EY launches blockchain-based business contract management solution on Ethereum

Global professional services company Ernst & Young Global Ltd. today announced the launch of a blockchain-enabled solution that will help businesses execute complex business agreements and reduce costs while maintaining security.

Launched during the company’s annual EY Global Blockchain Summit, the EY OpsChain Contract Manager is based on blockchain distributed ledger blockchain technology. It allows multiple parties to synchronize data between different business partners and enforce key terms using smart contracts. Those terms include standardized pricing, volume discounts, rebates and strike prices.

The contract management solution is powered by Ethereum, the second-largest blockchain by market capitalization only to Bitcoin. It uses its decentralized technology to provide an auditable but secure environment for contract resolution. EY says it obtains privacy for businesses using zero-knowledge proofs, a cryptographic protocol that allows one party to prove knowledge about a piece of data without revealing the data itself.

“We’ve identified from past client work that contract automation can improve accuracy while cutting cycle times by more than 90%, and overall contract administration costs by nearly 40%,” said EY global blockchain leader Paul Brody. “With our zero-knowledge privacy technology, we have industrialized this capability, and we can now get these benefits at a fraction of the up-front cost.”

EY said that using Ethereum’s decentralized public blockchain helps avoid giving any strategic advantage to buyers or sellers and at the same time eliminates high costs for setting up and running a private network for tracking and auditing transactions. The smart contracts that execute and resolve agreed-upon rebates and pricing also maintain the value of business terms without partners needing to pour over documents during or after transactions. Zion Market Research predicted that the global smart contract market could grow to an estimated $1 billion by 2030 from around $1,750 million in 2022.

“Deploying on a public blockchain is not only cheaper but also much more scalable, helping enable many-to-many integrations on an open platform with no one company having an unfair advantage by controlling the network,” said Brody.

Businesses can implement EY OCM with their existing enterprise systems through a standardized application programming interface. It’s designed to interoperate with a wide range of external systems, including customer relationship management systems and internet of things devices.

The solution is designed to support most business contract types including volume purchase agreements, volume discounts, rebates and price models that track market data feeds.

It also includes real-time monitoring that automatically validates contract terms for policy adherence. Contract parties receive instant alerts on discrepancies so that transactions that aren’t compliant with contract terms don’t pass through.

Photo: Pixabay

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