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RESEARCH ON APPLICATION OF BLOCKCHAIN IN CLOUD ERP SYSTEMS
Thesis · November 2018

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TRANSPORT AND TELECOMMUNICATION INSTITUTE
FACULTY OF COMPUTER SCIENCE AND TELECOMMUNICATION
DEFENCE PERMITTED
Head of Department of Software
Engineering
Associated professor, Dr. sc. ing.
Irina Pticina __________
201___. ______________
GRADUATION PAPER
"MASTER OF ENGINEERING SCIENCE IN MANAGEMENT OF
INFORMATION SYSTEMS"
SUBMITTED FOR AN ACADEMIC DEGREE
Research on application of Blockchain in Cloud ERP Systems
Student: Babu Rajendra Prasad Kuvvarapu ______________ 201_____

__________
(st. k. 59551)
Supervisor: Associated professor, Dr. sc. ing.

Mihails Savrasovs ______________ 201_____ __________
Riga - 2019
CONFIRMATION
I, Babu Rajendra Prasad Kuvvarapu, confirm that I have developed the given graduation
thesis individually for obtaining the degree of Master of Engineering Sciences in Information
Systems Management. By my signature I verify that the given graduation thesis is written
independently and there are no violations regarding the rights of intellectual property of other
persons or plagiarism. The used papers and data sources of other authors are indicated in
references. The text of the submitted paper has never been submitted partially or fully to other
commission for theses evaluation. I confirm that the electronic version of the submitted thesis
meets completely the text of the submitted paper copy of the thesis.
_____________________________ Babu Rajendra Prasad Kuvvarapu

(signature) (name, surname)
3
ANOTĀCIJA
Maģistra darbs „Pētījums par BlockChain tehnoloģijas pielietojumu Cloud ERP

sistēmām”. Darba autors: Babu Rajendra Prasad Kuvvarapu. Zinātniskais vadītājs: Dr. sc. ing.,
asoc. profesors Mihails Savrasovs.
Darbs „Inženierzinātņu maģistrs informācijas sistēmu vadībā” grāda iegūšanai: 62 lpp., 38
att., 10 tab., 40 izmantotās lit. avot., 1 piel.
MĀKOŅPAKALPOJUMI; UZŅĒMUMU RESURSU PLĀNOŠANA; BLOCKCHAIN;

DATUDROŠĪBA
Pēdējo tendenču analīze informācijas sistēmu tirgū liecina par divām primārajām
tehnoloģijām, kurām ir liela ietekme uz rūpniecību. Tie ir: mākoņpakalpojumi un bloķēšanas
ķēdes tehnoloģijas. Abas tehnoloģijas uzņēmumam ir spilgtas, un to pielietojums ir atrodams
ERP sistēmās. ERP izstrāde un izmantošana mākonī nav inovatīva ideja, jo mākoņdatošanas
ERP risinājumu skaits pašlaik pastāv, bet blokķēdes tehnoloģiju izmantošana ERP mākonī dod
papildu ieguvumu no atšķirīgajiem punktiem. Viena no iespējamajām priekšrocībām, ko varētu
dot slūžu ķēde mākoņdatošanas ERP, ir saistīta ar viena uzņēmuma privāto ERP sistēmu maiņu
uz sadarbības platformu starp biznesa struktūru partneriem un ārējiem lietotājiem. Šī tendence ir
īpaši uzsvērta piegādes ķēdes pārvaldības jomā (SCM.
Taču atklātāku mākoņdatošanas ERP sistēmu attīstība vienmēr noved pie drošības
jautājumiem. Šajā gadījumā iespējamais risinājums varētu būt blok-ķēde, jo tā varētu radīt ne
tikai sadarbības platformu, kas balstīta uz mākoņdatošanas ERP, bet arī nodrošināt drošības
mehānismus.
4
АННОТАЦИЯ
Магистерская работа „Исследование об использовании технологии BlockChain в

системах Cloud ERP”. Автор работы: . Научный руководитель: Dr. sc. ing., ас.профессор
Михаил Саврасов.
Работа на соискание степени: „Магистр инженерных наук в области менеджмента
информационных систем”: 62 стр., 38 рис., 10 таб., 40 лит. ист., 1 прил.
ОБЛАЧНЫЕ СЕРВИСЫ; ПЛАНИРОВАНИЕ РЕСУРСОВ ПРЕДПРИЯТИЯ;

BLOCKCHAIN; БЕЗОПАСНОСТЬ ДАННЫХ
Анализ последних тенденций на рынке информационных систем, показывает две

основные технологии, которые имеют большое влияние на отрасль. Это облачные сервисы
и блокчейн-технологии. Обе технологии являются яркими для бизнеса и нашли свое
применение в системах ERP. Разработка и использование ERP в облаке не является
инновационной идеей, поскольку в настоящее время существует множество облачных
ERP-решений, но использование технологии цепочки блоков для ERP в облаке дает
дополнительные преимущества с разных точек зрения. Одно из потенциальных
преимуществ блокчейна для облачной ERP связано с переходом частных ERP-систем
одной компании на платформу для совместной работы партнеров и внешних
пользователей бизнес-объектов. Эта тенденция особенно подчеркивается в области
управления цепочками поставок (SCM).
Но разработка более открытых облачных ERP-систем всегда приводит к проблемам
безопасности. Здесь блокчейн может быть возможным решением, поскольку он может
создать не только платформу для совместной работы на основе облачной ERP, но и
обеспечить механизмы безопасности.
5
ABSTRACT
Master thesis „Research on application of Blockchain in Cloud ERP Systems”. Author of

the paper: Babu Rajendra Prasad Kuvvarapu. Scientific supervisor: Dr. sc. ing., associated
professor Mihail Savrasov.
Paper for obtaining the degree „Master of Engineering Science in Management of
Information Systems”: 62 pp., 38 img., 10 tabl., 40 ref., 1 app.
CLOUD SERVICES; ENTERPRISE RESOURCE PLANNING; BLOCKCHAIN; DATA

SECURITY
The analysis of latest tendencies in the market of information systems, shows two primary
technologies which has high impact on industry. They are: cloud services and blockchain
technologies. Both technologies are vivid for the business and found their application in the ERP
systems. Development and use of ERP in cloud is not an innovative idea, as the number of cloud
ERP solution exists currently, but blockchain technology use for ERP in the cloud gives
additional benefits from difference points of view. One of the potential benefits of blockchain for
cloud ERP is related with changing private ERP systems of single company to the collaborative
platform among partners and external users of the business entities. This tendency is especially
highlighted in the field of supply chain management (SCM).
But the development of the more open cloud ERP systems leads always to the security
issues. Here the blockchain could be the possible solution, as it could create not only
collaborative platform based on cloud ERP, but also provide the security mechanisms.
Contents
INTRODUCTION ................................................................................................................. 8
1. STATE-OF-THE-ART ................................................................................................... 10
1.1. ERP Systems ................................................................................................................ 12
1.2. Types of ERP Systems .................................................................................................. 22
1.3. On-Premise ERP Systems ............................................................................................. 23
1.4. Cloud ERP Systems ...................................................................................................... 24
1.5. Benefits and Challenges of cloud ERP........................................................................... 25
2. OVERVIEW OF BLOCKCHAIN TECHNOLOGY ............................................................... 27
2.1. Blockchain Technology ................................................................................................ 27
2.2. Types of Blockchain ..................................................................................................... 28
2.3. Structure of Blockchain ................................................................................................ 29
2.4. Advantages and Disadvantages of Blockchain Technology ........................................... 31
3. SOLUTION DESIGN AND IMPLEMENTATION.............................................................. 33
3.1. Conceptual description of the Proposed Solution ........................................................ 33
3.2. Design of the Proposed Solution .................................................................................. 34
3.3. Blockchain Implementation in Supply Chain and Food Industry ................................... 43
3.4. Gap Analysis (Centralized Database vs Blockchain Distributed Databases) ................... 45
4. COMPARING THE RESULTS BETWEEN ERP AND ERP BLOCKCHAIN............................. 47
4.1. Development of evaluation methodology .................................................................... 47
4.2. Formulation and description of the criteria framework................................................ 47
4.1.1. CBA ............................................................................................................................................... 49
4.1.2. AHP............................................................................................................................................... 53
4.3. Advantages, disadvantages and limitations of the proposed solution .......................... 57
CONCLUSIONS ................................................................................................................. 58
REFERENCES .................................................................................................................... 59
ANNEX............................................................................................................................. 62
6
LIST OF ABBREVIATIONS
AHP – Analytic Hierarchy Process

AWS – Amazon Web Services
CBA – Cost-Benefit Analysis
Cloud ERP – Cloud Enterprise Resource Planning
COBAL - Common Business-oriented language
CRT – Cathode-Ray-Tube
CSP – Cloud Service Provider
EC2 – Elastic Compute Cloud
ERP- Enterprise Resource Planning
HTML – Hypertext Markup language
HTTP - Hypertext Transfer Protocol
I T- Information Technology
LAN – Local Area Network
MVCC - Multi Version Concurrency Control
ROI – Return on Investment
S.W.O.T – Strengths Weakness Opportunity and Threats
SaaS – Software as a Service
SQL – Structured Query Language
XML - Extensible Markup Language
7
INTRODUCTION
An ERP system is a vast information system that manages all the company information about
the products, employees, production, customers, suppliers, accounting, etc. used by every
enterprise and various sections of the enterprise. The sales department can check their products
prices and their inventory status, can enter sales orders from the customers, make deliveries to
the customers, issue invoices and receive payments. The production section checks the product
balances, place orders and invoice of sold products. The marketing department can make the
forecasts for next year sales. The accounting department track the salaries and production costs
and expenses by the company and generate invoices. The human resource department monitor
the employees working currently in the enterprise and fill the new employee data in the system
and also manages leaves of the employee using the ERP systems.
An ERP system manages all the on-going process in the enterprise will record and monitor all
the process going in the enterprise. To gain these features in all parts of the company core
business process, companies need to invest in the migration of traditionally systems to the
E.R.P systems. This type of data migration for small and medium enterprises are became much
expensive because of the infrastructure and maintenance. To make the ERP systems user-
friendly, ERP vendors like SAP, Oracle, Microsoft, Infor, Epicor are also providing this ERP
systems as On-Premise ERP systems as well as the Cloud based ERP systems which is run on
the cloud as the Software as a Service (SaaS) model.
Relevance of the research:

These kind of ERP systems are expensive to implement on-site; the implementation of an On-
Site ERP system is half the cost of ERP system. In order to reduce the costs, the ERP vendors
are providing these same features in the cloud using the Software as a Service (SaaS) model.
However, the clients are not willing to move from traditional On-Site ERP systems to Cloud-
based E.R.P systems, because of primarily Security Concerns, Data Ownership and some
Performance issues. In this research a peer review of this problem is discussed, and some
recommendations is provided using Blockchain technology and proposing a conceptual
solution design to overcome these challenges facing in the Cloud ERP systems. As it was
already mentioned every enterprise is concerned about their financial data during the migration
process, for this reason enterprise are not willing to store their personal data in the cloud. It is
actual that company data which is stored in the cloud or the third-party storage may be stolen
8
or manipulated. Any enterprise which have small amount of data may be affected less when
compared to a large group of enterprise or an organization.
Research Goal:
To investigate and providing recommendations to the Cloud E.R.P Systems using the
Blockchain Technology. The Focus will be on the factors Data Security, Data Ownership,
Traceability, Trust and Transparency.
Research Subject:
Cloud E.R.P systems using the Software as a Service (SaaS) model.
Research Object:
Challenges facing in the Cloud E.R.P systems namely Security Issues and Data Ownership.
Main steps of the work:

This research work is divided into six main sections, each section is named as chapters and in
every chapter the specific topic area is focused. In the first chapter the overview of the
blockchain technology is discussed and in the chapters two and three domain knowledge is
gained, along with the advantages and disadvantages of the two domains. In the fourth chapter
the solution design of the proposed solution is discussed along with the benefits and limitations
of the proposed solution, and in the fifth chapter the comparison of the proposed solution with
the different kind of analysis is provided to understand the results of proposed solution. And in
the final sixth chapter conclusion is made based on the results obtained from the fifth chapter.
Steps followed in this research:

o Investigate and understanding the domains Cloud ERP and Blockchain Technology
o Pointing out the Benefits and Challenges of this domains
o Analyzing the challenges in the cloud E.R.P systems based on literature review
o Proposing a solution design using the Blockchain Technology
o Comparing the proposed solution with and without of Blockchain Technology for the
Cloud ERP systems
9
1. STATE-OF-THE-ART
All major ERP vendors are working very hard to integrate the Blockchain technology in their
ERP systems because of the features provided by the technology. Which can be used to track
the supply chain and traceback their origin of the supply chain using the distributed ledger. The
importance of integrating blockchain technology with ERP systems not only storing new data
in the distributed ledger but also storing the previous data and stored in the ledger. Most of the
company sensitive data is stored in the silos only, it comprises of 80 percent of the world data.
Blockchain technology issues

Blockchain is a kind of distributed database in which each transaction is stored in a block and
each block is linked with the previous block. These blocks are non-destructible which means
each block is connected to previous block in secure way using cryptography techniques. It
allows either an open type of blockchain or private blockchain which can be controlled by set
of users to participate in that transaction. Usually blockchain networks contain elements like
participants, participant identities, transactions and ledgers and records of the transactions.
Since it is not controlled by a single user there is no single point of failure because of it is
managed by the system itself. Blockchain also eliminates the need for the security experts in
the enterprise. There are many uses in blockchain network Public blockchains allow any user
to participate in transactions as long as the verification process, while private blockchains only
have selected participants to use the network.
ERP issues
The recent study on the ERP systems shows the migration of data from the traditional ERP to
cloud ERP are increased over time. The ERP systems usually provide many integrated
processes of the company core process, the ERP deals with various modules however there are
several modules integrated in the ERP system there some issues in traceability. It is a very hot
area where every enterprise is planning to develop solutions for their industry specific needs
using the Blockchain technology. As mentioned in the article Mearian, L. (2018) IBM
demonstrated a Hyperledger-based blockchain integrated with the retail corporation's to tracks
shipments of fresh food products like fruits. This Blockchain project in ERP system focus on
the development of shipment tracking of the food products like fruits and it will help to track
to the origin of the fruit and its branch. This will help to track the shipments using the
blockchain, everyone large enterprise is interested in building blockchain solutions in the ERP
systems which can add great value to both the company.
10
Managing the supply chain and maintenance
Another Swedish company demonstrated the blockchain integrated in the ERP systems. The
company called “IFS labs” which is software service provider having large client base most of
them are commercial airlines like KLM, Emirates, Southwest and South China airlines. The
company also demonstrated the use of blockchain in the asset’s management, log verification
and tracking of the shipments which can be delivered to various parts of the world. This can be
used in the plane parts tracking which having a million of the parts during the maintenance of
the flights.
The usage of the blockchain technology will help to maintain a verifiable record, this
implementation in the ERP systems can help to track the shipments and can be used in the
various modules of the ERP. The blockchain may not replace the present ERP system but it
will improve the performance of the ERP systems in various domains where it has challenges
in the present system. This will give transparency in the transaction and the process involved
in the ERP systems.
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1. OVERVIEW OF ERP SYSTEMS
1.1. ERP Systems
An ERP system is an immense data system that oversees data about an organization's items,
clients, providers, workers, creation offices, budgetary adjusts, and so on. It is utilized by each
division in an association and by generally representatives. The business office can check costs
of items and their stock, enter deals orders from clients, make conveyances, issue solicitations
to clients and get installments. The generation division utilizes it to check stock adjusts of
items, make creation orders, oversee generation plans, record the receipt of completed or in-
advance requests. The promoting division can design request and make deals conjectures for
the following deals time frame. The money division utilizes it to oversee accounts payables,
accounts receivables, enter installments made by clients and installments made to providers,
produce the monetary record and benefit and misfortune proclamations toward the finish of a
bookkeeping period. The human relations office tracks all workers in an organization, their
title, date of joining, division, and compensation. Each new representative is added to the
system when they join the organization even tough, If they quit the job after some days their
data will also shows in the system. Table 1 demonstrates to you a rundown of assets utilized
by different sections of an organization. Attempt to recognize whether the things in the
rundowns allude to a physical or a data asset. You can likewise think about an asset as a benefit
of an association.
Table 1
Physical and information resources of an organization
Production Sales Marketing Human Accounting
relations
Plants Customers Plans Employees Receipts
Machines Prospects Strategy Departments Payments
Products Sales Markets Units Receivables
order
Materials Products New Skills Payables
products
Production Prices Contacts Asset
orders values
Purchase Liabilities
orders
An ERP system manages all the resources of an organization or enterprise also called as
enterprise system. Every transaction that takes places in a company will be recorded in the ERP
system in real-time. To know real-time a brief historical overview of how ERP systems is
needed. In the early 1960s, it was the era of the mainframe. A very large central computer could
12
cost several million dollars and required a large installation in reasonable weather conditions.
Only large companies can afford that kind of mainframe computers and that other companies
rent on a monthly basis. Figure 2 shows the architecture of mainframes accessed through
"dumb" terminals because they have no computational power. They were like TV screens, also
called CRT monitors (Kumar, 2016).
Figure 1. A mainframe connected to "dumb" terminals (Kumar, 2016)
The major mainframe computers were IBM 360 and the programming language used in that
time was COBOL. Most of the Fortune 500 companies developed many applications using
COBOL programming language. Initially, in the 1970’s, The sales department developed a
sales reports program generated automatically every month based on sales, product, region,
customer and salesperson. Although there are no PCs or computers at the time, each report can
be created using large mainframes at the desktop level.
There is no possible way to generate the sales reports individually from the user location. The
general sales are being generated from the mainframe computers which are handled by the
large enterprises. Usually companies send their raw data is collected from the users or
customers are sent to the bureau. The bureau receives the request from the users and make the
reports monthly, the sample sales order are shown in Figure 2.
13
Figure 2. A Sample Sales Order (Kumar, 2016)
If a manager of the company wants to view the summary reports Figure 3 for the previous
month, he can request the bureau about the previous month and the bureau will send the reports
in the batch mode process.
Figure 3. A sample sales summary report (Kumar, 2016)
The batch mode process will be collecting all the raw data and generating the reports once at a
time. It will be a process of monthly where the reports will be generated monthly the user can’t
have the access to print the sales report or summary report of current month.
14
This batch mode is delayed because you must consolidate all one-month jobs into a stack and
the system can run the program. Figure 4 shows an example of batch processing. In the 1980’s
spreadsheets like VisiCalc and Excel gives access to write the data in their own computers. It
gives the opportunity to print and manipulate their own data form their own pc’s, this is the
real time process figure 5.
Figure 4. Batch Mode processing overview (Kumar, 2016)
Figure 5. Real-time processing (Kumar, 2016)
The first Apple I computer was released in 1979, By the late 1980s, early 1990s every employee
have their own PC as the prices became more affordable the transition gave freedom to start
experimenting. And Further, they developed a new program where they can save and fill the
data and made the data filling easy and implemented checking of the data (see Figure 6)also
known as validating. Thus, a date field could be checked for format ("30-Feb-2013" is not a
valid date), a number field could only be allowed and they also used the character format and
decided the characters length. The sample validator program is shown below.
15
Figure 6. A data entry and validation program (Kumar, 2016)
Other developments in different sectors of the organization or enterprise where they can do the
forecasting of the company performance and sales order. This also improves various features
in the supply chain also where they can track delivery of products. They also developed the
production sector also to check the inventory and track the orders placed and the pending orders
which are overdue to ship to the customers.
As a result, everyone has their own kind of system where they can store and process the data.
Each system has different kind of data which had to be stored in the storage to access it anytime
they want. This gave rise to silos a type of information system where the data is stored and
retrieved when necessary (Figure 7). This kind of improvements solve one problem and creates
another problem, to illustrate let’s just say if a customer calls a sales representative and the
sales representative doesn’t have that kind of information in their system.
So, they usually call the other departments and ask them about the availability and delivery
time. After getting the confirmation form the other department, they will call back the customer
and update about the request raised by the customer and update the order. Usually this kind of
lengthy process results in wastage of time, the new development of the silos information system
(Figure 8) solves some of the problems but not all the problems facing by the users or the
systems itself.
To overcome these challenges faces by the silos systems also called as the information system
the evolution process introduced latest technology where the two systems can be interacted in
real time. This latest technology will be discussed in the next sections.
16
Figure 7. Interaction between two departmental silos (Kumar, 2016)
Figure 8. Silos information system (Kumar, 2016)
Introduction to the internet

The next big step in the evolution process is the internet in order to the solve the time delays
in the information system the internet is pushed to every computer to use its advantages. The
user can access different department data in their own silos information system with the help
of internet using the routers, hubs and ethernet as shown in the below figure 9. This is general
architecture and connecting of different personal computers or information system silos to the
internet and other department computers.
17
Figure 9. A LAN with PCs, servers, Ethernet cards, routers and hubs (Kumar, 2016)
The evolution of information systems made a huge impression after the introduction of the
internet and the possibility of connecting two different systems together using the internet
become a major breakthrough. By the latest advancements the sales representative can check
the goods availability with in less time than the previous mode of silos information system.
(see Figure 10). This kind of interaction between the system gives the access the data stored in
different systems can be accessed in the current system to illustrate see figure 10.
Figure 10. An employee in the sales department can access current inventory herself
(Kumar, 2016)
18
After becoming successfully implementing the internet and removed the gap between the
interaction between the computers. There is new kind of problem rises in the process, the
problem is with the data storage all this inventory, production and sales are need by the different
users within the enterprise. So to solve this issue they need to store the data in a centralised
location where it can be accessed by every user see (figure 11 and 12) apart from the old
distributed kind of data storage.
Figure 11. Centralized data storage process overview (Kumar, 2016)
Figure 12. The data is distributed across three data stores (Distributed Data) (Kumar, 2016)
19
This gave rise to different kind of technologies each one has their own specific goal; the
technologies will be the server technology and file system technology and the web server
technology and the mainly client server technology where the computing is done in the client
location. The file system will manage the all the data files stored in the system and give access
to its users. The database system is used to search the data base of the requested data and giving
the validated results using the Structured Query Language also called as the SQL. The query
will help the user to look for the specific data stored in the system.
Then the client server technology will use the computing power available in their systems and
produce the results, also called the process involved in the tasks. The processed results will be
available to the users by different kinds of devices and systems. The web server or the web
page server will store the data about the pages in the server for their webpages and provide this
information to the users using the web server. If user want to access a webpage then the user
requests the webpage using his devices.
The client server model was built upon the base of request and reply model. When user want
to access something through the web he send a request using the web to the server stored in the
client location. Then the server receives the request and process the request and sent the
requested data. The interaction between the server and user is done in HTML format the user
directly doesn’t understand it, so the web browser decode to it to understandable by the user.
How this seamless interaction between the users, clients, servers, file systems and webpages
are happening. This is done by the internet, if a user initiate a request then the server process
the request and user get the data in HTML file and browser decodes it. These connectivity
between different devices is done by providing each system a unique kind of code like the
telephone. This helps to exchange data between different systems called the integrated
information systems. Later it was in the all departments of the organization.
Figure 13. A client interacting with a server (Kumar, 2016)
20
These integrated systems are widely used in every part of the enterprise/organization it spread
to use in all kind of resources and planning process, later they are converted as the standard
ERP packages. Later different vendors came to develop their own type of ERP systems the key
players will be the SAP and Oracle. The SAP was founded in the year 1972 based in Germany,
in the year 2012 the made a revenue of more than $20 billion dollars. SAP has the largest
market share in the ERP Business the large number of companies use the SAP ERP systems
this includes the fortune 500 companies. Their popular product is SAP ERP R/3 which was
used for decades, and they also introduced new products like SAP Hanna Object One etc. they
also provide services to the industries like banking insurance and health care
SAP has the largest market share in the ERP market. A large number of Fortune 500 companies
use SAP. SAP R / 3 has been its flagship product for several decades. In recent years, SAP has
launched new products such as Business Objects One, SAP Hanna, etc. They offer both generic
solutions for different sectors and specific solutions in the sector such as insurance, banking,
health, etc.
The history of oracle was started with the database systems founded by the Larry Ellison. This
is the present largest database company the entry into the ERP systems came into the picture
after it acquired a company which deals with financial management and human relationship
management. The company is called the J.D Edwards and part of it called the PeopleSoft. Both
SAP and Oracle provide software for many of their customers with a total revenue of both
combines is $1 Billion Dollars. The total revenue for oracle is about $37 Billion Dollars form
all of its products and services combined with the majority of its revenue comes from the
databases. The other vendors like Microsoft and Infor are also rising it users base by providing
great products and services to the small business also.
The popular SAR R/3 systems usually contains different type of modules in the first stage they
used for the backend operations of the company like the accounting, sales and distribution.
Later this will expand to the other departments like production supply chain and human
resources. There are several domains in the ERP suite the overview of the SAP R/3 is shown
in the below figure. Based on the industry specific needs they tend to implement different kind
of modules in their enterprise.
21
Figure 14. SAP ERP modules (source: SAP)
1.2. Types of ERP Systems
The ERP system is business management software where it manages all of its core business
process. There are two types of ERP systems available right now in the current market, they
are
o On-premise ERP systems
o Cloud Based ERP systems
On-Premise ERP systems are traditional type of ERP systems which can be installed on the
client location or the enterprise. Based on the enterprise size the ERP services are customized.
These type of ERP systems are usually very expensive
Cloud ERP systems are web-based ERP systems providing the services to the enterprise using
the Software as a Service model (SaaS), which are usually cheap when compared to the on-
premise ERP systems. These are run on a remote server which can be accessed by any user
with a click of a button.
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1.3. On-Premise ERP Systems
On-premise enterprise resource planning (On-Premise ERP) (figure 15) are installed on the
client location, these are usually installed by the large enterprise to meet their needs. However,
there are services like cloud ERP systems clients or users more likely prefer to install in their
location. This is mainly because of the sensitivity of the data every large enterprise like to keep
their data stored in their storage systems only rather than on the remote server. By doing this
they have the security from the enterprise and other outside users have less access to these
systems.
The On-premise ERP systems also have this additional feature called the customization of the
ERP systems. If an enterprise wants to make some changes in the ERP systems, their I.T staff
would have the ability to change them by adding some parts or removing some parts. However,
these parts are expensive to purchase, and the customization are often becoming expensive too.
Most of the experts comparing this traditional ERP systems with the cloud ERP systems in
which traditional ERP systems are expensive and the Cloud ERP systems are less expensive
when compared to the traditional ERP systems. The experts also pointed out that they are like
owing the data by using the traditional data versus renting the ERP leads to less ownership of
the data. With on-premise ERP, companies have more control and ownership over the data.
Figure 15. General Model of ERP (Source: The Institute of Chartered Accountants of India)
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1.4. Cloud ERP Systems
Cloud ERP systems are type of ERP systems (Figure16) which can be offered on rent basis,
these ERP systems are designed on software as a service Model (SaaS). This can be achieved
by the usage of the cloud computing where the computing process is done on a remote server
using the cloud computing model. This idea saves lots of million dollars because the enterprise
only has to pay for the service only instead larger upfront costs.
The cloud service model also has different variety of products (Figure17) based on the market
and industry need these are developing over the time.
o Software as a service (SaaS)
o Platform as a service (PaaS)
o Infrastructure as a service (IaaS)
Figure 16. ERP system overview (Ali, 2016)
Figure 17. Cloud Service Models (Elmonem, 2016)
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1.5. Benefits and Challenges of cloud ERP
There are many advantages a disadvantage in the cloud ERP systems, based on the literature
review from (Elmonem, 2016). These are mentioned below as Benefits and challenges.
Benefits of cloud ERP

o Lower upfront costs:
o Lower operating costs:
o Rapid implementation:
o Scalability
o Improved accessibility, mobility, and usability
o Easier integration with cloud services
o Improved system availability and disaster recovery
o Cost transparency
o Sales automation
o Using security standards
o Free trials
Challenges of Cloud ERP

o Subscription expenses
o Security risks
o Performance risks
o Customization and integration limitations
o Service Level Agreements (SLAs) Issues
o Sensitivity of the information
o Control over the cloud ERP
These benefits and challenges (see figure 18) are based on the literature review (Mohamed A.
Abd Elmonem, Eman S. Nasr, Mervat H. Geith, 2017). This is done during the years between
2011 to 2016 during this period almost 31 research papers are studied and produced these
results in the literature review. In order to overcome some of these challenges of cloud ERP
the implementation of blockchain technology is seems to be on the best solution. The overview
and explanation of the blockchain is discussed in the next chapter.
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Figure 18. Benefits and Challenges from the literature review (Elmonem, 2016)
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2. OVERVIEW OF BLOCKCHAIN TECHNOLOGY
2.1. Blockchain Technology
A blockchain is a continuous list of records as the name itself says it stores all the transaction
records in the form of blocks. Each block is connected to the previous block like a chain in
which each block is connected in a secure way using cryptographic techniques. Each block will
generate a public and private key, the public key will be available for transaction processing
and private key is used for the secure connection between each block. Blockchain runs on peer-
to-peer network which gives an advantage of the decentralized process by using this the
transaction authentication is done by different users in the blockchain network. The blockchain
technology has various potential use cases like transparent record keeping, health-record
maintaining, voting and many more.
History
The first work on a cryptographically secured chain of blocks was described by (Stuart Haber
and W. Scott Stornetta, 1991,1992). (Bayer, Haber and Stornetta, 1992) incorporated Merkle
trees design, which improved its efficiency by allowing several documents to be collected into
one block. The first blockchain was conceptualized by a person (or group of people) known as
Satoshi Nakamoto in 2008 (Nakamoto, 2008). It was implemented on cryptocurrency called
bitcoin, where the blockchain works as the public ledger to store all the transactions done that
blockchain network. That's why Bitcoin is the first project that uses Blockchain as the central
process. The words block and chain were used separately in the original Satoshi Nakamoto
document (Nakamoto, 2008). Later it became popular as “Blockchain” in the year 2016, from
this major success the latest improvements on blockchain are started as output blockchain 2.0
is emerged.
The advantages of Blockchain technology outweigh the regulatory issues and technical
challenges. Blockchain 2.0 also gives an advantage to develop smart contracts which can be
used to eliminate the consensus between two parties during the process of transaction. This can
be achievable by the developing the blockchain using the parties involved in the transaction
and made transparent contracts prior to the transactions. During the transaction the smart
contract acts as an authenticator during the process of transaction.
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Figure 19. Blockchain Overview (Source: halpernfinancial.com)
2.2. Types of Blockchain
There are three different types of blockchain available right now, they are
o Public blockchains
o Private blockchains
o Consortium blockchains
Public blockchains
A public blockchain doesn’t have any restrictions anyone can send and receive transactions,
and anyone can become a validator where he can authenticate the transactions. Usually, such
type of networks can take part of the its transaction amount and credits it to the validator. The
most popular public blockchain are “The Bitcoin” and “Ethereum”
Private blockchains
A private blockchain is permissioned blockchain network not everyone can access or join in
the network to make the transactions these are mostly suitable for business. The participants in
the network are managed by the network administrators. This provide the security to the data
of the business not every company is willing to lose their sensitive data.
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Consortium blockchains
A consortium blockchain is likely type of permissioned blockchain where the participants are
located in the different geographical locations often called as semi-decentralized blockchain
network. These blockchain are also monitored by the network administrators and they use the
trusted nodes to run the blockchain network in different locations.
2.3. Structure of Blockchain
A blockchain is a distributed and public digital record that records transactions between
different participants in the network. Blockchain stores the data of the transaction in the form
of blocks in which each block is attached or linked to the previous block in a secure way using
the cryptography techniques. Each block is connected to previous block with the time and date
of the transaction like timestamping each and every block in the network. By this design
these blocks can’t be damaged and cannot be edited without changing all the blocks. A database
of the blockchain network operates autonomously with the peer-to-peer network and a
distributed time stamp server.
Blocks
Blocks hold information of valid transactions that are hashed and encoded into a Merkle tree.
Each block contains the cryptographic hash of the previous block adding the transparency to
these blocks and form a chain called the blockchain by the name itself. Sometimes separate
blocks are produced simultaneously creates a short-term fork during this the block which had
a higher value will be selected during the process. blocks which are not being selected in the
chain are called orphan blocks.
Block time
The blocking time is the average time to generate a block in the blockchain network during the
transaction process. Some blockchains creates a new block every five seconds which makes
the transaction to complete very fast in time. In cryptocurrency terms, if a blockchain network
has shorter block time then the transactions in that network are very fast time transactions. For
example, the block time of Ethereum is 15 seconds and bitcoin have the larger block time of
10 minutes.
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Decentralization
By storing data centrally, the blockchain eliminates the risks by storing its transaction in a peer-
to-peer network. Usually the central database has the centralized storage solution which creates
a central point where the hackers can target to break in to the system. Blockchain doesn’t have
any central point instead it has a peer-to-peer network where every peer act as a node.
Blockchain has encryption using the public key and private key, a public key (long random
numbers) is an address on the blockchain.
A private key is like a password that allows the owner to access his digital assets. The data
stored in the blockchain is not destructible. Data quality and transparency are maintained
through massive database replication and trust. There is no centralized "official" copy, and no
user is "more reliable" than anyone. The extraction nodes validate the transactions, add them
to the block they create, and transfer the completed block to other nodes via the Blockchain
network. Block strings use different time stamping methods, for example, for example, a work
item to serialize changes.
Openness
Open block chains are easier to use than traditional property registers that are open to the public
but still require physical access. Since all primitive block chains were illegal, the definition of
blockchain was controversial. This technique is being disused by the many experts where this
technique of using the time stamping can be used in private blockchains. These blockchains
serve as a distributed version of multi version concurrency control (MVCC) in regular
traditional databases which are located centrally.
Permission less blockchain

The permissionless blockchain are open can be accessed by any user. The network peers act as
nodes and the blockchain network will protect the data quality without the need for any third-
party verifications. Cryptocurrencies like bitcoin uses the HashCash puzzle to continue the
blockchain. HashCash was designed in 1997 by Adam Back, Financial institutions like baking
industry doesn’t consider the blockchain in their core process but the importance of blockchain
in chain is increasing. The most popular public blockchain is bitcoin which has a highest market
capital.
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Permissioned (private) blockchain
Permissioned blockchains are mostly suitable for the business which can provide access to the
participants using a control layer. The private blockchain doesn’t have validators to validate
the transactions like the public blockchain. In private blockchain network admin will act as the
validator. Permissioned blockchains also called as 'consortium' or 'hybrid' blockchains.
2.4. Advantages and Disadvantages of Blockchain Technology
Advantages of Blockchain
By storing data centrally, the blockchain eliminates the risks by storing its transaction in a peer-
to-peer network. Usually the central database has the centralized storage solution which creates
a central point where the hackers can target to break in to the system. Blockchain doesn’t have
any central point instead it has a peer-to-peer network where every peer act as a node. This can
be used to mitigate the risks and improve data quality and data transparency.
Cryptocurrencies
Most cryptocurrencies use blockchain technology to record transactions in a distributed ledger.
Both the Ethereum and bitcoin run on blockchain network many other companies and
government organizations are planning to launch their own kind of cryptocurrencies. The
recent report from verge website says the Facebook also planning its own cryptocurrency. The
Estonian government also launched its own crypto currency called “Estcoin”.
Smart Contracts
Blockchain-based smart contracts are contracts which can be programmable by the blockchain
developers can be executed without the need of the human involvement. The smart contracts
act as escrow during the time of transaction. The International Monetary Fund describes the
smart contracts as good feature which improve transparency and trust between the parties
involved in the transaction. However, this is not fully developed because of the legality of the
parties or entities involved in the process.
Financial Services
Major companies like Deloitte and UBS are planning to implement this blockchain distributed
technology in their systems. But this is still in the proof-of-concept process only. The focus of
integrating blockchain technology will be provide more benefits in the upcoming years.
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Other uses
Blockchain technology can be used to create a permanent, public and transparent accounting
distributed ledger system. The major other areas where blockchain technology can be used are,
o Electronic Voting
o Enterprises
o Food Industry
o Governmental Institutions
o Healthcare
o Insurance
o Supply Chains
Disadvantages of a Blockchain
(Nikolai Hampton, 2016) pointed out in Computerworld that "There is also no need for a '51
percent' attack on a private blockchain, as the private blockchain already controls 100 percent
of all block creation resources. If an attacker targeted the blockchain creation tools on a private
corporate server, attacker can take control of 100 percent of their network and alter transactions
however he wanted".
The other challenges of the blockchain are

o Wastage of the unused block
o Cost to maintain blockchain network
o Slower transactions
o Small distributed ledgers
o Hard and soft forks
o Unchangeable smart contracts in case of error code
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3. SOLUTION DESIGN AND IMPLEMENTATION
3.1. Conceptual description of the Proposed Solution
The usage of ERP systems in every industry is increasing over time. In order to provide
efficient services to the customers, ERP services is also providing their whole suite of
applications in the cloud as Cloud ERP system using the software as a service model (SaaS).
However, the Cloud ERP is fast and less expensive, but the users are not willing to migrate
from the traditional ERP systems to Cloud ERP system. As Mohamed A. Abd Elmonem (2017)
pointed out some challenges in Cloud ERP systems are “Due to high availability over the cloud
the security risks also increase. Handling security issues for could ERP is a challenging and
complex process and it also discussed the security risks as a challenge repeated in 23
researches, while performance risks repeated in 19 researches and the Data Ownership repeated
in 8 researches”.
To overcome some of the challenges facing in the Cloud ERP systems Blockchain Technology
will be a possible solution to overcome these challenges which are facing by the Cloud ERP
systems. The blockchain technology is developed by the author Satoshi Nakamoto. He also
explains the concept of the ‘Distributed Ledger Technology’ in his research paper. This
distributed ledger technology can be implemented in the cloud ERP systems which will provide
the Data Security, Transaction Traceability, Transparency, Data Ownership, Encryption and
Trust. These features are in-built functionality for the blockchain, by integrating this
Blockchain Technology in the cloud ERP will reduce these challenges after successful
implementation.
The proposed solution of this research is compared with different kind of analysis like CBA,
AHP and Composite Indicators are used to showcase the usefulness and important changes this
technology will bring after successful integration.
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3.2. Design of the Proposed Solution
The overall solution framework for the Cloud ERP systems is based on the latest trend called
the blockchain’s “distributed-ledger technology”. This solution provides a conceptual solution
in order to overcome the challenges facing by the Cloud ERP systems. The solution design
consisting of diagrammatical representation of the blockchain technology in the cloud ERP
systems where it can be installed or integrated with in the cloud ERP system architecture.
However, the blockchain technology is a vast area, to understand the importance in the cloud
ERP systems this research is focusing on the majorly three things namely Data Security,
Transaction Traceability, Transparency, Data Ownership, Encryption, Trust Smart Contracts.
In addition to that, some insights for supply chain and manufacturing modules of the ERP
systems to understand the usefulness of the blockchain technology in the cloud ERP systems.
The solution design follows the process of firstly the deeper explanation of the ERP system
architecture and the clouds ERP system architecture and finally where to implement the
blockchain technology in the existing cloud ERP systems.
ERP SYSTEMS
Enterprise resource planning systems or enterprise systems are software systems which are
used for the business management. It containing different modules supporting different
functional areas such as
o Accounting,
o Distribution,
o Financial,
o Human Resource Management,
o Inventory Management,
o Manufacturing,
o Planning,
o Project Management,
o Sales,
o Service and Maintenance,
o Supply Chain Management,
o Transportation And E-Business.
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ERP software provides transparent data integration between all modules in an enterprise in one
single application. By this integration the data flow between all the functional areas of
enterprise are constantly updating and viewable by every user. ERP systems allows companies
to implement a single integrated system by replacing the decades old legacy information
systems.
Figure 20. ERP Architecture
This above Figure20 shows the general architecture of the ERP systems and hoe different
functional areas are being connected to one centralized system. There ERP systems usually
have different type of functionality based on the enterprise these are considered as the ERP
modules. To illustrate the ERP modules, see Figure 21 and Figure 22. In the early stages of
ERP systems, it only handles specific modules like sales, accounting and Human Resource.
Later it extended its services to various domains as shown in the Figure 21.
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Figure 21. ERP Modules overview
Figure 22. ERP Modules
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Cloud ERP Systems
The world is changing very rapidly in terms of business systems, and industries need highly
specialized solutions to detect the trend. Cloud computing is a new model where the computing
is done in remote server. The user doesn’t need to have high-end hardware to do the processing.
The user accesses this remote server using the web browser, an internet service provider is used
to connect to the remote server via the Internet. Another third-party manages the resources
needed by the remote server.
For example, Amazon Web Services provides its Simple Storage Service (S3) to process the
data stored on your server using Elastic Compute Cloud (EC2). The General process of the
cloud computing is shown in the below diagram Figure 23.
Figure 23. Cloud Computing Process
Therefore, the business will definitely benefit from this type of computing platforms. Some of
the benefits could be lower initial costs, less time to start new services, lower cost of ownership,
a more efficient use of virtualization and, most importantly, a simpler disaster recovery.
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Figure 24. Benefits of ERP based on the literature review (Elmonem ,2016)
Figure 25. Challenges in Cloud ERP based on the literature review (Elmonem ,2016)
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“However, Cloud computing brings many benefits but the availability of the software online
in the cloud opens many doors for security threats and users are considering of the aspect of
loss of data ownership for being stored in the remote servers of the cloud vendor” as mentioned
in Mohamed A. Abd Elmonem (2017). To eliminate these challenges, as shown in the Figure
25, the upcoming and the latest blockchain technology is the possible solution to maintain Data
Security, Transaction Traceability, Transparency, Data Ownership, Encryption, Trust and
Smart Contracts for the data which is being stored in the cloud.
Blockchain Technology
A blockchain originally known as block chain, is a continuously list of records, called blocks.
A blockchain is a continuous list of records as the name itself says it stores all the transaction
records in the form of blocks. Each block is connected to the previous block like a chain in
which each block is connected in a secure way using cryptographic techniques. Each block will
generate a public and private key, the public key will be available for transaction processing
and private key is used for the secure connection between each block. Blockchain runs on peer-
to-peer network which gives an advantage of the decentralized process by using this the
transaction authentication is done by different users in the blockchain network
Figure 26. How Blockchain Works (Source: The Economist)
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Figure 27. Blockchain Overview (Source: Appirio Hub)
Figure 28. Blockchain Technical Representation with the Hash Generation

(Nakamoto, 2016)
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Cloud ERP Blockchain
Cloud ERP solutions are provided via the Software as a Service model (SaaS). As discussed
earlier about the importance of blockchain technology. It has the ability to connect to various
business application like Enterprise Resource Planning (ERP), Customer Relationship
Management (CRM), Warehouse Management System (WMS) etc. By connecting distinctive
business applications with the customer can achieve business success through the Blockchain
Technology.
There are a lot of benefits in integrating these systems with blockchain, Cloud ERP with
blockchain will strengthen all its process and it enhance the challenges which are discussed
previously in the literature review like the Data Security, Transaction Traceability,
Transparency, Data Ownership, Encryption and Trust.
Blockchain
technology
Figure 29. Proposed Cloud ERP With Blockchain
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Figure 30. Blockchain Architecture (Muneeb, 2016)
The above and below shown Figures 30 and 31 are cloud computing framework and blockchain
architecture. In the proposed solution framework, we are going to replace the centralized
database with the Blockchain’s ‘Distributed Ledger’ Technology. The conceptual design of the
solution contains the diagram of the cloud ERP system with the blockchain integration on the
cloud. The solution design of this not yet complex but it will get the work done in a nicer
manner.
Figure 31. Cloud ERP Vs Cloud ERP with Blockchain
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3.3. Blockchain Implementation in Supply Chain and Food Industry
Supply Chain and Manufacturing are the one of the best modules to demonstrate the Cloud
ERP Blockchain. Usually the Supply chains and Food Industry use databases with on-premise
computing capabilities. The main vendor of this ERP systems are Oracle, IBM, and Microsoft.
A new generation of cloud computing platforms are introduced to run on cloud, which gives
an advantage to process and store the data in remote location for lesser costs.
In today’s world Supply Chain plays a vital role in everyone’s life. But the details of the
products when we buy products something like this are still missing. For example,
o Farming products: when the product is taken out from farming and what type of
pesticides did the used what type of measures they took before shipping.
o Meat products: How and where were the animals are raised? How hygienic and healthy
are they?
o Automotive: What are its components, and are all of them traceable till the raw
materials?
Figure 32. Supply chain Process Overview (Asiimwe, 2017)
The major problem which is encountered in the supply chain is ‘Transparency’. why it is
important for various companies is to verify and validating the quality and authenticity of the
products is more important to a user. By having the traditional on-site computing and storing
data leads to this issue. There is no proper way to investigate and locate an unethical activity
related with the supply chain of the product.
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Based on these experiences it is profound that the need of the latest technologies in the supply
chain is necessary. To address this challenge the Blockchain Technology is a one of the suitable
solutions for the supply chain to provide the ‘Transparency of the Products’. To demonstrate
blockchain can help to trace the entire supply chain of the product. There is no proper way in
the current time to provide this type of transparency easily by applying blockchain technology
we can achieve this.
Figure 33. Supply chain With Blockchain General Overview
An example of a blockchain transaction in the supply chain will be the register of transferred
goods between two parties which can be identified as two addresses in the Blockchain
Transaction. Blockchain will store all the information like location, date, price, and quantity of
the products in to the distributed ledger. The openness of the blockchains chain of blocks would
allow each transaction, like the products, to trace back to its origin. The decentralized ledger is
impossible to manipulate because each node of the Blockchain network have the copy of the
ledger. The cryptographic public and private keys are used to protect the ledger each and every
block is linked to previous block. In fact, it is considered as the most un-hackable ledger. It is
revolutionary in many ways,
o World’s first distributed consensus system
o World’s largest distributed peer-to-peer network
o World’s first and largest write-only public ledger
In future it will be used in each and every application over time can become a core function
for many business and institutions.
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Figure 34. Blockchain Implementation in Supply Chain in food industry
The usage of blockchain in the supply chain of food industry is shown in the above figure 34.
This blockchain technology will act as the key element while storing the important data of the
products in the cloud storage using the Blockchain Technology. However, this kind of
implementation of Blockchain Technology in cloud ERP gives benefits like data security and
Data Ownership and Transparency and traceability. But the field is still wide open for the
improvement of blockchain. The Blockchain Technology is analyzed with a point by point
investigation of conventions for approval and address hashing in a conveyed system with the
freely accessible data, accordingly making the data un-hackable, which is the key player of
straightforwardness and validness.
3.4. Gap Analysis (Centralized Database vs Blockchain Distributed Databases)
The Technological Gaps between the cloud ERP systems and the proposed Cloud ERP with
blockchain are evaluated by conducting a “GAP Analysis”. The gap analysis is a business
analysis technique which is used to provide the insights of the technological gaps form the
existing system and providing insights and recommendations for the development of a solution
to overcome these challenges facing in the current Cloud ERP system. Another analysis used
to check the proposed solution is SWOT analysis as the name itself says it gives a brief
overview of the proposed solution strengths, weakness, opportunities and threats. The proposed
solution is Cloud ERP with Blockchain Technology which is supported by the distributed
ledger technology. The strengths will be considered as Data Trust, Traceability, Data Security,
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Transparency, Smart Contracts. The usual Cloud ERP systems are designed based on the
architecture of centralized database and the proposed solution with blockchain technology will
be built on the Current trend of Distributed Ledger Techniques with the support of Blockchain.
The Solution will be having the distributed ledger system, where each and every transaction is
stored in to blocks. Each block is linked to the previous block in a secured way using the
cryptography techniques. The below Figures 35 and 36 are the pictorial representation of the
centralized database and distributed ledger database systems.
Figure 35. Centralized Database Overview (Patil, 2014)
Figure 36. Centralized vs Distributed Ledgers overview
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4. COMPARING THE RESULTS BETWEEN ERP AND ERP
BLOCKCHAIN
To evaluate the results between these two technologies we are going to apply different
approaches based on the cost benefit analysis, analytical hierarchical process and composite
indicators. From these graphs are obtained separately and can be compared the results. Based
on the results discussed her we are going to provide the feedback for the integration of
Blockchain in the cloud ERP systems. In addition to this research the deeper research is done
on different ERP modules and my research main area will be supply chain management
module. This technology can be used in different ERP modules as well as like finance and
Accounting module and warehouse management module respectively. To compare some of the
internal process in the system is sometimes hard to present on the paper and hard to
demonstrate. But here we can provide a research insight by providing some illustrations,
diagrams and graphs or which is more appropriate to present this complex idea in a paper.
4.1. Development of evaluation methodology
The evaluation methodology for this proposed solution is based on the case studies from the
literature, and also to gather requirements to evaluate the proposed solution using the cost
benefit analysis. The output of this result gives how an enterprise can save money by migrating
from traditional ERP systems to cloud ERP systems. Another evaluation methodology will be
the Analytic hierarchy process which can evaluate the proposed complex solution based on
mathematics and psychology.
4.2. Formulation and description of the criteria framework
In my research that my solution is to develop the results for my proposed solution in the terms
of traceability, transparency, trust and scalability. The terms will be discussed below in the
terms of the supply chain and the food industry.
Data Security
Data security means protecting the digital data which is stored in a storage device from a
cyberattack or a data breach. More organizations are not willing to move from traditional ERP
systems to the cloud ERP systems is due to the data risks only. There are many benefits to
moving from traditional ERP systems to cloud ERP system. Some major benefits will be the
user doesn’t have to invest on the hardware to access the ERP software. However, there are
situations where security might still be a valid concern for the user.
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Data ownership
Data ownership is primarily a data management process that details the legal ownership of
organization data. An organization or owner of specific data can create, edit, modify, share and
restrict access to data. Ownership of data also determines the ability of the data owner to assign,
transfer or transfer all of these privileges to a third party. This concept is typically implemented
in medium and large companies with huge repositories of centralized or distributed data
elements. The owner of the data claims ownership and copyrights of such data to ensure their
control and the ability to sue if their right to property is illegal and violated by an internal or
external person.
Blockchain Smart contracts

Blockchain Smart contracts are units of code that are stored in a chain of blocks and executed
automatically when predetermined conditions are met. At the most basic level, programs work
because they are designed to be performed by the people who developed them. The benefits of
intelligent agreements are clearer in business relationships where they are usually used to
introduce a type of agreement so that all participants can be convinced of the outcome without
the involvement of an intermediary.
Traceability
The term itself defined as tracing of the goods for the from the supplier to the end user or the
customer. In this process the supplier delivers the goods to vendor and the vendor manufactures
the product and ship it to the local retailers and the local retailers to the customer. During this
total supply chain process there are too many processes involved from the supplier to the
customer. Previously this supply chain process is very complex to trace back a specific product
from the supplier to the customer by applying the blockchain technology in the supply chain it
will provide a traceability feature as a standard feature which is built in technology from this
technology, we can track it back to vendor and the supplier.
Transparency
It’s crucial for manufacturing companies to operate with optimum transparency. Customers,
industry regulators and insurers may want to know every minute detail involved in the project.
Global Shop Solutions offers manufacturers the most up-to-date information on the production
process. ERP’s traceability feature provides stakeholders real-time information on storage,
treatment and testing materials. ERP software provides hardware delivery, product expiration
and inventory turnover details.
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Data Trust
Everyone knows the importance of having accurate information in the business. Data quality
problems are more than simply creating clear and hidden costs. The Gartner study indicates
that the low-quality of data is costing about approximately $ 14.2 million per year. To get the
trust in the data, data should have the traceability and transparency.
4.1.1. CBA
Cost–benefit analysis, sometimes called benefit-costs analysis, is a systematic approach to
estimate the strengths and weaknesses of alternatives; it is used to determine options that
provide the best approach to achieve benefits while preserving savings. The CBA is also
defined as a systematic process for calculating and comparing the benefits and costs of a
decision, policy or project. A cost-benefit analysis is a process for the commercial analysis to
make decisions. The company or analyst adds the benefits of a situation or action and then
deducts the costs associated with this action. Some consultants or analysts also create the model
to assign a monetary value to intangible assets, such as: Benefits and costs associated with
living in a particular city, and most analysts also include opportunity costs in these equations.
Before building a new facility or project, conservative managers conduct a cost-benefit analysis
to assess all potential costs and revenues that a business can generate after completing the
project. The result of the analysis will determine whether the project is financially feasible or
whether the company should pursue another project.
The Cost-Benefit Analysis Process

The first step in this process is to create a complete list of all the costs and benefits associated
with the project or decision. Costs should include direct and indirect costs, intangible costs,
opportunity costs and potential risk costs. The benefits include all direct and indirect income
and intangible benefits, such as increased production due to improved safety and morale at
work, or increased income from the client's goodwill. The analyst must apply a common
monetary assessment unit for all the elements of the list, paying special attention not to
underestimate the cost or overestimate the benefit. A conservative approach, with a conscious
effort to avoid subjective trends in the calculation of estimates, is more appropriate to evaluate
the costs and benefits of a cost-benefit analysis. The final step is to quantitatively compare the
results of total costs and benefits to determine if the benefits outweigh the costs. If this is the
case, the rational decision is to move the project forward. Otherwise, the company needs to
review the project to see if it can make changes to increase benefits or reduce costs for the
project to be profitable. Otherwise, the company might be able to abandon the project.
49
Limitation of Cost-Benefit Analysis
For projects with low to medium, short and medium lead times, a thorough cost-benefit analysis
can be sufficient to make a thorough and rational decision. For large projects with a long-term
horizon, the cost-benefit analysis generally does not take into account major financial concerns
such as inflation, interest rates, variable cash flows and the current value of the currency.
Alternative methods of analyzing the investment budget, including present value or internal
rate of return, are more appropriate for these situations.
Cloud ERP vs. On-Premise ERP

For many years, ERP systems have promised manufacturers simplify their processes, increase
efficiency, increase productivity and reduce costs. To survive in today's dynamic global
markets, manufacturing companies need an ERP solution that delivers the promised benefits.
ERP systems in the facilities have existed for decades and have provided some benefits to
organizations, but with upgrades, maintenance and personalization increasing. ERP Cloud was
added suddenly, which gives manufacturing companies a new opportunity to face current
business challenges.
Table 2
Comparing cloud ERP and on-premise ERP systems
Issue Cloud ERP On-Premise ERP
Cloud ERP usually has a

On-site ERP software costs a
monthly or annual subscription
unique and perpetual license fee.
price.
The disadvantages of this model
The benefits of this pricing
are:
Cost model include:
• Recurring fees for training,
• Lower initial investment.
support and updates.
The vendor manages backups,
• • High operating costs due to
resulting in less downtime and
obsolete software and hardware.
server downtime.
The Cloud ERP software is The ERP software installed in the

hosted on the manufacturer's premises is installed locally on
Deployment
servers and is accessible through the computers and servers of a
a web browser. company.
50
Short execution times the The implementation takes time
Implementation average time for the ERP and is expensive. The
Time platform in the cloud is 4 to 8 implementation periods for local
months. systems can be up to 36 months.
The software provider deals with

Traditional ERP systems in
data security. However, business
facilities are considered very
computing groups must work
secure as hardware and software
with the provider to ensure the
are installed locally. Access can
highest levels of security. For a
Security be more closely monitored and
secure and hosted cloud
monitored. However, the need to
platform such as Salesforce,
constantly update these systems
ERP cloud software takes
with updates and customizations
advantage of the many security
can present security risks.
features of the platform.
ERP systems installations have

Cloud ERP systems are more
always been more adaptable than
stable thanks to constant updates
cloud-based ERP systems.
from the manufacturer.
However, these adjustments are
Therefore, a less expensive and
associated with a high price.
less expensive personalization is
Customization Onsite customization often
necessary.
requires costly hardware and
For example, products such as
software upgrades, lengthy
Salesforce CRM can be easily
setups that leverage all of the
integrated into the Rootstock
company's IT resources, and
Cloud for Manufacturing ERP.
costly system outages.
Obsolete on-premises ERP

The cloud ERP provider
software: old software can be so
Maintenance provides automatic and
old that the original provider no
transparent updates.
longer works.
51
“Manufacturers looking to succeed in today’s markets should consider these “cloud-point
solutions” as the logical next step in the evolution of ERP systems. With a solution like
Rootstock ERP for Manufacturing in the Salesforce platform, companies can achieve the
promise of optimized processes, greater efficiency, higher productivity and lower costs”.
Challenges faced in the Cloud ERP systems
• Security risks
• Performance risks
• Customization limitations
• Data sensitivity and data ownership
These challenges are mitigated by using the blockchain technology in the Cloud ERP systems.
Table 3
Cost of the Cloud ERP with Blockchain*
ERP Types Costs per Year
Traditional ERP systems $268,467
SaaS Cloud ERP Systems $431,000
SaaS Cloud ERP Systems with Blockchain $ 600,000 (Expected)
Monthly costs for Cloud ERP in General $4000 Per Month
* Source: https://www.softwareadvice.com/resources/erp-software-pricing/
Cost Benefit Analysis

Cost of ERP Blockchain = Cost of Cloud ERP + Blockchain Technology Integration Costs
Cloud ERP Blockchain Benefits = Blockchain Benefits - Cloud ERP Benefits
Cloud ERP Blockchain Price Per User = Cloud ERP Price + Blockchain Technology Price
Table 4
Estimated integration durations and costs*
Target system Duration Cost
Cloud ERP System 6 months to 2 $431,000

years
Blockchain Development 2-3 months $200,000 (Max)
Cloud ERP Blockchain 2-3 months $600,000
* Source: https://azati.com/how-much-does-it-cost-to-blockchain/
52
ROI of the ERP Blockchain
Gain from Investment - Cost of Investment

ROI =
Cost of Investment
Payback Period of ERP Blockchain
Initial investment
Payback Period =
Cash flow per year
Table 5
For Single User
Index Value
Annual return on investment (ROI) 76% (Single User)
Payback period 4.1 years (single User)
Table 6
For Multiple Users (100Users)
Index Value
Annual return on investment (ROI) 100% (100 Users)
Payback period 6 Months (100 Users)
4.1.2. AHP
The process of analytical hierarchy (AHP) is a structured technique to organize and analyze
complex decisions. Based on mathematics and psychology (Thomas L. Saaty, 1970). When we
use judgment to estimate the dominant position in comparisons, and especially when the
comparison criterion is an intangible value, instead of using two numbers wi and wj on a scale
(if we do not interpret the meaning of their) we assign a unique number taken from the basic
scale of the absolute numbers 1-9 (see Table 5) to represent the relation (wi / wj) / 1. This is
the following complete approximation of the relation wi / wj. The derived scale shows what wi
and wj are. This is an essential fact with respect to the relative measurement approach and the
need for a fundamental scale. This scale is derived from fundamental principles that involve
the generalization of continuous comparisons of cases, obtaining a functional equation as a
necessary condition and then solving this equation in real and complex domains.
53
The processing technique of the analytical hierarchy is used in the decision-making process to
determine which solution is the best for the future of the business. The existing solution is
compared with the proposed solution based on the factors table collected during the evaluation
phase.
Priorities set by the business and other representatives are converted to a quantitative value as
it is required to perform AHP calculations.
Table 7
Key factors Priorities
ID FACTOR PRIORITY
1 Data Security 8
2 Data Ownership 9
3 Traceability 9
4 Transparency 8
5 Data Trust 9
6 Encryption 7
7 Solution Scalability 5
8 Future Improvements 7
9 Solution flexibility 5
10 User Friendliness 3
Table 8
The fundamental Scale of Pairwise Comparisons
Intensity of importance Definition
1 Equal importance
3 Moderate importance
5 Strong importance
7 Very strong importance
9 Extreme importance
Intensities of 2,4,6,8 can be used to express intermediate values.
The decomposition into a hierarchy of criteria and alternatives is presented on the Figure 37
and 38.
54
Figure 37. Decomposition of criteria and alternatives
The result of pairwise comparison is the relative ranking of chosen criteria, the most important
criterion is particular result is Covered area.
Following figure contains results of criterions pairwise comparison.
Figure 38. Criteria with normalized score
55
The table shows a matrix of pairwise compilation for each system based on the criteria, in
particular research for systems are compared with four criteria.
Table 9
Alternatives with respect to Criteria
Data Security Existing solution Proposed solution

Existing solution 1.00 3.00
Proposed solution 0.33 1.00
Data ownership Existing solution Proposed solution
Transaction Traceability Existing solution Proposed solution
Transparency Existing solution Proposed solution
Data Trust Existing solution Proposed solution
Encryption Existing solution Proposed solution
Solution scalability Existing solution Proposed solution
Future Improvements Existing solution Proposed solution
Solution Flexibility Existing solution Proposed solution
User Friendliness Existing solution Proposed solution
56
The table shows a result of ranking calculation for each solution(alternative) and criteria.
Table 10
Alternatives and criteria with respect the Goal
Existing solution Proposed solution

Data Security 0.0558 0.1234
Data ownership 0.0186 0.1673
Transaction Traceability 0.0163 0.1139
Transparency 0.0270 0.0270
Data Trust 0.0813 0.0116
Encryption 0.0129 0.0386
Solution Scalability 0.0123 0.1419
Future Improvements 0.0137 0.0186
Solution Flexibility 0.0114 0.0057
User Friendliness 0.0857 0.0171
Goal 0.3349 0.6651
The result of AHP technique shows that proposed is the best options in respect to selected
criterions and performed judgment and almost twice better in score than existing solution.
4.3. Advantages, disadvantages and limitations of the proposed solution
To showcase the benefits of the proposed solution SWOT analysis is used, as the name itself
says it gives a brief overview of the proposed solution,
o Strengths,
o Weakness,
o Opportunities and
o Threats.
The proposed solution is Cloud ERP with Blockchain Technology which is supported by the
distributed ledger technology. The strengths will be considered as Data Trust, Traceability,
Data Security, Transparency. Weakness will be the Implementation Costs and Processing
Time. The opportunities of the current research are ability for the development of Smart
Contracts between the parties involved in the blockchain. The threats will be considered as less
however to point out the slightest possible threats, the blockchain network can be dysfunctional
if the network is affected or damaged more than 55% by any third-party hackers.
57
CONCLUSIONS
The Usage of Cloud ERP systems are increased over time, even though the cloud service
providers CSP providing the best class services and products. The user base still has concern
regarding the security risks and data Ownership of their enterprise sensitive data as stated in
(Mohamed A. Abd Elmonem, 2017) literature review. These challenges faced by the many
users from the research papers in order to mitigate these challenges a research need to be done
in this particular area. From my research I am proposing the application of Blockchain
Technology in the ERP infrastructure will be best suitable solution for the current time of
research.
In order to evaluate my research, I use both the CBA and AHP analysis to show the
effectiveness and advantages of this research. In CBA the implementation costs are taken as a
maximum amount of money to implement a blockchain network. The ROI is calculated based
on average monthly expenses of a cloud ERP system. The percentage of ROI for Single user
and Multiple user are calculated, and payback period of investments also evaluated for single
and multiple users are also calculated. The results obtained from the research showed it is a
profitable solution for the Cloud ERP systems.
The proposed solution of blockchain application in Cloud ERP systems is also evaluated using
the AHP. The priorities of the business are also considered and the pair wise comparison of
both Cloud ERP and ERP with Blockchain using the AHP is evaluated. The research results
show the application of blockchain in cloud ERP systems will improve the quality of the
services provide by the cloud service providers.
Based on the results available from the research the application of Blockchain Technology in
Cloud ERP systems will provide good results and provide good value for any enterprise. It is
a one of the better choices to mitigate the challenges faced by the Cloud ERP systems.
The use of this blockchain technology is allowed not only in the supply chain and in the food
industry. This can be used in various modules of the ERP like the Warehouse Management,
Finance and Accounting etc. Addition to that the cloud ERP can also use the advancements of
the artificial Intelligence in its domains.
58
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61
ANNEX
62
TRANSPORTA UN SAKARU INSTITŪTS
DATORZINĀTŅU UN TELEKOMUNIKĀCIJU FAKULTĀTE
ATĻAUTS AIZSTĀVĒT
Datorsistēmu programmatūras
katedras vadītājs
Asoc. profesore, Dr. sc. ing.
Irina Pticina __________
201_. gada ____._________
DARBS
INŽENIERZINĀTŅU MAĢISTRS INFORMĀCIJAS SISTĒMU VADĪBĀ
AKADĒMISKĀ GRĀDA IEGŪŠANAI
Pētījums par BlockChain tehnoloģijas pielietojumu Cloud ERP sistēmām
Studējošais: Babu Rajendra Prasad Kuvvarapu ______________ 201_. gada

___._________
(st. k. 59551)
Darba vadītājs: Asoc. profesors, Dr. sc. ing.

Mihails Savrasovs ______________ 201_. gada ___._________
Rīga - 2019.
SATURS
IEVADS .......................................................................................................................... 65
1. JOMĀS IZPĒTE ..................................................................................................... 67
1.1. Cloud ERP blockchain ............................................................................................... 68
1.2. Blockchain īstenošana piegādes ķēdē un pārtikas rūpniecībā .................................... 70
2. ERP UN ERP BLOCKCHAIN REZULTĀTU SALĪDZINĀŠANA ........................... 72
2.1. CBA ..................................................................................................................... 72
2.2. AHP ..................................................................................................................... 74
2.3. Ierosinātā risinājuma priekšrocības, trūkumi un ierobežojumi ............................. 78
SECINĀJUMUS ............................................................................................................. 79
64
IEVADS
ERP sistēma ir plaša informācijas sistēma, kas pārvalda visu uzņēmuma informāciju par
produktiem, darbiniekiem, ražošanam, klientiem, piegādātājiem, grāmatvedību utt., Ko
izmanto katrs uzņēmums un dažādas uzņēmuma daļas. Pārdošanas nodaļa var pārbaudīt savu
produktu cenas un to krājumu stāvokli, var ievadīt pārdošanas pasūtījumus no klientiem, veikt
piegādes klientiem, izsniegt rēķinus un saņemt maksājumus. Ražošanas nodaļa pārbauda
produktu atlikumus, pasūtījumus un pārdoto produktu rēķinu. Mārketinga nodaļa var veikt
nākamā gada pārdošanas prognozes. Grāmatvedības nodaļa izseko uzņēmumam algas un
ražošanas izmaksas un izdevumus un rada rēķinus. Cilvēkresursu departaments uzrauga
uzņēmumā strādājošos darbiniekus un aizpilda jaunos darbinieka datus sistēmā, kā arī pārvalda
darbinieka lapas, izmantojot ERP sistēmas.
ERP sistēma pārvalda visu notiekošo procesu uzņēmumā, reģistrēs un uzraudzīs visu procesā
notiekošo procesu. Lai gūtu šīs iezīmes visas uzņēmuma pamatdarbības procesos,
uzņēmumiem ir jāiegulda tradicionālo sistēmu migrācijā uz E.R.P sistēmām. Šāda veida datu
migrācija maziem un vidējiem uzņēmumiem kļūst dārgāka infrastruktūras un uzturēšanas dēļ.
Lai ERP sistēmas būtu lietotājdraudzīgas, ERP pārdevēji, piemēram, SAP, Oracle, Microsoft,
Infor, Epicor arī nodrošina šīs ERP sistēmas kā On-Premise ERP sistēmas, kā arī mākoņ
datošanas sistēmas, kas darbojas uz mākoņa kā Programmatūra kā pakalpojuma (SaaS)
modelis.
Pētījuma nozīmīgums:
Šīs ERP sistēmas ir dārgas ieviest uz vietas; Vietējās ERP sistēmas ieviešana ir puse no ERP
sistēmas izmaksām. Lai samazinātu izmaksas, ERP piegādātāji sniedz šīs pašas funkcijas
mākonī, izmantojot programmatūru kā pakalpojumu (SaaS). Tomēr klienti nevēlas pāriet no
tradicionālajām uz vietas izvietotajām ERP sistēmām uz mākonis balstītām E.R.P sistēmām,
galvenokārt drošības apsvērumu, datu īpašumtiesību un dažu veiktspējas problēmu dēļ. Šajā
pētījumā tiek apspriests šīs problēmas salīdzinošs pārskats, un daži ieteikumi tiek sniegti,
izmantojot Blockchain tehnoloģiju un piedāvājot konceptuālu risinājumu dizainu, lai pārvarētu
šīs problēmas, ar kurām saskaras Cloud ERP sistēmas. Kā jau minēts, katrs uzņēmums ir
nobažījies par saviem finanšu datiem migrācijas procesa laikā, tāpēc uzņēmumi nevēlas
saglabāt savus personas datus mākonī. Faktiski var tikt nozagti vai manipulēti uzņēmuma dati,
kas tiek glabāti mākonī vai trešās puses uzglabāšanā. Jebkurš uzņēmums, kuram ir neliels datu
apjoms, var tikt ietekmēts mazāk, salīdzinot ar lielu uzņēmuma vai organizācijas grupu.
65
Pētījuma mērķis:
Izpētīt un sniegt ieteikumus Cloud E.R.P sistēmām, izmantojot Blockchain tehnoloģiju.
Uzmanības lokā būs faktori Datu drošība, datu īpašumtiesības, izsekojamība, uzticamība un
pārredzamība.
Pētījuma temats:
Cloud E.R.P sistēmas, kas izmanto programmatūru kā pakalpojumu (SaaS) modeli.
Pētījuma objekts:
Problēmas, ar kurām saskaras mākonis E.R.P sistēmas, proti, drošības jautājumi un datu
īpašumtiesības.
Darba galvenie soļi:

Šis pētījums ir sadalīts sešās galvenajās sadaļās, katra sadaļa tiek nosaukta par nodaļām, un
katrā nodaļā ir koncentrēta konkrētā tēma. Pirmajā nodaļā ir aplūkota bloku ķēdes tehnoloģijas
apskats, un divās un trīs nodaļās iegūst zināšanas par domēnu priekšrocībām un trūkumiem.
Ceturtajā nodaļā tiek apspriests piedāvātā risinājuma risinājuma projekts, kā arī piedāvātā
risinājuma priekšrocības un ierobežojumi, un piektajā nodaļā tiek piedāvāts piedāvātā
risinājuma salīdzinājums ar cita veida analīzi. piedāvātais risinājums. Pēdējā sestajā nodaļā
secinājums tiek izdarīts, pamatojoties uz rezultātiem, kas iegūti no piektās nodaļas.
Šajā pētījumā veiktie pasākumi:

o Izpētīt un saprast domēnus Cloud ERP un Blockchain Technology
o Norādot šo domēnu priekšrocības un uzdevumus
o Analizējot mākoņa E.R.P sistēmu problēmas, balstoties uz literatūras pārskatu
o Piedāvāt risinājuma dizainu, izmantojot Blockchain tehnoloģiju
o Salīdzinot ierosināto risinājumu ar Blockchain tehnoloģiju un bez tās Cloud ERP sistēmās
66
1. JOMĀS IZPĒTE
Visi lielākie ERP piegādātāji ļoti smagi strādā, lai integrētu Blockchain tehnoloģiju savās ERP
sistēmās, jo tehnoloģijas nodrošina. To var izmantot, lai izsekotu piegādes ķēdi un izsekotu to
piegādes ķēdes izcelsmi, izmantojot sadalīto virsgrāmatu. Ir svarīgi integrēt bloka ķēdes
tehnoloģiju ar ERP sistēmām, ne tikai uzglabājot jaunus datus izplatītajā virsgrāmatā, bet arī
glabāt iepriekšējos datus un glabāt virsgrāmatā. Lielākā daļa kompānijas sensitīvu datu tiek
glabāti tikai tvertnēs, tas veido 80% no pasaules datiem.
Blockchain tehnoloģiju jautājumi

Blockchain ir izplatīta datubāze, kurā katrs darījums tiek glabāts blokā un katrs bloks ir saistīts
ar iepriekšējo bloku. Šie bloki ir nesagraujoši, kas nozīmē, ka katrs bloks ir droši savienots ar
iepriekšējo bloku, izmantojot kriptogrāfijas metodes. Tas ļauj atvērt atvērtu bloku ķēdi vai
privātu bloku ķēdi, ko var kontrolēt lietotāju kopa, lai piedalītos šajā darījumā. Parasti
blockchain tīkli satur elementus, piemēram, dalībniekus, dalībnieku identitātes, darījumus un
grāmatojumus un darījumu ierakstus. Tā kā to nevar kontrolēt viens lietotājs, nav neviena
neveiksmes punkta, jo to pārvalda pati sistēma. Blockchain arī novērš nepieciešamību pēc
drošības ekspertiem uzņēmumā. Blockchain tīklā ir daudz izmantojumu. Public blockchains
ļauj jebkuram lietotājam piedalīties darījumos tik ilgi, kamēr verifikācijas process, savukārt
privāti bloki tikai izvēlas dalībniekus izmantot tīklu.
ERP jautājumi
Nesenais pētījums par ERP sistēmām liecina, ka laika gaitā tiek palielināta datu pārcelšana no
tradicionālās ERP uz mākonis ERP. ERP sistēmas parasti nodrošina daudzus integrētus
uzņēmuma pamat procesa procesus, ERP nodarbojas ar dažādiem moduļiem, tomēr ERP
sistēmā ir vairāki moduļi, kuros ir daži izsekojamības jautājumi. Tā ir ļoti karsta zona, kurā
katrs uzņēmums plāno izstrādāt risinājumus savām nozares vajadzībām, izmantojot Blockchain
tehnoloģiju. Kā minēts rakstā Mearian, L. (2018), IBM parādīja, ka Hyperledger balstīta bloka
ķēde ir integrēta ar mazumtirdzniecības uzņēmumu, lai izsekotu svaigu pārtikas produktu,
piemēram, augļu, sūtījumus. Šis Blockchain projekts ERP sistēmā koncentrējas uz pārtikas
produktu, piemēram, augļu, sūtījumu izsekošanas attīstību, un tas palīdzēs izsekot augļa un tā
nozares izcelsmei. Tas palīdzēs izsekot sūtījumiem, izmantojot bloka ķēdi, visi lielie uzņēmumi
ir ieinteresēti veidot bloka ķēdes risinājumus ERP sistēmās, kas var dot lielu vērtību gan
uzņēmumam.
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1.1. Cloud ERP blockchain
Cloud ERP risinājumi tiek nodrošināti, izmantojot programmatūru kā pakalpojumu modeli

(SaaS). Kā minēts iepriekš, bloku ķēdes tehnoloģijas nozīme. Tas ir spējīgs izveidot
savienojumu ar dažādām biznesa lietojumprogrammām, piemēram, uzņēmuma resursu
plānošanu (ERP), klientu attiecību pārvaldību (CRM), noliktavu vadības sistēmu (WMS) utt.
Savienojot atšķirīgas biznesa lietojumprogrammas ar klientu, var sasniegt biznesa panākumus,
izmantojot Blockchain tehnoloģiju.
Integrējot šīs sistēmas ar bloka ķēdi, ir daudz priekšrocību, Cloud ERP ar blockchain stiprinās
visu tās procesu un uzlabos problēmas, kas iepriekš aplūkotas literatūras pārskatā, piemēram,
datu drošība, darījumu izsekojamība, pārredzamība, datu īpašumtiesības, šifrēšana un
Uzticēšanās.
Block
chain
Attēls 1. Ierosinātā Cloud ERP ar Blockchain
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Attēls 2. Blockchain arhitektūra (Muneeb, 2016)
Iepriekš redzamie divi attēli 1 un 2 ir mākoņ datošanas sistēma un bloku ķēdes arhitektūra.
Piedāvātajā risinājumu sistēmā mēs centralizēto datubāzi aizstāsim ar Blockchain “Distributed
Ledger” tehnoloģiju. Risinājuma konceptuālais dizains satur mākoņa ERP sistēmas diagrammu
ar bloka ķēdes integrāciju mākonī. Šī risinājuma dizains vēl nav sarežģīts, bet darbs tiks
paveikts labākā veidā.
Attēls 3. Cloud ERP Vs Cloud ERP ar Blockchain
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1.2. Blockchain īstenošana piegādes ķēdē un pārtikas rūpniecībā
Piegādes ķēde un ražošana ir viens no labākajiem moduļiem, lai demonstrētu Cloud ERP
Blockchain. Parasti Piegādes ķēdes un Pārtikas rūpniecība izmanto datubāzes ar uz vietas
esošām skaitļošanas iespējām. Galvenais šo ERP sistēmu pārdevējs ir Oracle, IBM un
Microsoft. Mākonī darbojas jaunā mākoņdatošanas platformu paaudze, kas dod priekšroku
datu apstrādei un uzglabāšanai attālā vietā, lai samazinātu izmaksas. Mūsdienu pasaules
piegādes ķēdē ir būtiska loma ikviena cilvēka dzīvē. Bet produktu detaļas, kad mēs pērkam
produktus, kaut kas līdzīgs šim, joprojām nav. Piemēram,
o Lauksaimniecības produkti: kad produkts tiek izņemts no lauksaimniecības un kāda veida
pesticīdi izmantoja, kāda veida pasākumus viņi veica pirms nosūtīšanas.
o Gaļas produkti: kā un kur tika audzēti dzīvnieki? Kā tie ir higiēniski un veselīgi?
o Automobiļi: kādas ir tās sastāvdaļas un vai tās ir izsekojamas līdz izejvielām?
Attēls 4. Piegādes ķēdes procesa pārskats (Asiimwe, 2017)
Galvenā problēma, ar ko saskaras piegādes ķēdē, ir „Pārredzamība”. kāpēc dažādiem

uzņēmumiem ir svarīgi pārbaudīt un apstiprināt produktu kvalitāti un autentiskumu lietotājam.
Ar šo problēmu var rasties tradicionāli uz vietas esošie datori un dati. Nav pareizi izpētīt un
atrast neētisku darbību, kas saistīta ar produkta piegādes ķēdi. Pamatojoties uz šo pieredzi, ir
ļoti svarīgi, lai piegādes ķēdē būtu nepieciešamas jaunākās tehnoloģijas. Lai risinātu šo
problēmu, Blockchain tehnoloģija ir viens no piemērotākajiem risinājumiem piegādes ķēdei,
lai nodrošinātu “produktu pārredzamību”. Lai demonstrētu bloku, var palīdzēt izsekot visai
produkta piegādes ķēdei. Pašreizējā brīdī nav pareizi nodrošināt šāda veida pārredzamību,
piemērojot bloka ķēdes tehnoloģiju, ko mēs varam sasniegt.
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Attēls 5. Piegādes ķēde ar Blockchain vispārējo pārskatu
Bloka ķēdes darījuma piegādes ķēdē piemērs būs nodoto preču reģistrs starp divām pusēm, ko
var identificēt kā divas adreses Blockchain darījumā. Blockchain saglabās visu informāciju,
piemēram, atrašanās vietu, datumu, cenu un produktu daudzumu izplatītajā virsgrāmatā. Bloka
bloku ķēdes atvērtība ļautu katram darījumam, tāpat kā produktiem, izsekot tās izcelsmei.
Decentralizēto virsgrāmatu nav iespējams manipulēt, jo katram Blockchain tīkla mezglam ir
virsgrāmatas kopija.
Kriptogrāfiskās publiskās un privātās atslēgas tiek izmantotas, lai aizsargātu virsgrāmatu, un

katrs bloks ir saistīts ar iepriekšējo bloku. Faktiski tas tiek uzskatīts par visvairāk nesaderīgu
virsgrāmatu. Tas ir revolucionārs daudzos veidos,
o Pasaules pirmā izplatītā vienprātības sistēma
o pasaulē lielākais izplatītais peer-to-peer tīkls
o Pasaules pirmais un lielākais tikai rakstāms publiskais virsgrāmata
Nākotnē tas tiks izmantots katrā pieteikumā, kas laika gaitā var kļūt par galveno funkciju
daudziem uzņēmumiem un iestādēm.
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2. ERP UN ERP BLOCKCHAIN REZULTĀTU SALĪDZINĀŠANA
Lai novērtētu rezultātus starp šīm divām tehnoloģijām, mēs izmantosim dažādas pieejas,
pamatojoties uz izmaksu un ieguvumu analīzi, analītisko hierarhisko procesu un saliktiem
rādītājiem. No šīm diagrammām tiek iegūti atsevišķi un tos var salīdzināt ar rezultātiem.
Pamatojoties uz apspriestajiem rezultātiem, mēs sniegsim atsauksmes par Blockchain
integrāciju mākonis ERP sistēmās. Papildus šim pētījumam padziļināti tiek veikti pētījumi par
dažādiem ERP moduļiem, un mana pētniecības galvenā joma būs piegādes ķēdes vadības
modulis. Šo tehnoloģiju var izmantot dažādos ERP moduļos, kā arī finanšu un grāmatvedības
moduļu un noliktavu vadības moduļos. Dažos sistēmas iekšējos procesus var salīdzināt ar
papīru un grūti pierādīt. Bet šeit mēs varam sniegt izpētes ieskatu, sniedzot dažas ilustrācijas,
diagrammas un grafikus vai kas ir piemērotāks, lai šo sarežģīto ideju prezentētu papīra formātā.
2.1. CBA
Izmaksu un ieguvumu analīze, ko dažkārt sauc par izmaksu un izmaksu analīzi, ir sistemātiska
pieeja, lai novērtētu alternatīvu stiprās un vājās puses; to izmanto, lai noteiktu iespējas, kas
nodrošina vislabāko pieeju, lai panāktu ieguvumus, vienlaikus saglabājot ietaupījumus. CBA
ir arī definēts kā sistemātisks process, lai aprēķinātu un salīdzinātu lēmuma, politikas vai
projekta priekšrocības un izmaksas. Izmaksu un ieguvumu analīze ir process komerciālai
analīzei, lai pieņemtu lēmumus. Uzņēmums vai analītiķis pievieno situācijas vai darbības
priekšrocības un pēc tam atskaita ar šo darbību saistītās izmaksas. Daži konsultanti vai analītiķi
arī izveido modeli, lai piešķirtu monetāro vērtību nemateriālajiem aktīviem, piemēram, pabalsti
un izmaksas, kas saistītas ar dzīvošanu konkrētā pilsētā, un lielākā daļa analītiķu arī ietver
iespēju izmaksas šajos vienādojumos. Pirms jaunas iekārtas vai projekta izveides konservatīvie
vadītāji veic izmaksu un ieguvumu analīzi, lai novērtētu visas iespējamās izmaksas un
ieņēmumus, ko uzņēmums var radīt pēc projekta pabeigšanas. Analīzes rezultāts noteiks, vai
projekts ir finansiāli realizējams vai vai uzņēmumam ir jāīsteno cits projekts.
Cloud ERP vs On-Premise ERP

Daudzus gadus ERP sistēmas ir apsolījušas ražotājiem vienkāršot savus procesus, paaugstināt
efektivitāti, palielināt produktivitāti un samazināt izmaksas. Lai izdzīvotu mūsdienu
dinamiskajos pasaules tirgos, ražošanas uzņēmumiem ir nepieciešams ERP risinājums, kas
nodrošina solītos ieguvumus. ERP sistēmas iekārtās pastāv jau vairākus gadu desmitus, un tās
ir devušas labumu organizācijām, bet palielinājušās, uzturētas un personalizētas.
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ERP Cloud tika pievienots pēkšņi, kas dod ražošanas uzņēmumiem jaunu iespēju risināt
pašreizējās uzņēmējdarbības problēmas. “Ražotājiem, kas vēlas gūt panākumus šodienas
tirgos, šie„ mākoņdatošanas risinājumi ”būtu jāapsver kā loģisks nākamais solis ERP sistēmu
attīstībā. Ar risinājumu, piemēram, Rootstock ERP ražošanai Salesforce platformā, uzņēmumi
var sasniegt optimālu procesu, lielāku efektivitāti, lielāku produktivitāti un zemākas izmaksas”.
Problēmas, ar kurām saskaras mākonis ERP sistēmas

• Drošības riski
• Darbības riski
• Pielāgošanas ierobežojumi
• Datu jutīgums un datu īpašumtiesības
Šīs problēmas mazina, izmantojot blockchain tehnoloģiju Cloud ERP sistēmās.

Tabula 1
Cloud ERP izmaksas ar Blockchain *
ERP veidi Izmaksas gadā
Tradicionālās ERP sistēmas $ 268,467
SaaS Cloud ERP sistēmas $ 431,000
SaaS Cloud ERP sistēmas ar Blockchain 600 000 ASV dolāru (paredzams)
Mēneša izmaksas pakalpojumam Cloud $ 4000 mēnesī
ERP vispār
* Avots: https://www.softwareadvice.com/resources/erp-software-pricing/
Tabula 2
Paredzamie integrācijas ilgumi un izmaksas *
Mērķa sistēma Ilgums Izmaksas
Cloud ERP sistēma 6 mēneši līdz 2 $ 431,000

gadiem
Blockchain attīstība 2-3 mēneši $200 000 ASV
dolāru (maks.)
Cloud ERP Blockchain 2-3 mēneši $600,000
* Avots: https://azati.com/how-much-does-it-cost-to-blockchain/
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ROI of the ERP Blockchain
Gain from Investment - Cost of Investment

ROI =
Cost of Investment
Payback Period of ERP Blockchain
Initial investment
Payback Period =
Cash flow per year
Tabula 3
Vairākiem lietotājiem (100 lietotājiem)
Indekss Vērtība
Gada atdeve no ieguldījumiem (ROI) 100% (100 lietotāji)
Atmaksāšanas periods 6 mēneši (100 lietotāji)
2.2. AHP
Analītiskās hierarchy process (AHP) ir strukturēta metode, lai organizētu un analizētu

sarežģītus lēmumus. Pamatojoties uz matemātiku un psiholoģiju (Thomas L. Saaty, 1970). Kad
mēs izmantojam spriedumu, lai novērtētu dominējošo stāvokli salīdzinājumos, un jo īpaši, ja
salīdzināšanas kritērijs ir nemateriāla vērtība, nevis izmantojot divus skaitļus wi un wj mērogā
(ja mēs to neizprotam), piešķiram unikālu numuru ņemti no absolūtā skaitļa 1-9 pamata skalas
(sk. 5. tabulu), lai attēlotu attiecību (wi / wj) / 1. Tas ir sekojošais pilnīgas tuvināšanas
tuvinājums wi / wj. Iegūtā skala parāda, kas ir wi un wj. Tas ir būtisks fakts attiecībā uz relatīvo
mērījumu pieeju un nepieciešamību pēc pamata mēroga. Šī skala ir iegūta no pamatprincipiem,
kas ietver gadījumu nepārtrauktu salīdzinājumu vispārināšanu, funkcionālā vienādojuma
iegūšanu kā nepieciešamo nosacījumu un pēc tam risinot šo vienādojumu reālos un sarežģītos
domēnos.
Analītiskās hierarchy apstrādes metode tiek izmantota lēmumu pieņemšanas procesā, lai
noteiktu, kurš risinājums ir labākais uzņēmuma nākotnei. Esošo risinājumu salīdzina ar
ierosināto risinājumu, pamatojoties uz novērtēšanas fāzē apkopoto faktoru tabulu.
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Tabula 4
Galvenie faktori Prioritātes
identificēt FAKTORS PRIORITĀTE
1 Datu drošība 8
2 Datu īpašumtiesības 9
3 Izsekojamība 9
4 Pārredzamība 8
5 Data Trust 9
6 Šifrēšana 7
7 Risinājumu 5
mērogojamība
8 Nākotnes uzlabojumi 7
9 Risinājumu elastība 5
10 Lietotāju draudzīgums 3
Tabula 5
Pāro salīdzinājumu pamatmērķis
Definīcija
Svarīguma intensitāte
1 Vienlīdzīga nozīme
3 Mērena nozīme
5 Spēcīga nozīme
7 Ļoti liela nozīme
9 Ļoti svarīga
Vidējo vērtību izteikšanai var izmantot 2,4,6,8 intensitāti.
Kritēriju un alternatīvu hierarhijas sadalījums ir parādīts 6 un 7. attēlā.
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Attēls 6. Kritēriju un alternatīvu sadalīšana
Pāru salīdzinājuma rezultāts ir izvēlēto kritēriju relatīvais rangs, svarīgākais kritērijs ir konkrēts
rezultāts ir segtā teritorija.
Nākamajā attēlā ir apkopoti kritēriju salīdzināšanas rezultāti.
Attēls 7. Kritēriji ar normalizētu rezultātu
Tabulā redzama katras sistēmas pāru apkopošanas matrica, kuras pamatā ir kritēriji, jo īpaši
sistēmu pētījumi tiek salīdzināti ar četriem kritērijiem.
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Tabula 6
Alternatīvas attiecībā uz kritērijiem
Datu drošība Esošais risinājums

Ierosinātais risinājums
Esošais risinājums
1.00 3.00
0.33 1.00
Datu īpašumtiesības Esošais risinājums
1.00 0.11
9.00 1.00
Darījuma izsekojamība Esošais risinājums
1.00 0.14
7.00 1.00
Par redzamībā Esošais risinājums
1.00 1.00
1.00 1.00
Datu trast Esošais risinājums
1.00 7.00
0.14 1.00
Šifrēšana Esošais risinājums
1.00 0.33
3.00 1.00
Risinājumu mērogojamība Esošais risinājums
1.00 0.14
7.00 4.00
Nākotnes uzlabojumi Esošais risinājums
1.00 0.11
9.00 1.00
Risinājumu elastība Esošais risinājums
1.00 2.00
0.50 1.00
Lietotāju draudzīgums Esošais risinājums
1.00 5.00
0.20 1.00
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Tabulā parādīts katra risinājuma (alternatīvas) un kritēriju klasifikācijas aprēķinu rezultāts.
Tabula 7
Alternatīvas un kritēriji attiecībā uz mērķi
Esošais risinājums Ierosinātais risinājums
Datu drošība 0.0558 0.1234

Datu īpašumtiesības 0.0186 0.1673
Darījuma izsekojamība 0.0163 0.1139
Pār redzamība 0.0270 0.0270
Datu trast 0.0813 0.0116
Šifrēšana 0.0129 0.0386
Risinājumu mērogojamība 0.0123 0.1419
Nākotnes uzlabojumi 0.0137 0.0186
Risinājumu elastība 0.0114 0.0057
Lietotāju draudzīgums 0.0857 0.0171
Mērķis 0.3349 0.6651
AHP metodes rezultāts rāda, ka ierosinātie varianti ir vislabākie varianti attiecībā uz

izvēlētajiem kritērijiem un veikts spriedums un gandrīz divreiz labāk nekā esošais risinājums.
2.3. Ierosinātā risinājuma priekšrocības, trūkumi un ierobežojumi

Lai parādītu piedāvātā risinājuma priekšrocības, tiek izmantota SWOT analīze, jo pats
nosaukums norāda, ka sniedz īsu pārskatu par piedāvāto risinājumu,
o Stiprās puses,
o vājums,
o iespējas un
o draudi
Piedāvātais risinājums ir Cloud ERP ar Blockchain tehnoloģiju, ko atbalsta sadalītās

virsgrāmatas tehnoloģija. Stiprās puses tiks uzskatītas par datu uzticamību, izsekojamību, datu
drošību, pārredzamību. Vājums būs īstenošanas izmaksas un apstrādes laiks. Pašreizējā
pētījuma iespējas ir spēja attīstīt viedos līgumus starp bloka ķēdē iesaistītajām pusēm. Briesmas
tiks uzskatītas par mazākām, lai norādītu uz mazākajiem iespējamiem draudiem, bloku ķēdes
tīkls var būt disfunkcionāls, ja tīkls ir ietekmēts vai bojāts vairāk nekā 55% no trešās puses
hackeriem.
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SECINĀJUMUS
Laika gaitā tiek palielināta Cloud ERP sistēmu izmantošana, lai gan mākoņ pakalpojumu
sniedzēji CSP nodrošina vislabākās klases pakalpojumus un produktus. Lietotāju bāzei
joprojām ir bažas par drošības riskiem un datiem. Uzņēmuma jutīgo datu īpašumtiesības, kā
norādīts (Mohamed A. Abd Elmonem, 2017) literatūras pārskatā. Šīs problēmas, ar kurām
saskaras daudzi lietotāji no pētnieciskajiem darbiem, lai mazinātu šīs problēmas, ir jāveic šajā
konkrētajā jomā. No mana pētījuma es ierosinu Blockchain tehnoloģijas izmantošanu ERP
infrastruktūrā, kas būs labākais piemērots risinājums pašreizējam pētniecības laikam.
Lai novērtētu savu pētījumu, es izmantoju gan CBA, gan AHP analīzi, lai parādītu šī pētījuma
efektivitāti un priekšrocības. CBA ieviešanas izmaksas tiek uzskatītas par maksimālo naudas
summu, lai īstenotu bloku ķēdes tīklu. ROI aprēķina, pamatojoties uz mākoņa ERP sistēmas
mēneša vidējiem izdevumiem. Tiek aprēķināts ROI procentuālais daudzums vienam lietotājam
un vairākiem lietotājiem, un tiek aprēķināts arī investīciju atmaksāšanās periods, kas novērtēts
arī vienam un vairākiem lietotājiem. Pētījuma rezultāti parādīja, ka tas ir izdevīgs risinājums
Cloud ERP sistēmām.
Ierosinātais bloka ķēdes pielietojuma risinājums Cloud ERP sistēmās tiek novērtēts arī
izmantojot AHP. Tiek ņemtas vērā arī uzņēmējdarbības prioritātes un tiek izvērtēts gan Cloud
ERP, gan ERP salīdzinājums ar Blockchain, izmantojot AHP. Pētījuma rezultāti rāda, ka bloka
ķēdes izmantošana mākonis ERP sistēmas uzlabos mākoņa pakalpojumu sniedzēju sniegto
pakalpojumu kvalitāti.
Pamatojoties uz pētījumā pieejamajiem rezultātiem, Blockchain tehnoloģijas pielietošana
Cloud ERP sistēmās nodrošinās labus rezultātus un sniegs labu vērtību jebkuram uzņēmumam.
Tā ir viena no labākajām izvēles iespējām, lai mazinātu problēmas, ar kurām saskaras Cloud
ERP sistēmas.
Šīs bloka ķēdes tehnoloģijas izmantošana ir atļauta ne tikai piegādes ķēdē un pārtikas
rūpniecībā. To var izmantot dažādos ERP moduļos, piemēram, noliktavas pārvaldībā,
finansēšanā un grāmatvedībā utt. Papildus tam mākonis ERP var izmantot arī artificiāla
intelekta sasniegumus savā domēnā.
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RESEARCH ON APPLICATION OF BLOCKCHAIN IN CLOUD ERP SYSTEMS

Thesis · November 2018

Research on Application of Blockchain in Cloud ERP systems View project

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Research on application of Blockchain in Cloud ERP Systems

Student: Babu Rajendra Prasad Kuvvarapu ______________ 201_____

Supervisor: Associated professor, Dr. sc. ing.

_____________________________ Babu Rajendra Prasad Kuvvarapu

Maģistra darbs „Pētījums par BlockChain tehnoloģijas pielietojumu Cloud ERP

MĀKOŅPAKALPOJUMI; UZŅĒMUMU RESURSU PLĀNOŠANA; BLOCKCHAIN;

Магистерская работа „Исследование об использовании технологии BlockChain в

ОБЛАЧНЫЕ СЕРВИСЫ; ПЛАНИРОВАНИЕ РЕСУРСОВ ПРЕДПРИЯТИЯ;

Анализ последних тенденций на рынке информационных систем, показывает две

Master thesis „Research on application of Blockchain in Cloud ERP Systems”. Author of

CLOUD SERVICES; ENTERPRISE RESOURCE PLANNING; BLOCKCHAIN; DATA

AHP – Analytic Hierarchy Process

Relevance of the research:

Main steps of the work:

Steps followed in this research:

Blockchain technology issues

1.1. ERP Systems

Figure 1. A mainframe connected to "dumb" terminals (Kumar, 2016)

Figure 3. A sample sales summary report (Kumar, 2016)

Figure 4. Batch Mode processing overview (Kumar, 2016)

Figure 5. Real-time processing (Kumar, 2016)

Figure 8. Silos information system (Kumar, 2016)

Introduction to the internet

Figure 11. Centralized data storage process overview (Kumar, 2016)

Figure 13. A client interacting with a server (Kumar, 2016)

1.2. Types of ERP Systems

Figure 16. ERP system overview (Ali, 2016)

Figure 17. Cloud Service Models (Elmonem, 2016)

Benefits of cloud ERP

Challenges of Cloud ERP

2.2. Types of Blockchain

2.3. Structure of Blockchain

Permission less blockchain

2.4. Advantages and Disadvantages of Blockchain Technology

The other challenges of the blockchain are

3.1. Conceptual description of the Proposed Solution

Figure 20. ERP Architecture

Figure 22. ERP Modules

Figure 23. Cloud Computing Process

Figure 26. How Blockchain Works (Source: The Economist)

Figure 28. Blockchain Technical Representation with the Hash Generation

Figure 29. Proposed Cloud ERP With Blockchain

Figure 31. Cloud ERP Vs Cloud ERP with Blockchain

Figure 32. Supply chain Process Overview (Asiimwe, 2017)

Figure 33. Supply chain With Blockchain General Overview

3.4. Gap Analysis (Centralized Database vs Blockchain Distributed Databases)

Figure 35. Centralized Database Overview (Patil, 2014)

Figure 36. Centralized vs Distributed Ledgers overview

4.1. Development of evaluation methodology

4.2. Formulation and description of the criteria framework

Blockchain Smart contracts

The Cost-Benefit Analysis Process

Cloud ERP vs. On-Premise ERP

Issue Cloud ERP On-Premise ERP

Cloud ERP usually has a

The Cloud ERP software is The ERP software installed in the

The software provider deals with

ERP systems installations have

Student: Babu Rajendra Prasad Kuvvarapu __________ 201_