As a disruptive technology platform, blockchain is impactful, with the potential to redefine the operations and economics of many industries, writes KAMENDRAN GOVENDER, Procurement & Supply Chain Transformation Lead for Accenture Consulting.
Blockchain as a technology and concept that continues to be hyped in all industries. As a disruptive technology platform, blockchain is impactful, with the potential to redefine the operations and economics of these industries.
The technology brings value to various firms with the way it offers transparency, efficiency and security for financial transactions. In our view, blockchain can also lend its security and efficiency benefits to other areas as well, including Procure-to-Pay (PTP) processes. It can allow authentication around stakeholders, budgeting, service provision, invoicing and payment settlement.
Procure-to-Pay (PTP) is the multi-step process connecting a client with one or more service/product providers. Among other activities, it allows for the identification and authentication of stakeholders, budgeting, service provision, invoicing and payment settlement.
Among the current challenges faced by PTP programmes are generating sustainable cost reductions through disintermediation, efficiency improvement, fraud control and transparency enhancement. Blockchain technology can disrupt PTP processes and more importantly provide huge operational benefits in terms of speed, greater security and decreased workload by facilitating the exchange of information. The following outlines how blockchain technology can bring value to key PTP processes.
- Front-end system: A front-end interface is recommended to authorise vendors, define new catalogs, place purchase orders or sign contracts. This application can be an add-on to the blockchain or could be leveraged through existing procurement systems, if vendors decide to adopt this technology.
- Strong audit trail: As all parties are registered in the ledger, transactions are stored and a tamper‑proof audit trail is maintained. This type of end-to-end visibility into procurement is a well-established practice in the tracking of physical goods.
- Accelerated purchase order management: Purchase order and good receipt data would be exchanged on the blockchain at an accelerated pace when compared to current performance levels. As well, the blockchain could help identify the nearest and most cost-effective vendor within the network. This would help decrease lead time and workload associated with vendor searches, the processing of purchase orders and goods/services receipts.
- Reshaped invoice processing: Invoice scanning would no longer be required – thanks to shared access to the database, with the exchange of invoices supported by the blockchain. This would also help render the reconciliation process far less cumbersome as all authorised parties could review the same transaction, eliminating the need for reconciliations. Blockchain hosted transactions would feed into the company’s general ledger for general accounting and financial reporting purposes.
- Accelerated settlements: These would be accelerated as reconciliations and vendor/end user enquiries would not be required due to complete transparency and real-time access to a shared database. This could potentially disrupt in a positive sense business practices such as the standard D+30 days settlement deadline.
- Streamlined enquiries management: Blockchain’s greater transparency would diminish the need for enquiries and process status follow-ups, thus streamlining current enquiry management and control processes.
- Reduced money laundering risk: By permanently retaining historical payment information, suspicious transactions can be more easily identified.
- Greater security of transactions: This can be attained through a cloud-based contract repository and an integrated e-sign feature that verifies signer identity and authorisation.
In conclusion, adopting blockchain can bring dramatic change and businesses considering blockchain for PTP should first build the full business case, considering the above outline. The assessment scope should include existing PTP assets, processes, and should balance cost considerations.
As blockchain solutions gain momentum, more real-world situations will emerge where information on blockchains simply needs to be modified or removed. Accenture’s redactable blockchain is an innovation for financial services companies that makes it possible to deal with situations in a predictable fashion when things go wrong. An editable form of blockchain will make the technology more practical and useful for enterprise systems as well as accelerate its adoption.
Money talks and electronic gaming evolves
Computer gaming has evolved dramatically in the last two years, as it follows the money, writes ARTHUR GOLDSTUCK in the second of a two-part series.
The clue that gaming has become big business in South Africa was delivered by a non-gaming brand. When Comic Con, an American popular culture convention that has become a mecca for comics enthusiasts, was hosted in South Arica for the first time last month, it used gaming as the major drawcard. More than 45 000 people attended.
The event and its attendance was expected to be a major dampener for the annual rAge gaming expo, which took place just weeks later. Instead, rAge saw only a marginal fall in visitor numbers. No less than 34 000 people descended on the Ticketpro Dome for the chaos of cosplay, LAN gaming, virtual reality, board gaming and new video games.
It proved not only that there was room for more than one major gaming event, but also that a massive market exists for the sector in South Africa. And with a large market, one also found numerous gaming niches that either emerged afresh or will keep going over the years. One of these, LAN (for Local Area Network) gaming, which sees hordes of players camping out at the venue for three days to play each other on elaborate computer rigs, was back as strong as ever at rAge.
MWeb provided an 8Gbps line to the expo, to connect all these gamers, and recorded 120TB in downloads and 15Tb in uploads – a total that would have used up the entire country’s bandwidth a few years ago.
“LANs are supposed to be a thing of the past, yet we buck the trend each year,” says Michael James, senior project manager and owner of rAge. “It is more of a spectacle than a simple LAN, so I can understand.”
New phenomena, often associated with the flavour of the moment, also emerge every year.
“Fortnite is a good example this year of how we evolve,” says James. “It’s a crazy huge phenomenon and nobody was servicing the demand from a tournament point of view. So rAge and Xbox created a casual LAN tournament that anyone could enter and win a prize. I think the top 10 people got something each round.”
Read on to see how esports is starting to make an impact in gaming.
Blockchain is generally associated with Bitcoin and other cryptocurrencies, but these are just the tip of the iceberg, says ESET Southern Africa.
This technology was originally conceived in 1991, when Stuart Haber and W. Scott Stornetta described their first work on a chain of cryptographically secured blocks, but only gained notoriety in 2008, when it became popular with the arrival of Bitcoin. It is currently gaining demand in other commercial applications and its annual growth is expected to reach 51% by 2022 in numerous markets, such as those of financial institutions and the Internet of Things (IoT), according to MarketWatch.
What is blockchain?
A blockchain is a unique, consensual record that is distributed over multiple network nodes. In the case of cryptocurrencies, think of it as the accounting ledger where each transaction is recorded.
A blockchain transaction is complex and can be difficult to understand if you delve into the inner details of how it works, but the basic idea is simple to follow.
Each block stores:
– A number of valid records or transactions.
– Information referring to that block.
– A link to the previous block and next block through the hash of each block—a unique code that can be thought of as the block’s fingerprint.
Accordingly, each block has a specific and immovable place within the chain, since each block contains information from the hash of the previous block. The entire chain is stored in each network node that makes up the blockchain, so an exact copy of the chain is stored in all network participants.
As new records are created, they are first verified and validated by the network nodes and then added to a new block that is linked to the chain.
How is blockchain so secure?
Being a distributed technology in which each network node stores an exact copy of the chain, the availability of the information is guaranteed at all times. So if an attacker wanted to cause a denial-of-service attack, they would have to annul all network nodes since it only takes one node to be operative for the information to be available.
Besides that, since each record is consensual, and all nodes contain the same information, it is almost impossible to alter it, ensuring its integrity. If an attacker wanted to modify the information in a blockchain, they would have to modify the entire chain in at least 51% of the nodes.
In blockchain, data is distributed across all network nodes. With no central node, all participate equally, storing, and validating all information. It is a very powerful tool for transmitting and storing information in a reliable way; a decentralised model in which the information belongs to us, since we do not need a company to provide the service.
What else can blockchain be used for?
Essentially, blockchain can be used to store any type of information that must be kept intact and remain available in a secure, decentralised and cheaper way than through intermediaries. Moreover, since the information stored is encrypted, its confidentiality can be guaranteed, as only those who have the encryption key can access it.
Use of blockchain in healthcare
Health records could be consolidated and stored in blockchain, for instance. This would mean that the medical history of each patient would be safe and, at the same time, available to each doctor authorised, regardless of the health centre where the patient was treated. Even the pharmaceutical industry could use this technology to verify medicines and prevent counterfeiting.
Use of blockchain for documents
Blockchain would also be very useful for managing digital assets and documentation. Up to now, the problem with digital is that everything is easy to copy, but Blockchain allows you to record purchases, deeds, documents, or any other type of online asset without them being falsified.
Other blockchain uses
This technology could also revolutionise the Internet of Things (IoT) market where the challenge lies in the millions of devices connected to the internet that must be managed by the supplier companies. In a few years’ time, the centralised model won’t be able to support so many devices, not to mention the fact that many of these are not secure enough. With blockchain, devices can communicate through the network directly, safely, and reliably with no need for intermediaries.
Blockchain allows you to verify, validate, track, and store all types of information, from digital certificates, democratic voting systems, logistics and messaging services, to intelligent contracts and, of course, money and financial transactions.
Without doubt, blockchain has turned the immutable and decentralized layer the internet has always dreamed about into a reality. This technology takes reliance out of the equation and replaces it with mathematical fact.