this issue,
Figure 4 A Block
data inside a block is stored in the form of a Merkle tree.
Merkle tree
A Merkle tree is a representation of data (in this case hash key of our transaction data) in a
form of leaf and child node. These nodes are connected to a single root. This root is the
representation of all the transaction data into a single hash key. To make it simple, just
assume a tree with multiple branches and each branch has their own branches. Now the last
level of branches will have our data. These data will have their own hash keys as discussed
earlier. These hashed keys will be put into pairs and will be hashed again. This process is
repeated till we get only one hash. This hash is stored in the Blockchain as Data and using it
only other data can be retrieved. This high level of hashing makes it tamper proof.
Figure 6 A Merkle Tree
Timestamp
As the name suggests a timestamp is a Date-time value that is stored in a block. Any
transaction in this world is incomplete without date and time data. It tells at which time that
block was created. In Blockchain this value is in the form of Unix Timestamp. Unix
Timestamp is the number of seconds that have elapsed since 01.01.1970 which means
0000000000 in UNIX time is equal to January 1, 1970 12:00:00 AM. A timestamp is
converted value of GMT. Thus, if a block is created, it will take current time of GMT and
convert it into Unix Time, validate it if it is greater than the saved time of previous block and
then save it. You can convert any time to UNIX time here.
Nonce
The literal meaning of nonce is “unique for particular occasion”. A nonce is not a general
Blockchain term but is a cryptographic term mainly discussed in terms of Bitcoin. A nonce is
a number which has to be guessed in such a way that when added before the hashed value
of current block should produce a value whose hashed value is less than the difficulty (it is
also a part of block and is regenerated for every block), its length is equal to the hashed
block length i.e. 64 character which is equal to SHA-256 length in case of Bitcoin.
Process of finding nonce:
o The person(miner) must guess a value of nonce (it can start with 000…0001)
o Get the hash value of block header of previous block (000dceb75a135c…)
o Append that nonce before the hash of block header (000…0001000dceb75a135c...)
o Rehash the above appended value (xyz)
o Get the difficulty value from the block header (abc)
o Check if the above rehashed value is less than the difficulty value or not (xyz < abc)
o If yes, then a new block is added in the current Blockchain of the Bitcoin and this
person is rewarded some bitcoins for his work
2.2 Consensus Mechanisms
The literal meaning of consensus is “A general agreement”. As the meaning suggests, a consensus in
a Blockchain is a mechanism of validating a transaction based on general agreement (agreement of
more than 51% miners in Bitcoin).
For example, Gargi sends $100 worth of Bitcoin to Rudra, Gargi will lose 100$ worth of Bitcoin from
her wallet, and Rudra will gain 100$ worth of Bitcoin in his wallet. But it needs to be validated and
verified that if Gargi had 100$ worth Bitcoin in her wallet or not. This is validated by the miners in
the Blockchain and if more that 51% miners agreed upon this transaction, then only the transaction
will be validated.
There are multiple types of consensus, we will discuss the few and widely used consensus
mechanisms:
Proof of Work (PoW)
As discussed above, the process of finding nonce is available for everyone and it will be
achieved earlier by the one who has better computational power (because of higher
probability to guess). This way of validating a block in Blockchain where the work (here
nonce guessing) is considered as a proof of validation is termed as Proof-of-Work. This
mechanism is used in Blockchain based cryptocurrencies like Bitcoin.
Proof of Stake (PoS)
As discussed above, the process of finding nonce will be achieved earlier by the one who has
better computational power. This could result in a monopoly of rich and could lead the
monopolist to impose conditions on the rest of network. And if this monopolist has
malicious intentions, then it could lead low confidence in Bitcoin. To overcome this issue, a
consensus mechanism was designed in such a way that the forger/validator will have to keep
an amount of crypto currency as a stake and will be probabilistically assigned a chance to be
the one validator and create new blocks. This too provides a monopoly to rich as they could
stake more and will have high probability to become validator. As stake can be forfeited if
fraudulent validations are made, hence it seems safer than PoW. This mechanism is used in
Dash, NEO and PIVX.
Proof of Elapsed Time (PoET)
In 2016, Intel identified the issue of very high resource utilization and energy consumption in
current consensus mechanisms. To solve this issue and serve the purpose “cost should
remain proportional to the value derived from the process”, Intel brought Proof of Elapsed
Time. In this mechanism, each participating node of a permissioned Blockchain are assigned
random waiting time. The one with lowest waiting time wins the opportunity to become a
validator. This is more like a lottery type. This mechanism is used in Hyperledger.
2.3 Types of Blockchains
Blockchains classifications are primarily based upon restrictions on block (or simply data)
accessibility. Following are the three types of Blockchain networks:
Public Blockchains
A public blockchain is the one which has absolutely no access restrictions and anyone on
internet can become a user or validator. These blockchains are mainly used by crypto
currencies. These blockchains use a consensus mechanism to keep their transactions valid.
Most famous examples include Bitcoin and Ethereum.
Private Blockchains
A Private Blockchain is just like a relational database i.e. fully centralized and owned by a
single organization. All the participants are vetted before entering into this blockchain
network. These types of blockchains are mainly used by banking organization, where data
cannot be shared with and validated by anyone. Multichain is a tool to create private
blockchains.
Consortium Blockchains
The literal meaning of consortium is “an association of several companies”. As the name
suggests, it is a blockchain that is jointly controlled by a group of organizations. It is best
suited for business and ERP solutions. Hyperledger and R3Cev are leading blockchain
networks in this area.
2.4 Current Developments
After the release of bitcoin and its underline principle i.e. Blockchain, several techno players
launched their own platforms for same. Among them these are the four main Blockchain platforms
that can be utilized by ERP solutions.
Hyperledger
In 2015, several companies came together and created an open source Consortium
blockchain platform under the guardianship of Linux Foundation and named it Hyperledger.
Hyperledger, since then, has evolved a lot. It has launched multiple frameworks and tools for
the same. Among them Hyperledger Fabric is the most suited framework for Enterprise.
Following are some of the tools and frameworks developed by Hyperledger:
Framework
Tools
Hyperledger Burrow
Hyperledger Fabric
Hyperledger Indy
Hyperledger Iroha
Hyperledger Sawtooth
Hyperledger Caliper
Hyperledger Cello
Hyperledger Composer
Hyperledger Explorer
Hyperledger Quilt
Table 3 Frameworks & tools of Hyperledger
Hyperledger has published several whitepapers to discuss the underline technologies; you
can read the Introduction to Hyperledger here.
Multichain
Multichain is a private blockchain platform developed for financial sectors. It provides both
privacy and control to the network administrator (miner of the first “genesis” block). This
administrator grants privileges to other users in the network. The mining (block validation) in
a Multichain is just like a round robin schedule, which means each miner/user in the
network must create blocks in rotation to generate an authentic blockchain.
Multichain has published a whitepaper to discuss the underline technologies; you can read
the Multichain Private Blockchain Whitepaper here.
Quorum
Quorum is an enterprise focused Ethereum based private/permissioned blockchain. An
Ethereum is a decentralized platform which is used to run smart contracts. The problem with
Ethereum was that its transactions and validations were not private. To enhance Ethereum
in such a way that it can be utilized by ERP and financial solutions, J.P. Morgan group
introduced a fork in existing Ethereum and named it Quorum.
Quorum has published a whitepaper to discuss the underline technologies; you can read the
Quorum Whitepaper here.
Corda
Corda is an open source private blockchain platform, introduced by R3 that integrates the
existing proven technologies such as relational database, Java Machine (JVM) in blockchain
for ERP and business solutions.
Corda has published a whitepaper to discuss the underline technologies; you can read the
Corda: A distributed ledger Whitepaper here.
2.5 Advantages of Blockchain
Transparency
Once a block is verified, it is added into the blockchain and later available to all the users to
view the record (depending upon type of blockchain and authorizations). Suppose, for
production of a car, its parts are processed by multiple teams. If each team update their
results on the chain, then it can be viewed by other teams too and the current progress can
be tracked (and cannot be altered).
Immutability & Data Integrity
Data/Records in the blocks of blockchain are secured by strong cryptographic algorithms. No
unauthorized person can access it (without key access). No unauthorized data can be
appended to the chain (without being verified by miners/validator). No data can be
modified/altered by unauthorized person/malicious party (Merkle tree keeps a track of this).
In this way data integrity and immutability is achieved.
Security
With all data encryption, chain to chain validation dependency and complex level of
validations make blockchain very secure. The example is bitcoin which is in operation from
almost a decade and has never been hacked. Strong cryptographic algorithms prevent the
Blockchain architecture from critical exploitable attack vectors.
2.6 Disadvantages of Blockchain
Latency (Network Speeds)
As we have discussed above, it takes almost 10 mins. to validate and add a block into the
chain. For other leading blockchains this latency is almost 1 min. which is way more than
what a relational database would take to append data i.e. within a few second. This high
latency can affect the proper data flow in case of high volume and thus it will not be suitable
for ERP solutions.
Regularity & Legal acceptance: GDPR
A blockchain appends all data and keep them always in the chain. No matter how long the
chain gets, you can access the source of the data. This questions the compatibility of
blockchain with GDPR.
3 Why Blockchain for ERP?
In this section, we will discuss what a smart contract is and how blockchain can be implemented into
various modules of ERP and CRM.
3.1 Smart Contract
A smart contract is a self-executing contract, which is automatically triggered once a condition is
successfully met. This contract can be partially or fully executed with or without human interaction.
This concept can be easily understood by the example of Non-Disclosure Agreement signed by an
employee whenever he/she joins an organization. The first step will be to automatically send each
new joiner an agreement that can be digitally signed, once signed a digital password will be
generated automatically and the credentials for official access can be sent to the new employee.
These three steps don’t need any human interaction, and these can be easily achieved using smart
contracts.
This was a very simple explanation to replace human based operation with smart contracts. These
smart contracts, once implemented in government offices for legal documentation, may help to curb
corruption. Smart contracts do serve wider range of business problems and some of these use cases
you can find in the given white paper: Smart Contracts: 12 Use Cases for Business & Beyond”.
3.3 ERP modules with Blockchain
Although this whitepaper was written solely to understand how blockchain can be implemented in
ERP solutions, but we have focussed mainly upon the basics of blockchain and the ERP. This will help
us to understand the upcoming relations of each module and blockchain and help us to understand
the compelling use cases in this area. Following are some of the modules where we have tried to
implement blockchain:
Supply Chain Management (SCM)
In Supply/Value Chain, we have two scenarios where we face problems:
1. Today, before blockchain, in the old way of supply chain, all different partners have
their own database and their own information. It means a customer has their own
database; manufacturer has their own database and the retail seller too has their
own database. If we have two databases, it will be two versions of truth. This
scenario leads to conflict sometimes e.g. I ordered a thousand mobile phones, but I
received 950. Which database will be true one? Of course, mine is true. But other
one will also say that his data is true. So, there we have a problem.
2. If we have a supply chain like this, as mentioned in below diagram. The supply goes
from sub supplier to supplier, supplier to the producer and so on. They all must take
keep margin for variations. The sub supplier must produce little more to be on
secure side, the supplier orders little more to be on secure side and have backup.
And this scenario continues till end. It means, if the customer changes something, it
will cause enormous cost all the way down till the sub supplier in the supply chain
because there are so many different owners of the information for all the steps.
They don’t really know each other. What they only know is their immediate
neighbour.
The solution that blockchain provides in this scenario is by becoming a single source of truth. All the
nodes will have only one connection to the block chain as per below image, which means all the
participants will have access to relevant information in real time.
Figure 7 Flow diagram of SCM
Figure 8 Blockchain based SCM
Customer Relationship Management (CRM)
If we take a scenario of general business customer relationship management which starts
with a contract, followed by order, payment and delivery. The data flow between customer
and seller happens multiple times and it too faces the same problem as faced in supply chain
management above. In this case too, we can lock down the records in a blockchain and
expose only relative data to relative users. The same thing is represented in the image
below:
Other modules of ERP share same problems and hence, we can solve this issue by utilizing
blockchain.
4 Some Compelling Use Cases
Business players have already started to work on different scenarios where blockchain can be
utilized. Here we will discuss some of them. To make this part more effective and simple, we will
initially discuss the problem statement, current scenario and then the effective blockchain based
solution.
4.1. Electricity Meter
Problem Statement: Effective management of energy sector such that grids are balanced, and
consumers are paying for what they get and at the same time power supplier/operator are
transmitting the amount they have been paid for.
Figure 9 Blockchain based CRM
Current Scenario: The power distribution in India is a very typical process. The power generators
transmit power to grids and these grids supply the powers at home. These grids have local operators
who collect data regarding power use, which is later used by operators to generate electricity bills.
Once paid, they pay to the power generator. As we can already see the data regarding power
consumption is being maintained at different location and individually at homes. If the local operator
partners with users, then they can manipulate the consumption data. Also, there is no track of how
much power is currently being used and where it is being used. Does anyone using, who is not
authorized to use? Should the power to grid be increased or decreased to keep it stable?
Blockchain Solution: To keep the power supply stable, to avoid unauthenticated use of power
supply and to curb the corruption from consumption data, a blockchain can be implemented in such
a way that it keeps track of power from power generator to supplier, from local operator to end
user. In this way supplier will get to know if the energy supply is under theft or not. Power generator
will get to know the amount of electricity required to keep the grid stable. The users will be paying
exactly the amount they have used. The role of local operator can be eliminated, hence making the
energy enterprise corruption free.
4.2. Background check system
Problem Statement: After induction of an employee in public or private sector, a background check
needs to be conducted to check if the employee is authentic or not.
Current Scenario: Several private organizations are there to help other enterprises to conduct
background check. Government sector have their entirely different unit and employees to conduct
background check. If the same employee switches job, the background check is repeated. Also, in
case of passport registration, a background check with police level verification is conducted. These
multiple background checks of same employee mean, double spending and waste of time, money
and resources.
Blockchain Solution: At every level of education, a background check is done at basic level to check
if certificates are valid or not. These can be put into a blockchain. Later, during passport verification,
the validation can be maintained into blockchain. If in a condition, a separate background is done,
that too will be maintained in the blockchain. Hence, a single data to check if the person is authentic
can be maintained via blockchain. Also, power to share data can be given to the user/employee
itself.
4.3. Supply Chain: Online shipment
Problem Statement: Online shopping is easier to access but the authenticity of the product needs to
be verified.
Current Scenario: Multiple online shopping websites are there. All websites have multiple vendors.
These vendors too depend upon other vendors for supply. Once an item is ordered online, these
vendors send that items to the user. These items can be a copy of original and this counterfeit
practise can be conducted from any of the vendors or even by the delivery unit.
Blockchain Solution: The goal of this use case is to take the authentic item from the manufacturer
unit and deliver the same to the customer. In doing so, a blockchain needs to be constructed in such
a way that each product is saved on blockchain with a unique ID at the manufacturer unit itself, the
product data need to be updated based on its location (at which vendor the product has reached)
and also if it is being delivered to the customer. If a fake product is delivered to a customer, the
customer can track if the unique ID maintained upon the item is there in the blockchain or not, and if
it is there, does its location is correct or not. In this way a blockchain will ensure original product
delivery irrespective of vendors.
We have discussed some of the use cases of blockchain; likewise, multiple scenarios are there where
we can implement a blockchain. To explore more, read blockchain use cases by IBM here.
5 Long Term Vision
We live in a world which is highly connected to each other in terms of social life or transactions.
Every day, user’s data is increasing both on social media as well as online shopping platforms. Apart
from this Enterprise Resource planning tools has also seen an exponential growth of data. With
increase of data, the complexity increases. To keep these data secure and authentic several
enterprises have moved to blockchain. But there are multiple blockchain players in the market. And
the sole purpose of the blockchain to decentralize data can fail if two enterprises with their own
blockchain will join hands. To keep these things in mind we can forecast blockchain as:
Simple to Use
If something our mother can use, then we can say it is simple to use. But that is not the case of
blockchain. Even highly educated person feels the other way. Simplification of blockchain platform
will ensure more consumer interaction.
Interconnected Blockchain Platforms (Blockchain Interoperability)
When we transact money from an ATM, we don’t bother about the bank to which the ATM belongs.
That kind of interconnection of blockchain platforms will connect multiple enterprises and sectors
together.
Blockchain API (Easier Integration)
The way payment gateways are integrated with any apps of android or IOS, the same way API
integration of blockchain will make blockchain transaction quick, easy and efficient.
6 Conclusion
In this paper, I explained the underlined principles of ERP as well as blockchain and how they can
together bring the change that will impact both users and the enterprise in a positive way. I hope
reading this paper is just the beginning of the blockchain and ERP experience for you.
I know there are a lot of things that remain undiscussed. But at same time I tried to provide relative
links of other whitepapers, wherever I thought was required, for the information seekers.
It will take a long time for blockchain and the tools that it supports, to become a standard in terms
of the way we operate, but the promise is bright.
7 Notes/Glossary
https://en.wikipedia.org/wiki/SAP_ERP
https://en.wikipedia.org/wiki/Oracle_Corporation
https://en.wikipedia.org/wiki/Salesforce.com
https://en.wikipedia.org/wiki/Microsoft_Dynamics
https://www.youtube.com/watch?v=upVISZHbT0Q&t=7s
https://www.youtube.com/watch?v=aF-Vf8bck5Q
https://blockchaindemo.io/
https://www.epochconverter.com/
https://www.hyperledger.org/wp-
content/uploads/2018/07/HL_Whitepaper_IntroductiontoHyperledger.pdf
https://www.multichain.com/download/MultiChain-White-Paper.pdf
https://github.com/jpmorganchase/quorum-
docs/blob/master/Quorum%20Whitepaper%20v0.1.pdf
https://www.corda.net/content/corda-technical-whitepaper.pdf
https://www.perkinscoie.com/images/content/1/6/v2/164979/Smart-Contracts-12-Use-Cases-for-
Business-Beyond.pdf
https://www.ibm.com/blockchain/use-cases/
https://blogs.sap.com/
***
... The authors concluded that the proposed model is practically possible to be adopted for communication in power grids at a global level and Hyperledger Fabric is a helpful tool in this regard. [59], in the whitepaper, the author highlighted some issues in the ERP system with regard to Blockchain and further its impact on the business in the future. A high-level overview is presented by the author on Blockchain and ERP systems and discussed Blockchain, its components, working mechanism, advantages, and cryptographic primitives in detail. ...
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When designed, technologies and frameworks are not created to be as dynamic and flexible as to cater to the requirements of other domains, and so is the case with Blockchain technology. Specifically designed for cryptocurrency, Blockchain was not intended to be used in other domains. However, during the past few years, critics argued that Blockchain has the potential to deal with some unique requirements like confidentiality and immutability and can therefore be deployed in several areas other than cryptocurrency. The use of Blockchain to support Accounting Information Systems (AIS) through enterprise resource planning (ERP) is another motivating domain to investigate in this research. ERP is another promising technology that has gained significant attention across the globe. In this research, a hybrid solution is proposed to ensure AIS data integrity against any deliberate attempt or mala-fide intention for alteration or deletion from the database that can be verified at any later stage. Since Blockchain can be used to prevent any mutability in the stored data, the proposed solution presents a concept of Data Vaults backed by the Blockchain. To this end, we apply cryptographic primitives like SHA256 on the data inside the block and then chain that block to secure data vaults. So far, Blockchain has not yet proven itself as an alternative to any traditional database system. However, it can be applied in conjunction with the Relational Database Management Systems (RDBMS) to provide cost-effective yet robust solutions. This research demonstrates the application of a simple and lean version of Blockchain to assist enterprises in storing their financial and accounting data into data vaults, ensuring their data integrity against any alterations. The suggested cost-effective framework can be easily integrated into AIS and ERP systems to identify data breaches.
Thesis
Blockchain, which is in limelight since its invention, has shifted the entire paradigm of computer applications in the past few years. The key concept behind the Blockchain was to create a mechanism for storing data where it is immutable, confidential and located on a peer-to-peer (P2P) Decentralized network. Blockchain is the underlying data storage technique for storing Bitcoin and other cryptocurrencies’ transactions. Technologies and frameworks are, when designed, not developed to be as dynamic and flexible as to cater requirements for other domains and so the case is with Blockchain. Specifically designed for the cryptocurrency, Blockchain was not supposed to be used in other domains. However, during the past few years, critics are now seem convinced that Blockchain has the potential to deal with some unique set requirements like confidentiality and immutability and it can be deployed in many areas other than cryptocurrency. An in-depth study reveals that Blockchain has numerous unmatched features that distinguish it from traditional data storage technologies. Unfortunately, Blockchain is not understood well and is still in its infancy stage. Its potential features and drawbacks are still unknown. Blockchain can be used in other domains but how and up to what extent. Do we always need a long list of peers to implement Blockchain, a high-tech equipment to mine a block, a huge investment in terms of finance and resources and a complex programming code and expertise? Blockchain to support Accounting Information System (AIS) through ERP is another potential domain that has been identified. ERP is another promising technology from the IT domain which has gained significant attraction across the globe. The world’s top leading software vendors are in a race to develop state-of-the-art ERP systems that not only cover maximum areas of a business but also support resource management. The market volume of ERP business has been exceeded up-to billions of dollars and now ERP vendors are looking towards new ideas to make their products more efficient and reliable. The ERP systems with Blockchain are now the talk of the town. In this research work, a hybrid solution is proposed to ensure AIS data integrity against any deliberate attempt or mala-fide intention for alteration or deletion from the database and that can be verified at any later stage. Since Blockchain has the potential to use for barring against any type of mutability in the stored data, the proposed solution presents a concept of Data Vaults backed by the Blockchain. Applying cryptographic primitives like SHA256 on the data inside the block and then chain that block in the chain of blocks, it’s all about what the Blockchain is. So-far, Blockchain is not an alternative to any traditional database systems but can be applied in conjunction with the RDBMS. This study advocates that Blockchain is a data storing technique, and, not a technology.
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