November 6, 2017 at 3:27 pm #292310SIG AdministratorKeymaster
We have some questions pertaining to the technology, blockchain.
Please respond to the following.
1)Do you have specific application of blockchain technology in your Procurement organization – specifically related to Indirect categories?
2)What specific procurement processes can benefit from blockchain technology especially in indirect categories?
3)What are some external sources or supplier contacts that have significant expertise in application of blockchain to procurement processes?November 6, 2017 at 3:28 pm #294107
A company called Synechron has extensive experience and applications based on Blockchain methodology.
They would be a good starting point.
John Bree | SVP & Partner | Neo Group
[email protected] | M: 732.306.8022November 9, 2017 at 5:00 pm #294108
Blockchain, along with artificial intelligence, machine learning, and cognitive technology, is one of the hottest buzzwords in the software and technology industry today, and its notoriety has spread to the procurement and supply management industry. Blockchain was one of the main topics of discussion at SAP Ariba LIVE in Las Vegas last month, particularly since SAP Ariba has joined the Blockchain gang and are hard at work bringing it to procurement.
Indeed, Ariba is partnering with Everledger, a London-based Fintech digital ledger company that tracks and protects diamonds and other valuable items as they are shipped, on its Blockchain endeavor. Together, they have begun the long and hard work of understanding how to incorporate Blockchain onto the Ariba Network and make it work for its customers (click here to read our round-up of Ariba’s announcement from last month). A subsequent article will further detail this developmental work and the potential that they see in Blockchain for procurement.
But for now, given all of the buzz that Blockchain has generated, it is worthwhile to explore what the technology is and what it means for sourcing and procurement teams now and moving forward.
What is Blockchain?
Blockchain is a digital database that captures and aggregates records (or blocks) that can function as a ledger used to facilitate business processes that involve multiple parties. It is an open, internet-based, user-driven database that, for every new transaction or update that occurs, a new record or block is automatically added to the chain as a digital fingerprint. And each block becomes a living, breathing artifact for every widget at rest, in transit, or in use. As a result, Blockchains have the potential to increase the efficiency, fidelity, and security of transactional and logistical data exchanged between trading partners in a B2B or B2C environment.
What is Blockchain for Procurement?
Although Blockchain is still in its infancy, it could have enormous implications for global business and commerce. And it could have wide-ranging uses for supply management teams up and down the source-to-settle process.
- For legal and procurement teams, it could be a “smart contract” between two trading partners – a digital, automated record of what goods were bought, sold, and delivered, that is updated in real-time by end users across the line-of-business;
- For human resources and procurement teams, Blockchain would allow an organization to perfectly map business requirements to external workers and create an untouchable system of record that captures payment, project, and contract information (click to learn more about Blockchain and the “Future of Work”).
- For sourcing and procurement teams, it could be a new due diligence and “track-and-trace” tool that allows them to quickly determine a commodity’s or good’s point of origin, which would help drive visibility, control, and risk management into the supply chain and achieve enterprise or regulatory compliance;
- For accounts payable (AP) departments, Blockchain could be an all-in-one purchase order (PO), requisition, and invoice that links upstream sourcing and procurement processes with downstream payment remittance; and it can create an auditable report (stay tuned for more insight on what Blockchain means for AP);
- For suppliers, it could be a work order and a track-and-trace tool, in addition to a contract and invoice, and allow suppliers to conduct their own due diligence farther down the supply chain.
Blockchain is certainly one of the most exciting and potentially disrupting technologies to emerge in the last couple of years, and it could “come of age” in the next couple of years. It has significant potential for B2B commerce, and AP, procurement, and supply chain management teams, in particular. Up and down the source-to-settle process, Blockchain could increase efficiencies, visibility, and agility for end users, and deliver greater fidelity, value, and performance to the enterprise by way of the supply chain. But as the next article on Blockchain will illustrate, technology developers have to further build out Blockchain’s proof of concept to “human proof” it, which will be a tall order.
Dawn Tiura, CSP | President and CEO
Outsource, People, Technology, Solutions | http://www.outsourcemag.comNovember 21, 2017 at 5:06 pm #294150
Do you have specific application of blockchain technology in your Procurement organization – specifically related to Indirect categories?
Yes! We believe that blockchain technology can do significant value addition to procurement , including multiple in-direct categories. Blockchain can significantly reduce procurement operating costs , reduce risk associated with the processes, save time , and overall increase trust between sellers & buyers. The indirect categories that we have already piloted/deployed BC are Business services (Contingent labor management) , IT / Telecom (Asset management both hardware and software) , Logistics (Customs , Letter of Credit and trade financing).
What specific procurement processes can benefit from block chain technology especially in indirect categories?
The key for a good BC use case in procurement processes is having a business problem, presence of a business network (buyers and sellers) and necessity for increased trust. We believe that blockchain can significantly impact the following procurement processes: Account payable / Finance , PO/ Good receipt, Contract management , Supplier Information management, procurement ops , risk management,document digitization , user experience/feedback.
What are some external sources or supplier contacts that have significant expertise in application of blockchain to procurement processes?
IBM is the global leader in the blockchain technology/services space. In a recent survey(2017) conducted by Juniper research, IBM is ranked no 1, followed by distant second Microsoft. IBM blockchain platform is the only fully integrated enterprise ready blockchain platform designed to develop , govern and operate a business network. IBM Procurement Services (IPS) , the procurement services arm of IBM, has a strong point of view on the positive impact of blockchain on procurement and has the expertise implementing blockchain – especially in indirect procurement categories and is leading blockchain adoption / implementation across various procurement processes. Microsoft and Accenture are other players who operate in some areas of blockchain, but lack the end to end integrated ecosystem expertise offered by IBM.
Program Manager – Blockchain solutions lead
IBM Coginitive Process Services – Procurement Practice
E-mail: [email protected]
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