Blockchain: Extraordinary Talent or Unmet Expectations?
Blockchain continues to be a topic of interest for the Life Sciences industry that, despite the significant hype, has produced a variety of high value use cases that will only continue to grow in number and maturity. We recently conducted a meeting at our corporate headquarters in Germany with a cross section of some of the largest and most influential Life Sciences companies around Blockchain and the discussions were both exciting and enlightening on many levels.
I was reminded of my days as a college athlete in the US playing American football. Over the four years that I participated, I met some great individuals who had incredible athletic skills far beyond the levels that I had competed in high school. Bigger, stronger and faster than any athletes I had ever faced, I was amazed at the untapped potential of their abilities.
Although several individuals were able to realize their potential to have successful professional careers, many of the most talented athletes did not have a professional career nor were they even able to achieve any success at the collegiate level. Injuries, academics, girlfriends, homesickness or simply life interceded to cause a single or series of events that prevented them from achieving their potential in spite of their remarkable athletic abilities.
It is in that context that I was reminded about the power of Blockchain. As a technology, Blockchain displays a technical ability that could completely disrupt the traditional business models to not only solve but reimagine new approaches while simultaneously reducing the cost of the end to end process. Technologists across the globe look to demonstrate the ability of this remarkable technology in a wide range of use cases but, without the appropriate strategy, governance and focus, Blockchain could end up as another on the long list of cool technologies that never achieved any significant social or business value.
During the working session, both SAP and our Life Sciences customers discussed a variety of scenarios, use cases and capabilities to better understand the impact of the technology. Although we are still early in the development of Blockchain, there are several emerging use cases that should help organizations utilize the technology in a manner that is more likely to succeed at this early stage of development. Specifically, I’ve included some of the key use case scenarios where Blockchain could be a powerful capability including:
- Automate Agreements: one of the core capabilities of Blockchain is its ability to create an immutable and permanent record, imbedding business terms into that record across a private or public network of individuals or organizations. Any document that is posted to the Blockchain remains available for permanent access and/or validation, with the ability to automatically process a transaction based on the previous postings to the Blockchain.
- Disintermediation: many industries have value chains where intermediaries participate in the process that increase costs and time without providing incremental value to the participants. Blockchain can eliminate non-value add participants by directly connecting the key parties that streamline interactions and reduce costs across the network
- Absence of Trust: Blockchain is an excellent tool to ensure the integrity of an agreement through the use of an immutable or un-editable record that ensures the accuracy of the terms among the participants who may be known or unknown to each other. The process of adding/creating new blocks ensures the integrity of the transactions as each event verifies a new block at the moment it is created.
- Exchange Data: another core capability of Blockchain is the ability to share data across a private or public group organizations given the blockchain is replicated across the network. Something as simple as posting a bill of lading into the Blockchain, where the entire network of import/export participants could have visibility, provide an excellent example of how Blockchain could disrupt the process of transporting goods across the globe.
- Network Participants: Blockchain is most effective when used across a network of individuals or organizations who are initiating, collaborating or contracting with each another through the Blockchain. Blockchain’s ability to extend and enhance an existing process while simultaneously eliminating a variety of redundant or non-value adding steps will greatly simply end to end, value chain processes.
SAP believes that there is a tremendous opportunity for Blockchain by extending and transforming a variety of enterprise processes. SAP’s Blockchain Services are seamlessly posting transactions into the Blockchain that expose the networks to the immutable Blockchain record that will be leveraged downstream in subsequent processes.
For example, Blockchain’s ability to create the unalterable record of the purchase requirement, quantity and price, link it to the receipt and automatically process the financial terms of the transaction could significantly reduce the cost and complexity of business transactions.
Further, Blockchain can ensure the integrity of the asset or agreement. Creating, encrypting and maintaining a variety of records in the Blockchain can serve as a validation of the authenticity of a pharmaceutical or medical product, ensure the immediate transfer of funds once the terms of a contract are met or execute any set of business rules that are digitally embedded into the process.
In summary, SAP believes in the tremendous potential of Blockchain and we look forward to seeing Life Sciences, as well as other industries, reap the power of the technology as we extend, enhance and streamline enterprise processes so that The Best Run Companies Run SAP.