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Business Processes on Blockchain: Scenarios from SAP

The word “blockchain” sounds now from every corner. It has become a buzzword in the online media, on TV, in all social media. SAP does not stand aside from the new technology. SAP is developing new standards for the use of blockchain, as well as creating pilot projects with some of its partners.

SAP is a premium member of the Hyperledger network. The company also joined the Blockchain Research Institute. Together with other technology companies, SAP is actively working on the establishment of new blockchain standards and formats. Participation in the process is very important because blockchain is young, quickly changing technology. While the first versions of blockchain networks had significant limitations, now they are working safer and faster.

In the SAP portfolio, the blockchain is represented by the SAP Leonardo platform.

What is SAP Leonardo? This is a platform that includes many component blocks – machine learning, the Internet of things, Big Data, Research Data, analytics, etc. The client or the developer can assemble the necessary system from these blocks.

Why did SAP decide to place the blockchain in this particular environment? Because SAP strongly believes that these elements will bring more benefits to customers together rather than separately. In SAP Leonardo, the blockchain will be a continuation of other services.

SAP Leonardo works on a single technology platform – it uses the SAP HANA and the Hadoop distributed storage system. For over 40 years, SAP has been building an infrastructure for business customers that is available on the SAP Cloud Platform, and blockchain is some kind of a cherry on this cake.

A wide set of technological solutions allows SAP customers to quickly and without significant financial and labor costs create prototypes of solutions that can be used and integrated into the ecosystem of other SAP products, as well as into stand-alone systems. An important thing to point – you can combine a distributed ledger and the Internet of things.

What is a Smart Contract? This is a contract that is stored on the blockchain network and configured to come into action under certain conditions. When specific conditions are met, the contract is triggered. However, how to make sure that the specified conditions are really fulfilled? There are two options: confirmation from a person or confirmation received from a sensor, a car, or another device. Of course, the second option provides better automation of business processes. For example, such mechanisms allow you to track the receipt of goods on a store shelf and the execution of a transaction. Here, the Internet of things using sensors confirms the receipt of goods, and all information is stored on the blockchain network.

SAP scenarios of applying blockchain in business processes

The scenarios that SAP experts and their partners work on are aimed at solving six main tasks:

  • Reducing the number of intermediaries
  • Making business processes cheaper
  • Ensuring transparency
  • Increasing efficiency
  • Increasing security
  • Increasing automation

There are both cross-industrial and industrial scenarios. For example, scenarios related to operations with securities or loans that have to do with the financial industry. Below we will talk about several projects.

The first example has to do with the optimization of international interbank payments. Canadian ATB Financials and German ReiseBank made a test payment using the blockchain and the Ripple network. Each bank used the SAP Payment Management system to optimize payments. The process was carried out using the SAP Cloud Platform. As a result, the transaction was completed in a few seconds instead of a few days. Today, for bank payments you need a number of intermediaries, and you have to track many factors. The above example shows how blockchain can significantly reduce labor costs.

Here is another example. Issuing bonded loans is a difficult process that is often done manually by financial institutions. During extended communication, paper documents are mainly used – contracts, confirmations, and statements. Deloitte used the SAP Loans Management solution based on the SAP Cloud Platform, integrated with a distributed ledger. As a result, operations with securities now take only one day. Earlier this required two-three days. In this case, the beneficiaries of using the blockchain are banks, borrowers, investors.

The next example is a pilot project in a Know Your Customer sphere. There is a common problem – every time we come to some organization, you have to go through an identification cycle – present an ID, sometimes even several times in different departments of the same organization. How to simplify this process?

Personal data can be stored on the blockchain. The application works as follows: the user logs in to the portal based on SAP UI5 and gets access to the application on the blockchain. Customer data is stored in the SAP CRM system. Document data is stored in SAP HCP Documents. Information about the relationships between a particular customer and his documents are stored in DLT. As a result, the identification process gets significantly accelerated and simplified. This scenario also involves better risk management and less fraud or money laundering opportunities.

It is important to note that the introduction of blockchain also involves an increase in customer satisfaction. The main problem, for now, is the lack of legislation, while technical limitations no longer exist.

About the author:

My name is David Balaban. I run the project which presents expert opinions on contemporary information security matters. I am a computer security researcher with over 15 years of experience in malware analysis antivirus software. SAP community needs and wants great content on topics I am good at like infosec, IoT, blockchain. I wish to share my knowledge and experience here and connect with people who I might never have had any contact with otherwise.

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  • Hi David,

    with the CRUD smart (or rather quite dumb) contract, one can simply store any data that is currently available in their ECC. it can also be an opportunity to slim down some of the redundant data that today exists in denormalized tables of most ECC implementations.

    the biggest challenge in my mind is creating a network of members willing to share their ledger data with each other. hyperledger offers certain internal privacy, so to speak, but i haven't seen that as currently available in the development setup that is offered by SAP cloud foundry sample implementation.

    one more thing to keep in mind, hyperledger fabric is an open source project that lives on github and that anyone can contribute to.

    i have created an SAP wiki page around this topic a couple of years back, so feel free to contribute there as well:

    thank you, greg