Blockchain-Enabled Smart Contracts for ERP-Based Procurement Systems

Paul Praveen Kumar Ashok

Abstract: Procurement processes within Enterprise Resource Planning (ERP) systems are essential for managing supplier relationships, purchase orders, and payment settlements. Conventional ERP-based procurement often faces challenges related to inefficiency, manual reconciliation, lack of transparency, and susceptibility to fraud or contractual disputes. Blockchain-enabled smart contracts offer a transformative approach by providing self-executing agreements that operate on decentralized, tamper-resistant ledgers. These contracts ensure automation, trust, and compliance, thereby addressing long-standing limitations in procurement workflows. This paper investigates the integration of blockchain technology with ERP-based procurement systems, focusing on how smart contracts can automate vendor onboarding, streamline purchase order execution, enforce payment terms, and ensure regulatory compliance. The discussion emphasizes architectural principles for blockchain-ERP integration, including transparency, immutability, interoperability, and governance. Various blockchain platforms such as Hyperledger Fabric, Ethereum, and Corda are assessed for their suitability in enterprise procurement environments, considering factors such as permissioned access, scalability, and regulatory alignment. Through reference models and case studies, the paper demonstrates how blockchain enabled procurement enhances efficiency, reduces disputes, and strengthens supply chain accountability. Key challenges including interoperability with legacy ERP, smart contract vulnerabilities, and compliance with global regulations are also explored. The study provides a conceptual and practical framework for designing blockchain-enabled procurement architectures, highlighting their potential to reshape ERP ecosystems and support sustainable digital transformation.

Keywords: Blockchain, Smart Contracts, Procurement Systems, ERP Integration, Hyperledger Fabric, Ethereum, Digital Transformation

How to Cite?: Paul Praveen Kumar Ashok, "Blockchain-Enabled Smart Contracts for ERP-Based Procurement Systems", Volume 13 Issue 9, September 2024, International Journal of Science and Research (IJSR), Pages: 1739-1744, https://www.ijsr.net/getabstract.php?paperid=SR24931090635, DOI: https://dx.doi.org/10.21275/SR24931090635