Blockchain has been a strategic topic for SAP for several years as the technology has evolved from a thought leadership topic into solid use cases. Together with customers and partners, SAP hosted the “Outside the Block” enterprise blockchain summit in Berlin to present use cases and discuss what the future has in store for blockchain.
Today, cross-border and cross-company business and value chains have become the norm rather than the exception. Exchanging information in real time with multiple partners provides for a whole new set of challenges and explains in part the hype that blockchain experienced over the last couple of years. As a technology building on decentralization, blockchain requires multi-participant partnership and makes business beyond boundaries based on trust both a reality and necessity.
“At SAP we believe in this openness that allows ourselves, our customers, and partners to tap into the wisdom of the larger SAP ecosystem,” said Dr.-Ing. Martin Heinig, managing director of SAP Labs Berlin, as he opened the first enterprise blockchain event in Berlin.
“The days are gone in which the ‘Cold War’ was a fitting metaphor for the way companies shielded their knowledge and businesses,” said Heinig, referring to the once-divided city of Berlin as a location for SAP’s Blockchain Summit. SAP Berlin, together with sponsors Telekom Innovation Laboratories, Dell EMC, Camelot IT Labs, and Wipro, hosted more than 250 participants from 120 companies and 21 countries.
“Blockchain unfolds its potential only within a network of partners,” Heinig said.
Torsten Zube, head of Blockchain at SAP, added: “It empowers us to share data in a trusted way, in a more efficient way that we have ever seen before.” He recalled a recent conversation with an analyst: “‘Blockchain Winter is coming’ sums up the current expectations quite nicely. However, it is not the time to hibernate. The hype is over, and I see this as an opportunity to focus on what blockchain is originally about and what it inspires.”
Blockchain Enables Customers and Partners as Part of the Intelligent Enterprise
Over the last two years, SAP has been working with customers and partners that have identified tangible blockchain use cases. Starting as a thought leadership topic, enterprise blockchain at SAP has developed into a hands-on technology. SAP provides customers and partners with both the enablement as well as an environment to get started.
A recent survey conducted among 250 SAP customers, including corporates as well as SMEs, revealed that 92 percent would join an SAP-led blockchain consortium. “SAP is a system of record,” noted Gil Perez, head of Digital Customer Initiatives at SAP. “So the customers expressed their wish for an industry-based consortium, not one with a technology focus, but a consortium that concentrates on business viability and alignment.”
As Zube pointed out, decentralized networks stand and fall with strategic partnerships. SAP has therefore announced multi-cloud plans to extend its offering, continuing its open blockchain approach.
Transforming Thought Leadership into Real Business Value
On stage, co-innovation partner modum.io presented an example for new blockchain-driven, network-based business models developed within SAP’s enterprise blockchain co-innovation program. Located in Zurich, Switzerland, modum.io develops solutions for quality monitoring in sensitive supply chains such as pharma.
The solution MODSense, developed together with SAP and customer Swiss Post, is now commercially available. MODSense was built using the SAP Cloud Platform Blockchain service. It enables customers to access secure data in real time without them having to open the parcel.
“Modum and SAP share a similar vision in terms of architecture,” said Marc Degen, co-founder and member of the Board at modum.io AG. “Our strategic partnership has helped us to build a scalable, blockchain-based solution that meets the performance requirements of globally operating customers.”
Blockchain in the Supply Chain Field: Technology with a Purpose
“Technology is used best when applied to solve the world’s biggest challenges. It has enormous potential within the field of supply chain,” said Paige Wei-Cox, head of Supply Chain Networks at SAP, as she highlighted one of the global economy’s greatest problems: counterfeit markets. Believed to be an issue only in developing countries for quite some time, they have indeed become dangerous for consumer goods markets everywhere, in particular food and pharmacy.
SAP is helping solve that problem with blockchain. “Pharmaceuticals have a particularly complex supply chain,” explained Wei-Cox. “It involves manufacturers, brand owners, wholesalers, logistic distributors, and pharmacies.” According to the Wall Street Journal, 95 percent of drug outlets in the U.S. are selling non-compliant pharma. Fake pharma kills over 1 million people every year. With SAP Information Collaboration Hub for Life Sciences, 15 customers collaborate to apply blockchain in the context of verification and saleable returns to meet legal compliance.
Each year, 420,000 people die from food-borne diseases, not least because the complex supply chain makes product recalls so difficult. SAP has launched the farm-to-consumer blockchain initiative with 10 customers to improve material provenance and traceability. By providing a decentralized platform, SAP enables data sharing across the supply chain network so end-to-end visibility is improved.
With customers and partners, SAP has developed numerous use cases, a selection of which were presented live on stage at the enterprise blockchain summit. Beiersdorf and GS1 showed what blockchain can do for the exchange of pallets. IBM presented the benefits of blockchain in the oil and gas industry. Deutsche Telekom and Camelot ITLab explained how mobile device theft can now be fought with blockchain. Kellogg’s showed how it is augmenting the food supply chain with blockchain.
While the list could just go on and on, it clearly shows two things: First, blockchain has really seized the enterprise space. Many companies have a clear understanding of the potential but also the limitations of the technology. This allows them to develop tangible projects that turn into productive solutions. Second, blockchain is a tool for multi-party collaboration, which unfolds its true value once companies do also start to collaborate in an open and trustful fashion. Something that all attendees of Outside the Block had fully embraced and which created a vibrant atmosphere throughout the day.
“Collaboration is crucial to success powered by blockchain,” said Heinig. “The variety revealed by the use cases we have co-developed so far makes the enormous potential of blockchain come to life.”
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