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When the advent of internet broke the world in the 90s, nobody had the slightest idea that something bigger will revolutionize the market again. But then all hell broke loose with Big Data and Blockchain dominating the scene. From e commerce to social media, everything is now dominated by Blockchain. It is the next big thing after the birth of internet. Blockchain in procurement has even more potential to change the future of commerce and development. So let us find out what makes blockchain so revolutionary.
Blockchain in Procurement explained:
Before moving on to the utility of blockchain in procurement, let us understand the concept of blockchain first.
In conventional financial transactions, usually online payments are subject to apprehension by virtue of fraud. In this situation, a third party authentication is required which is usually done by the bank. The banks have all information archived into their databases but they charge for these transactions which can turn out to be costly for people. Especially when it comes to bulk transactions.
What blockchain in procurement does is use a secure peer to peer software with no third party involvement and all the transactions are archived and performed on a secure digital ledger. The system is decentralized and the stakeholders can directly partake in the transactions. This helps in cost cutting as well as prevention of fraud.
Blockchain in procurement helps one save out on bulk transactions and the data recording methods help safeguard the integrity of the digital information with notifications to users about every single addition or subtraction. Moreover, it is impossible to alter the data as all transactions are linked together. Blockchain in procurement gives you that transparency.
Even though the blockchain technology is in its nascent stage, it has been attracting a great deal of attention over the last twelve months for being the most disruptive technology without borders, which is likely to impact and reshape the entire supply chain and procurement functions soon.
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Blockchain also enhances operational efficiency by use of smart contracts. Smart contracts are basically code fragments which help manage logical operations on Blockchain and as a result every single transaction and ramifications are automated. They are more transparent and secure and no middlemen are involved here.
This gives way for digital invoicing which are directly linked with the conventional banking systems. This reduces capital requirements and makes procurement operations much simpler.
Even B2B transactions are made easier and less cost intensive using blockchain technology.
Blockchain also helps prevent new quote submissions after crossing the deadline and the immutable and verifiable nature of this helps maintain accountability.
Moreover, in the times of cryptocurrency, blockchain has gained prominence due to its systematic and automated mechanism of action.
Blockchain in totality helps streamline the multi party supply chains, simplifying, digitizing and automating all the business processes including manufacture, product development, distribution and marketing, to finally end up with the product reaching the customer.
This helps organizations achieve targets and also multiply their revenues considerably.
For more information on blockchain and its role in procurement, visit www.purchasingplatform.com.