By Michael Reh and Dominik Heere

Wirsol-Rhein-Neckar-Arena in Sinsheim, Germany was at the center of attention, being the hosting avenue for the 2017 SAP Alumni event. Many familiar faces, both new and old were at the scene discussing topics such as digital transformation, technology trends, corporate and social responsibility. Following the initial networking session and great keynotes from Dietmar Hopp and Luka Mucic, the event proceeded to round table discussions on several innovative topics: Future Cities, Future of Mobility, Blockchain, Machine Learning, Industry 4.0 and Robotics, Revolution in Health. I had the distinct pleasure of hosting the Blockchain discussion session, and am delighted to share my impressions from our conversations.

Blockchain Fundamentals

Blockchain is currently a topic of great importance among industry professionals and market analysts. It is a cryptographically secure system of sharing and recording data in a distributed database, which allows for verification and confirmation of transactions without the need for a central counterparty to administer the system. It enables mutually unacquainted parties to engage in a transaction, whether it be information or money exchange. Thus, parties avoid high legal and transaction cost that are usually incurred in such situations.

It is rapidly becoming a decisive technology within the business world, with Gartner analysts envisioning the futuristic expression “Programmable Economy”. Within SAP, there is a very strong request for the Innovation Center Network to explore this innovative technology and promote the impact it could have on our business and that of our customers. Blockchain is considered one potential technology that enables new types of collaborative business processes leading to transformative business models.

Blockchain vs. Bitcoin

It was important to distinguish between blockchain and Bitcoin, as some colleagues noted that blockchain has a relatively negative connotation due to its relation to the cryptocurrency. It was made clear that blockchain is a protocol, and bitcoin is the application for a distributed currency exchange system. However, because blockchain properties have been evaluated mostly through bitcoin, it is an important benchmark for blockchain readiness and capabilities.

Cross-Industry Relevance

Most of the round table participants come from different industries ranging from Retail, Industrials, to Financial Services, which contributed towards the overall depth of conversation and quality of responses. There was a consensus in terms of the need to fully understand the implications of the technology and educate customers on the relevance to their respected business scenarios. Furthermore, participants expressed concerns for the stagnation of their industries, particularly Retail, in terms of the rate of digitization, and how it affects both consumers and producers. Additionally, the roles of Banking institutions were thoroughly discussed in the wake of the rapid development blockchain and distributed ledger technology. Questioning the future role of custody banks and other intermediary institutions is legitimate, and keeping the conversation active is an important step towards embracing the disruption.

 

To report this post you need to login first.

2 Comments

You must be Logged on to comment or reply to a post.

  1. Clemens Suter-Crazzolara

    Sounds like you had a very exciting discussion, many thanks for the wrap up! Interestingly, healthcare seems to be one of the areas where blockchain has applications too, especially as blockchain can strengthen data security. The Internet was designed for openness, yet data breaches, identity fraud, and ransomware are increasing and threaten anything digital. Patient records have already entered the limelight of cyber attacks. Blockchain’s security features such as high-grade encryption and decoupling of transactions from the identity of the participants, provides safeguards against these threats – and may thus protect patient data and increase trust. On the offsite, the storage of all longitudinal patient data, which can encompass gigabytes of data (just think of x-ray images) may offer additional challenges. Yet, extensible patient data, with complete visibility on who has seen the data, may have tremendous benefits.

    (0) 
  2. Peter Kirschbauer

    First of all, congrats for the excellent and inspiring SAP Alumni meeting in Sinsheim.
    Margret and SAP Alumni team: very well done!

    It was also a great idea to initiate various round table discussions on top themes in the light of the digital transformation.

    Many thanks to Dominik and Michael for hosting this round table on the super hype topic blockchain, and for sharing their activities at SAP and Tymlez. The whole theme still comes with much more questions than answers. Also our round table – unfortunately with less participants than expected – displayed a great deal of different levels of understanding, principle questions and doubts on „what at all is the deal for enterprises“. Still it was fun!

    Blockchain today is still largely unknown in public, however, more and more people say, they have already heard that term. Even Bitcoin seems still to a topic only for geeks, cryptocurrency investors and speculators.

    It makes sense to split the discussion into the field of the original idea of a free, open and permissionless public blockchain (which started already beginning of 2009), versus the attempt to leverage the principle ideas of blockchain technology for enterprises (private or consortium blockchains – permissioned), which started early 2014 in the banking industries and has spread into other industries starting 2015.

    The public blockchain vision – driven by communities such as Bitcoin and Ethereum – is based on the assumption of an intermediary-free, open, transparent, borderless, direct peer-to-peer exchange economy of values (digital money, rights, assets, intellectual properties, data, etc…).
    I do believe that this approach has real disruptive power. However, there is still a long way to go in order to fix the technical struggles with throughput, performance, and potential governance issues in the development communities, as well as to achieve required regulatory and government/industry endorsement or at least tolerance. Time will tell.

    So, how about the blockchain for enterprises?

     

    I have the impression that today the majority of activities in the blockchain for enterprise space are still driven by the fear of missing something out. This is not at all a bad thing, as it is always important to pay attention for new options and understand potentially changing competitive environments. Compared to the potential of public blockchains, I do believe that the majority of uses cases in the enterprise space with private or consortium blockchains are not really disruptive. They are rather continous improvement-type solutions, that certainly have the potential to improve process efficiency, data quality and securtity.

    There are the following industries or application areas in industries however, where I do believe blockchain technology can contribute a really great deal of improvement in future. They are characterized by the fact, that it is critical that multiple stakeholders have consent-driven write and read access to a (distributed) single source of truth, in an immutable, tamper-free, permissioned blockchain:

    • Banking  (KYC, AML, money transfer, asset trade, …) for customers and trading partners and entities
    • Healthcare (electronic health record, claims and payment settlement) for patients, physicians, hospitals, care taker, pharmacists, payers
    • Insurance (claims management) for policy holders, service providers, insurers and re-insurers
    • Supply chain (provencance, status tracking, transportation conditions, settlement) for producers, suppliers, logistics service providers, wholesalers, retailers and customers
    • IoT (identification, authentication, tracking and monitoring, ….) for devices (such as sensors) and data consumers
    • Energy Sector (commodity clearing for energy exchanges) for energy producers, sellers and buyers
    • Public Sector (certificates and documents such as identity cards, birth certificate, drivers license, social rights eligibilities, custom documents, land rights, … ) for various users and the citizens
    • Media (digital rights) for rights owners and consumers

    There are probably more industries and scenarios that apply as well, but I think that this is already a pretty impressive list.

    So, I do believe enterprises will get more serious about blockchain going forward. They will take an encouraged, still prudent approach and work with professional blockchain technology providers to make this very new technology conveniently applicable going forward, in order to significantly improve processing and outcome performance of your business, and in order to be prepared for any side-effects that may come from disruptive approaches in future, maybe even via the public blockchain.

    For SAP good news in the last weeks also made it to the press, when announcing, that SAP is joining the Hyperledger project and SAP Ariba inked a deal with blockchain start-up Everledger.

    I wish SAP all the best for further blockchain activities and contributions.

    (0) 

Leave a Reply