Bringing blockchain to enterprises with SAP

23 April 2018

Connor Nelson

Connor Nelson

Consultant

When the first distributed ledger was started in 2009 for a cryptocurrency called Bitcoin, no one could predict the revolution it would spark. Today, the underlying technology behind Bitcoin, blockchain, has proliferated across various enterprises. Spending by enterprises and other entities on blockchain development is expected to reach $2.1 billion this year and SAP wants a piece of the pie… 

At a very high level Blockchain is nothing but a cryptographic decentralized ledger and the underlying technology of all cryptocurrencies. SAP will be creating their own cryptocurrency called SAPS and require all of their customers to pay them in this. Just kidding! SAP is not creating their own cryptocurrency or even their own blockchain. Instead they will be collaborating with Hyperledger, a group of open source projects focused around distributed ledger technologies hosted by The Linux Foundation. Hyperledger provides an alternative to the cryptocurrency-based blockchain model. Instead it focuses on developing blockchain frameworks and modules to support global enterprise. Contributors to these projects include IBM, Intel, J.P Morgan and a list of others

SAP is in the process of integrating Hyperledger’s blockchain framework, Fabric, into their SAP Cloud platform and are calling it SAP Blockchain as a Service (BaaS). This means that customers won’t have to worry about setting up their own blockchain. It also provides an easy-to-use environment to develop and test applications on the blockchain. Over the past year, SAP has been working with more than 50 customers as part of their Blockchain co-innovation program.

When a customer joins this program, SAP takes a Leonardo approach - collaborating with the customer to understand current problems that could  be solved using blockchain. This is greatly beneficial for SAP in that it enables them to learn valuable use cases, as well as giving them a starting point for proposing and developing blockchain solutions. BaaS gives SAP yet another digital innovation to consider when collaborating with customers in their design thinking Leonardo workshops.
 

Where can Blockchain be beneficial?

Yes, Blockchain is a revolutionary technology because of its newfound immutability, security and decentralization. But it is not going to completely replace all centralized servers, transactional databases, or ERP systems. There are particular parameters which need to be met in order for blockchain to be applicable for your process. The diagram below can be used to determine if blockchain may be beneficial for your scenario:


Source: LinkedIn
 

Industry specific benefits 

Although there are new use cases being proposed and discovered on a daily basis, there are a few industries which will have the most to benefit from using blockchain. SAP is currently working on POCs with multiple customers in these industries:

Pharmaceuticals The movement of a drug throughout a supply chain requires a huge amount of trust and security between involved parties. Blockchain can be used to track and authenticate these drugs in a way which is more secure than ever before. 
 
Consumer Products Contaminated food products can spread illness and it is usually difficult to trace their origins. Blockchain provides a transparent trail for each product throughout the supply chain. This helps to locate the original source of contamination much quicker, facilitating the removal of the other contaminated products from shelves. 

Transportation Management Embedding Bill of Lading documents into the blockchain optimizes the process: saving time and money. It also offers increased security and an immutable record, which can help prevent stolen or lost freight: a big issue in the industry. 

Agricultural Customers today are wanting to know more and more where their food is coming from. By harnessing blockchain there can be an immutable record of where the food came from, where it has been, and even what temperature it has been maintained at. 
 

Let’s Get Started

If you think your business could have a process simplified by blockchain, want to join the conversation, or would just like to learn more you can reach out to me or meet with one of our experts if you are attending Sapphire in Orlando in June. SAP has also just started accepting applications for its Beta Program, which will allow users to get their hands-on BaaS, so they can start to develop blockchain extensions as well as provide feedback to SAP. Bluefin has been recently been approved to join this program so I am off to test it out! Click here if you would like to sign up to join the SAP jam group, email list and monthly update calls. 
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About the author

Connor Nelson

Consultant

Bluefin and SAP S/4HANA - welcome to the one horse race