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The blockchain is renewing industries impressively by streamlining financial services. It has provided new incentives and opportunities to all sectors. Furthermore, it has emerged as a reliable tool of empowerment, bringing transparency, credibility and efficiency in the transactional process while offering significant benefits to its users. This nascent technology that is renewing various industries is also destined to revolutionize the procurement process. Where do we meet blockchain and procurement? Let's have a look.
1. Incorporate trust: The trust factor is lacking among procurement professionals and organizations that force most companies to involve bankers and insurance agents to mitigate risks. Establishing due diligence can be expensive and time-consuming. Here, blockchain plays a key role as data can be viewed but can not be edited or deleted. Transparency will be a crucial factor here as a company, and suppliers will be aware of every step of the process.
2. Systems automation: Making orders and processing payments is still a manual process for many industries. It implies the registration of all the details about the buyer and the seller, such as agreements, receipts and other documents. When the blockchain is in play, all records are available under one roof. Smart contracts can be fed with all the necessary information that will take care of everything.
3. Payment process: B2B payments become complex because everything has to be put on paper. The intelligent Blockchain system establishes that payments will be sent immediately and intermediaries will not be required. This contract starts the transaction only when all the existing conditions are met.
4. Advanced security: Just like any other industry, the purchasing department also takes care of sensitive data that could cost a lot to a company. Cloud storage provides a secure environment but it's not as secure as the shared ledger and cloud storage is expensive too.
5. Improvement of productivity: One of the most significant advantages of integrating blockchain technology is cost reduction. This process increases productivity, if there are smart contracts, the data is secure and there is no need for intermediaries, so an organization can save a lot. The automation of the whole process improves accuracy and minimizes the chances of errors injected due to human negligence.
The blockchain innovation has a lot to offer for the procurement industry, and therefore purchasing professionals should start considering this innovation. Integrating this technology can be useful in the long run as it guarantees transparency, efficiency and greater security and reliability. But as we all know, blockchain is in its infancy phase and therefore is only suitable for pilot projects.
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