Some time ago, I read an article authored by Mattha Busby in The Guardian, which posed a very valid question: Can blockchain outlive the hype? Considering how exuberantly the term has been used by companies, influencers and media during the last months, there is no simple answer to that. Not at least because there is apparently no such thing as “the blockchain” anymore.

Depending on who you ask, the term is used to refer to a wide range of phenomena, such as a specific variant of database features, new user interfaces or business process reengineering. Blockchain can even be interpreted as a movement to democratize the internet. In the light of these various notions, I would like to respond to The Guardian and outline how we see blockchain at SAP.

An interpretation that most people who are involved in the ecosystem would sign off, could be the following: Blockchain is a concept and an architecture based on distributed ledger technology to record and share data across a multi-party network. But let’s look under the hood what this means in an enterprise context.





Blockchain is more than only technology

Global economy has evolved to a conglomerate of technology-driven, largely interdependent ecosystems, doing business across organizational boundaries, different geographies and legal frameworks. This distributed and highly connected nature of business makes it even more crucial to assure accuracy, data security, and process efficiency for business transactions. At SAP, we believe that blockchain is a powerful means to reinforce these characteristics in business processes, but also opens up unprecedented opportunities. We see blockchain as an interplay of different dimensions that will promote business success:

Technology : Blockchain is the underlying technological infrastructure that makes decentralized repositories work. We are talking about the domain of mathematicians and computer scientists working on consensus mechanisms, hashes and encryption. At SAP, we want to be technology-agnostic and open to the various blockchain technologies to offer customers maximum flexibility.

: Blockchain is the underlying technological infrastructure that makes decentralized repositories work. We are talking about the domain of mathematicians and computer scientists working on consensus mechanisms, hashes and encryption. At SAP, we want to be technology-agnostic and open to the various blockchain technologies to offer customers maximum flexibility. Core enterprise processes: Today’s enterprise processes are supported by current software solutions. They will continue to be the backbone of the global economy and will be enhanced and optimized by value-adding blockchain capabilities. Only if we manage to embed these into applications and solutions that run business processes, we will be successful in establishing blockchain in the corporate world.

Today’s enterprise processes are supported by current software solutions. They will continue to be the backbone of the global economy and will be enhanced and optimized by value-adding blockchain capabilities. Only if we manage to embed these into applications and solutions that run business processes, we will be successful in establishing blockchain in the corporate world. New business models based on multi-party collaboration: Blockchain is all about sharing data, governance and processes, and companies collaborating along a joint process beyond organizational boundaries. This can lead to a fundamental shift in the way business is done and to the emergence of new network-based business models built on an open source blockchain technology stack.

Still just big words to you? I would like to give you an example we are working on with several customers.





From farm to consumer: How blockchain improves food quality and availability

According to the Food and Agriculture Organization of the United Nations, a third of the world’s food supply is wasted. Consumers’ food sensitivities, allergies, and contaminations by pathogens persist in an increasingly connected global food supply chain. Complex manufactured food products, including pre-packaged, ready-to-eat meals, also create new demand for traceability of all ingredients.

In a lighthouse project that evolved from SAP’s blockchain co-innovation program, we seek to help agribusinesses, ingredient producers, food, manufacturers and retailers improve compliance and safeguard brand reputation by increasing confidence in food safety. Companies such as Johnsonville, Naturipe Farms or Maple Leaf aim to provide greater visibility across supply networks on ingredients leading back to geographic origin of raw materials. They want to increase the transparency about product and supply chain information to consumers and further improve the mechanisms to ensure the best possible quality.

To get this going, we plan to utilize SAP Global Track and Trace, an existing SAP solution, and extend it with blockchain capabilities (core enterprise processes). The blockchain will act as an additional layer complementary to the core processes that creates one shared view on the data from all involved stakeholders contributing to the supply chain (technology). It will allow them to trace ingredients and products, enter requests and offerings, and verify and execute transactions – everything in the most convenient and trusted way. This makes it possible to optimize the entire supply chain by enabling transparency over actual needs, just-in-time deliveries, and maximal food quality (new business models).





The advent of blockchain-motivated enterprise networks and business models

The Farm to Consumer project perfectly showcases a common pattern we see in many of our blockchain projects: cross-company collaboration along complex value chains for which the technology can remove abundant process steps and friction, and establish automated trust. And I firmly believe that it will not stop there.

If enterprises can access the complete version of product history, this could result in a shift from a central unilateral supplier-led production to a consumer demand-led supply organized by a consortium of peers. All organizations work together to produce what the end consumer wants. This would not only re-imagine current business processes, but enable a new business logic and new business models. Networking along the traditional lines of value chains will be replaced by sharing data governance, resources, processes and practices, and lead to joint learning opportunities.

At SAP, we campaign for the synergies of blockchain and open business ecosystems. For this reason, I’m very happy to share that we are teaming up with modum.io – a swiss-based tech startup developing systems to improve supply chain processes by combining blockchain technology and IoT. Together with their ambitious team of experts, we are currently working on specific pilot projects and will reveal how blockchain creates value for our first joint customer at the upcoming SAPPHIRE NOW conference between June 4-7 in Orlando.

Apropos value. After a balanced discussion, Mattha Busby’s article in The Guardian came to the following conclusion: “While blockchain technology might outlive the hype, the jury is still out whether it can really change the status quo.” At least for the enterprise sector, I firmly believe it will.

If you want to learn more about SAP’s blockchain strategy and offering, come and visit us at CONSENSUS 2018 on May 14-16 in New York City.