Ernst & Young and Microsoft expand blockchain-based solution to provide a financial system of record
By Pavithra R
Ernst & Young and Microsoft has announced the expansion of Microsoft’s blockchain based solution for gaming rights and royalties management to provide a financial system of record, from contract creation to payment and reconciliation.
The blockchain extension builds on the continued collaboration between Microsoft and EY. Microsoft is planning to use the expanded blockchain functions to enable its Microsoft Xbox gaming partners and its network of artists and other content creators to gain increased visibility into tracking, management and payment processing for royalty contracts.
EY is expecting to assist its business-to-business (B2B) enterprise clients that have contractually driven multiparty cash flow distributions to create similar blockchain platforms to assist them in automating contract-related calculations and processing.
With its expanded blockchain, Microsoft will:
- Accelerate contract digitization for faster contract creation using AI based on Microsoft Azure
- Seamlessly generate and integrate statements and invoices with enterprise resource planning (ERP) applications to process and record royalties quickly and with greater visibility & transparency
- Generate accounting entries from the blockchain platform into existing ERP applications for enhanced efficiency and accounting capabilities
- Incorporate the controls & compliance standards required to meet the criteria for the solution to function as a financial system of record
“In this go-live, we successfully generated the first round of partner payments utilizing blockchain and smart contract technology. This expanded solution will help streamline financial and operational processes with the ability to scale, reduce heavy manual overhead and improve the experience for Microsoft’s gaming partners. We look forward to continuing to scale this solution across our royalties ecosystem — improving our processes and the continuation of our modern finance journey,” said Luke Fewel, General Manager of Global Finance Operations, Microsoft.
The expanded solution is touted to reduce processing time by 99%, with near real time calculation of royalties using digital contracts across game development partners. The blockchain application has been tested under high volume of usage and is capable of processing 2 mn transactions per day. These new capabilities is expected to help improve the end-to-end royalties experience by integrating with Microsoft’s gaming ecosystem and providing their partners on the blockchain network with earlier visibility and availability of data in statements and invoices from the Microsoft rights and royalties blockchain.
“Blockchains could well become the glue that digitizes interactions between enterprises. This go-live represents another big step on that path, extending the level of automation and cycle time compression all the way from digitizing the contract to posting financial accruals. Blockchain solutions like this help raise the bar for enterprise integration, from point-to-point integration to ecosystem-level automation,” said Paul Brody, EY Global Blockchain Leader.
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January 27, 2023
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