Kris Hansen, senior principal at SAP Financial Services, sat down with SAP News to share lessons learned about blockchain from the company’s latest experiences, why the SAP HANA Cloud Platform is the ultimate “cool innovation catalyst,” and what steps organizations need to take now to prepare for blockchain’s transformational impact on their business and industry.

Q: What has surprised you most about the emergence of the blockchain technology?

A: The genesis of blockchain is what blows me away. This very disruptive concept of a shared, immutable ledger was dropped anonymously at a forum in 2009. Since then, it has slowly, steadily gained ground to become a major industry phenomenon. Unlike so many disruptors, it wasn’t built in an R&D lab, by a major think tank, or even by designated experts in financial industry labs. Now it’s being applied to areas like Bitcoin and approaches like SAP’s partnership with Ripple Labs and ATB Financial to disrupt the market.

Q: Are there any must-have capabilities – technology or otherwise — for companies like SAP?

A: Most industries and organizations won’t switch over completely to a new concept of doing business overnight. These first steps consist of understanding how to align current portfolios to work with the blockchain and facilitate disruption. For the near future, blockchain will co-exist with other approaches. Payments is a good example. Blockchain will be a significant force but won’t completely replace checks or cash. Blockchain adds to the conversation. That’s why here at SAP, we’re figuring out how it expands our capabilities, including how our existing and emerging innovations work with blockchain.

For our customer, ATB Financial, we quickly realized that the investment they had made in our SAP Payment Engine gave us the flexibility to design payments rules for distributed ledger payments along their traditional payments flows. Having this centralized platform is a key component to be ready for the changes coming in settlement and payments as distributed ledger approaches are adopted.

Q: How are SAP’s customers tackling the blockchain opportunity?

A: Customers are intrigued, interested, and in some cases, actively exploring blockchain. I have long-running, evolving conversations with CFOs and CIOs about blockchain’s potential, and how they might harness its power. It’s become a disruptive element even in terms of how organizations think of their business model and industries at-large. For example, if you work in an insurance company, you’re imagining how blockchain might change the relationships between the people in your industry – it’s pretty disruptive and something to be concerned about. Some customers may be conducting R&D isolated from the rest of the business. Since SAP is their enterprise platform in the traditional ledger, they’re asking us for help in connecting the dots between the labs and real systems today so they can turn the blockchain concept into business results.

Q: Where are the biggest opportunities for SAP partners?

A: We recently collaborated with Ripple Labs, connecting them ATB Financial, to make the world’s first blockchain transfer from Canada and Germany. This kind of traction and uptake tells us we’re in the right place at the right time with our SAP HANA Cloud Platform (HCP) strategy. SAP HCP is the connector between established enterprise systems and the blockchain new world order. Our platform strategy is the ultimate “cool technology” catalyst, in this case making blockchain enterprise-grade by connecting it with the existing business systems of customers. Digital business networks around payments and other areas are opening up tremendous opportunities for SAP partners.

I’ve found that reimagining a business environment that is blockchain enabled also leads to new ideas on business operating models and digital disruption – SAP partners are key to help envision and action these new operating models.

Q: Based on SAP’s experiences, can you share important lessons learned?

A: It’s great to have programs supporting broad go to market strategies and sales activities for established solutions, but it’s just as important to foster small, almost rogue teams of innovators to do something totally different. We can’t go wrong when we continue to aggressively go after interesting innovations and respond fast when customers ask for our guidance. The key here is to stay customer focused and pursue the ultimate business value for the end customer and to keep this in mind during the innovation engagement.

Q: What are the top 3 things companies considering blockchain need to keep in mind right now?

A: First, it’s early days from a blockchain provider perspective. The market hasn’t matured, and we don’t know who’s going to win the race or even what the race is about yet. All we know is that blockchain is happening as a potentially game changing shift in how business value networks are formed. Second, decision-makers need to think about how they get ready for blockchain and start preparing now for disruption in their own business and entire industry. Third, given SAP’s platform strategy, we are well-positioned to help prepare customers to use blockchain technology for business and industry advantage.