SAP is one of the world’s largest corporate software conglomerates, with more than 335,000 customers in 180 countries. Blockchain is a new technology that has allowed cryptocurrencies like bitcoin to emerge as viable alternatives to traditional currency.
For corporations, leveraging the SaaS offering of SAP in a blockchain network can provide improved data security and significantly speed-up secured transactions.
How can blockchain support secure corporate operations?
Traditionally, information is stored and accessed on a central server, protected behind commercial-grade firewalls. Blockchain completely changes the game. It operates on an encrypted network of host devices, instead of a single server.
Distributed ledger technology is an industry term that is being thrown around – which is really just another term for blockchain. By removing singular ownership of information – using an encrypted network of devices, instead of one centralized server – it’s harder for false information to be inserted into the database. False information would need to be simultaneously inserted on every device in the network, using a constantly changing encryption key. Nothing with technology is impossible, but it is highly improbably that this type of network could be breached in a way that allows false information to be inserted into the ledger.
This is especially important for financial firms. As customers make withdrawals or deposits to their accounts, information is updated in the ledger. In a blockchain network, like bitcoin, every transaction is validated across all connected devices before being inserted into the ledger.
To many industry observers, it’s shocking that large banks have been largely playing catch-up with fintech startups in deploying blockchain technology. Some fintech analysts have put forth the concept that cryptocurrency could be used as an intermediary to handle international bank transfers more quickly. But, in my opinion, there’s no reason to convert currency during an international transfer – blockchain technology can support existing bank infrastructure. Converting currency to and from a volatile currency, like bitcoin, could prove problematic.
For these reasons, I believe we’ll continue to see both Fortune 500s and financial institutions find ways to use blockchain, divorced from the cryptocurrencies that originally highlighted what the technology was capable of.
Providing Historical Transaction Data
Whether the data being stored is financial, transactional or informational, it’s virtually impossible to hide prior transactions from the universally accessible transaction log. The log consists of blocks of data that cannot be altered. And, when you string these blocks of data together, you have a blockchain.
Once a valid transaction / interaction occurs, it is immediately added to the log. To decide whether or not a transaction request is valid, the network of devices work together to assess the request and decide whether it’s valid or fraudulent. This is a huge advantage over single access point systems that cannot rely on a consensus of devices with identical information to provide enhanced security.
Which types of blockchain networks does SAP’s software currently support?
SAP has configured their software to operate on:
- Consortium Blockchains
- Semi-Private Blockchains
- Private Blockchains and
- Public Blockchains.
They’ve upgraded their existing cloud platforms to empower corporations to take advantage of their new SAP Cloud Platform Blockchain Service. The primary advantage of leveraging SAP’s SaS solution is that minimal in-house IT support is required – lowering labor overhead for corporations that choose to deploy this system.
Additional Steps to Protect Data Security
Blockchain technology is an exciting advancement in the way companies store and share information – both internally and externally. But it doesn’t solve every data vulnerability.
VPN technology allows for all communication between corporate assets to be encrypted and masked. VPN companies vary widely in terms of service reliability, quality and cost. Outsourcing a VPN solution can be done, but it’s important to research options before committing to a specific vendor.
Things to look for include:
- Established track-record of providing reliable service.
- Ability to support teams spread out across the globe with hundreds of available international IP addresses to choose from.
- Easy-to-use software that minimizes employee confusion and trouble ticket submissions.
- Transparent, binding agreement not to track use of the service. If there are no external logs, then there is very limited opportunity for usage history to be compromised.
These considerations are critical for companies wanting to keep both internal and external communication channels confidential from competitors.
Employee Training and Security Protocols
The weakest links in any corporate security initiative are the employees. Unfortunately, computer literacy varies widely from employee to employee. It’s important to understand that employee technology training should be an ongoing priority.
Things to cover when helping employees understand how corporate data is secured include:
- Password hygiene.
- Acceptable devices for accessing privileged information.
- Examples of phishing emails and how to detect them.
- Clear protocols for who to contact in the event that a breach is suspected.
- Chain of command for reporting suspected phishing attempts or other suspicious activity.
The good news is that moving the company infrastructure from a traditional server system, to a blockchain network will not require significant hands-on training of low-level employees. For the most part, customer-facing employees do not need to understand the nuts and bolts of how data is communicated. They simply need a clear understanding of how they can effectively and securely interact with the platform – which for all intents and purposes will appear very similar to the platforms they’re already used to.
Will an uncertain legislative future impact corporate blockchain deployments?
Later this month, the U.S. Congressional Subcommittee on Oversight and Subcommittee on Research and Technology will convene to hear from a panel of industry experts on the use of blockchain in corporate America. This will be an important first step in the U.S. Legislative Branch’s attempt to wrap their heads around what blockchain does, how it can be used, and how best to legislate its future.
There are many questions that remain about how blockchain will be regulated. Most of these concerns center around bitcoin and other cryptocurrencies – as is being highlighted by bitcoin’s dramatic drop in shareholder value after South Korean government officials announced their intention to closely regulate it.
But this should be of minimal concern to corporations considering blockchain deployments for their current data storage and transmission needs. Blockchain technology already includes verbose archiving of activity for as long as the blockchain network is in use – helping to ensure corporations are compliant with most judicial discovery requirements out of the box.
The legislation we’re likely to see come out of Congress and international regulatory bodies in the future will have much more to do with the illegal or pseudo-illegal activities some bad actors use blockchain for, rather than the legitimate, legal purposes that corporations perform on a daily basis.
In conclusion, there are stellar opportunities for SAP customers to leverage advances in blockchain. Transactions can be completed faster, and more securely. Additional measures, when paired up with blockchain technology, will provide a comprehensive data security solution for most corporate use cases.