IBM has developed a blockchain contractor management solution which it plans to roll out later this year, reported online publication CIO. Called IBM Contingent Labor, the platform will automatically track timesheets, purchase orders, and other data related to contractual work.
IBM and blockchain consulting firm IT People initiated the project to automate contractor processes. An explainer video is dated 2017, although the company said the project started in 2018.
The legacy process involves manual effort to validate vendor invoices, verify timesheets, and onboard new contractors, among other things. The issue is the process involves an internal procurement department as well as an external supplier who secures the contractors. Hence there’s a lot of reconciliation that can be avoided.
By leveraging blockchain, IBM’s solution will provide a single source of truth for the timesheet, increasing transparency and auditability. Meanwhile, smart contracts will ensure payments are made on time without discrepancies. IBM said legacy processes cost 2% of annual contractor spend to deal with these mismatches.
“One of the biggest pain points of all suppliers of contractors is invoice reconciliation,” Burton Buffaloe, IBM Leader of Global Logistics and Blockchain told CIO.
While IBM Contingent Labor started out as a management solution, the firm is now exploring integrating a payment solution. Underpinned by Hyperledger Fabric and IBM Blockchain, the platform will enable vendors to upload invoices and purchase orders for contractor work.
By deploying smart contracts, business rules can be set for contractors and payments automated based on the data generated. Potentially, the smart contract could also generate supplier invoices based on the approved timesheets stored on the blockchain.
Some of the benefits IBM expects from the platform include the elimination of blocked invoices, better compliance, and reduction in contractor onboarding and cost per invoice.
IBM has a web of active blockchain projects, and recently ranked top for blockchain patents in the U.S. IBM Food Trust is a high-profile initiative for food traceability, with participation from big brands like Nestle and Carrefour among others.
The company has partnered with the shipping company Maersk for the TradeLens blockchain supply chain platform. The initiative aims to digitize shipping industry processes to enable transparency. These are IBM owned initiatives, whereas most others are client engagements.
Yesterday, Ledger Insights reported on the IBM blockchain pharmaceutical alliance, which is working on use cases for DSCSA compliance.