Torsten Zube, blockchain lead at the SAP Innovation Center Network, sat down to talk about which blockchain use cases will burst forth from the hype to deliver real business value, why people must rethink what’s worked before − regardless of how successful, and the three essential ingredients to blockchain innovation.
Q: What’s your view about all the hype in the market around blockchain right now?
A: The good news is the hype is giving way to reality. Industry experts like Gartner Research report blockchain is past the peak on the hype cycle, and we’re seeing the same thing, working with many customers to develop solid use cases that can solve real-world business problems. There’s still a lot of market education required. Some people equate blockchain with bitcoin, while others think it’s a high-computing, high-energy, expensive technology. In one corner, we have the super-evangelists who think blockchain can save the earth, and then there are the pessimists who dismiss it as all hype. The truth lies somewhere between these two extremes.
How can businesses explore the real opportunities that blockchain offers to deliver business?
Start by identifying the real business problem the company is trying to solve, and figure out if blockchain can add value. Blockchain is a major shift from storing data in siloed systems of record and protecting data ownership to an open, data sharing economy. Go back to the business processes, and determine which problems haven’t been solved and the end goal. Having the right people is equally important, especially during the first phases of ideation. Blockchain is a fundamentally new approach, completely different from how seasoned experts have optimized business processes incrementally for decades. These people may not be helpful in early discussions because blockchain changes the way we manage data and do business together; it potentially redefines business processes from scratch. Many experts will be challenged to let go of old ideas about how business operates, not to mention society at-large.
Which blockchain use cases are most likely to succeed and why?
The first cases will optimize business processes already in place. For example, we’re co-innovating with Italy’s autonomous province of South Tyrol, using blockchain to digitalize manual government processes. This will improve citizen services by eliminating redundant processes that often collect the same information from people who are accessing different agency programs such as submitting applications for real estate transactions. TrueRec is another use case, allowing universities and employers to streamline credential validation for new-hires. We’re also developing POCs for pharmaceutical companies ensuring the provenance of medication from factory to pharmacy and many more.
When does huge disruption from blockchain kick in?
As blockchain matures, companies will use it to fundamentally change their business processes. Industry-led consortia will work on cases in trade finance and supply chain management that will reimagine industries. Blockchain may be the enabling technology, or something else could emerge. There will be revolutionizing use cases where blockchain enables something completely new to disrupt entire business models and industries, launching the next Amazon or Airbnb. Crypto-currency might be one of those things, but no one knows if it will be successful.
It seems as if everyone is jumping on the blockchain bandwagon. What differentiates SAP’s blockchain strategy?
Blockchain capabilities are an integral part of SAP’s overall product strategy and SAP Leonardo. Our mission is to enable the entire SAP ecosystem – our internal developers and external customers and partners – to use blockchain capabilities in solutions. But it’s not enough to have cool, new blockchain capabilities. It needs to be part of the overall business process scenario. That’s why we’re providing our customers with the ability to develop blockchain innovations that transform existing business processes, and connect those capabilities back into their core processes in SAP S/4HANA or another SAP ERP system. Using SAP Cloud Platform Blockchain service, developers can focus on what they need to build, and use value-added services, integrating blockchain capabilities directly into their applications. And, although we are a Hyperledger premium member, SAP is participating on multiple blockchains because our customers and partners are.
What are three most important things people should keep in mind as they move ahead with blockchain POCs?
The first is business value. I recently found myself standing in front of a white board looking at a blockchain use case thrilled at the simplification potential to eliminate redundant data streaming and workflows. Then I asked the team what’s in it for the business? We couldn’t immediately quantify any business outcomes that would justify this fundamental process change. You cannot be led by the technology. Second, before doing a POC, identify the key players in the connected network to find out their pain points, explore legal ramifications, IP-related issues and anything else that will help determine if blockchain is the most appropriate solution. Third, find people with the right combination of open-mindedness and experience. Blockchain is all about disruption, so you need people who are happy to disrupt the past, even their own accomplishments.
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