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Blockchain integration turns ERP into a collaboration platform

Lucas Mearian | June 12, 2017
The combo yields a trusted system of records that can be shared between disparate partner companies.

A modern aircraft, de Vos pointed out, is comprised of 2 million to 3 million parts. Due to regulation, each part is tracked, and when maintenance is performed, that work must be logged. The problem is that every entity in the maintenance chain, from airline operator and maintenance group to the parts suppliers and regulators, is often on disparate software systems. Even when they use integrated systems, communications may not be standardized and could be verbal or paper-based, leaving many single points of failure in tracking operations.

For the airline industry, blockchain offers consensus among parties, provenance of data, immutability and finality, de Vos said.

"It could create a single version of truth where all...the underlying IT systems go through a simplified integration through the blockchain, getting a transcript of the asset history into the blockchain to make sure all the systems instead of talking to each other talk through blockchain," de Vos said. "That leads to much simpler integration between IT systems."

Blockchain will not replace ERP systems, de Vos said, but be a complementary application that can simplify integration between parties and reduce vulnerability because of its innate security.

Not all the kinks worked out

Not all of the challenges in creating a regulated supply blockchain have been met, de Vos said. For example, what percentage of those parties in a blockchain must approve a transaction before it's verified currently varies. And, there's no way to ensure those on a blockchain can be notified in real time of the completion of an event; those and other issues will have to be addressed by software vendors.

"It's not going to happen tomorrow," de Vos said. "I think simpler applications might happen tomorrow, but something as complex as an entire aviation chain -- that's a couple years away."

EY's Brody believes the key challenge in scaling up blockchain technology for the enterprise is in managing security and privacy. The original blockchains were entirely public (BitCoin and Ethereum), "and that's not ideal for most enterprise business transactions," Brody said.

"Building sophisticated tools for managing privacy and security while sharing information selectively is key for enterprise adoption at scale. While we see companies eventually wanting to use public blockchains for their business operations, most early implementations will be private blockchains where it is easier to control and manage privacy and security," Brody said.

What won't be difficult is integrating blockchain with ERP systems. That, Brody said, is a solution that has been well developed for past add-ons to enterprise platforms like analytics and other tools.

"We are using many of the same tools we did for XML, EDI and analytics to do integration," Brody said. "So that seems like less of a huge challenge and more of a well-known and well-understood problem."

 

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