Watch How Blockchain Brings Digital Trust To Bidding Wars [VIDEO]
IDC research predicts that at least 25 percent of Global 2000 companies will use blockchain services as a foundation for scalable digital trust within three years. I saw a demonstration of how blockchain could tackle one of procurement’s major challenges ‒ proposals, sealed-bid auctions and other requests for quotations ‒ in this exclusive VIDEO interview at SAP TechEd Barcelona with Raimund Gross, SAP Innovation Manager Blockchain.
Safeguarding bidding against fraud
Whether procuring construction and road work, equipment and supplies, professional services, healthcare, energy and fuel, manufacturing, IT or other goods and services, every organization needs to manage the process fairly and typically, in compliance with a code of conduct. Blockchain has the potential to safeguard bid confidentiality and control leaks, preventing unethical and illegal business practices.
“If bids aren’t kept confidential, the requestor could share quotations with other bidders before a decision is made, unfairly giving advantage to the company able to lower its price accordingly,” said Gross. “With blockchain, someone in procurement wouldn’t be able to use the bid to set prices because the information is completely secure.”
Blockchain’s timestamped transparency prevents new quotes from being submitted after the deadline, or any changes from being made including proposal parameters or bids. “Since the information on the chain is immutable, procurement cannot tamper with any documents, and must open all the bids at the same time,” said Gross. “There’s a digital record of which companies submitted bids and when. Once the bids are opened, no new bids can be submitted. The entire chain is secured.”
Gross said customers can easily extend and enrich existing applications on SAP S/4HANA adding blockchain capabilities, and build new blockchain-enabled applications on the SAP Cloud Platform. “The beauty of this is that the applications share data with very little integration effort.”
If even a small percentage of expert predictions come true, blockchain will build a completely new foundation of digital trust for organizations, transforming operations as well as business relationships. Secure bidding using blockchain is just one of the ways companies will be able to scale trusted business.
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