Blockchain: ERP Chain Letters

Hardly any technology has attracted as much attention in recent years as blockchain. Based on the soaring popularity of cryptocurrencies, more and more sectors outside the financial industry are examining the potential applications of this highly encrypted and thus very secure distributed database technology.

The topic is keeping CxOs busy: in an IBM study from last year, one-third of the nearly 3,000 top managers surveyed said they were either already using blockchain in their company or were considering it.

Eight out of ten CxOs investing in blockchain want to use it to address financial technology changes in their industry or develop new business models.

Some of the CxOs surveyed see blockchain as providing new transaction opportunities to gain greater trust, transparency and traceability within partner networks.

"Blockchain makes it possible for all participants to have the same transaction in view at the same time. From this new type of trusted transaction, new business models, processes and platforms are emerging where all participants in an ecosystem can be connected to create new business value"

Brigid McDermott, IBM vice president for blockchain business development, said.

Logistics, energy etc.

Blockchain is a database system distributed across many nodes of a network, such as the Internet, that is protected from tampering by both distribution and encryption through strong cryptography.

The "network", in which the data is concatenated and encrypted, has yet another advantage: A data transaction can take place without intermediaries - and it is also forgery-proof!

Blockchain could radically change the way market participants in different industries transact with each other - and in the process, transform entire industries.

Whether in logistics and production or in the energy sector, numerous companies are testing possible applications. From direct electricity trading between neighbors to a transparently traceable supply chain.

The possibilities offered by blockchain technology provide an ideal basis for large networks with many different partners. They function in a similar way to a shared ledger and enable shared, unalterable records of all transactions that take place within this network.

Moreover, they allow the respective authorized partners to access the trusted data in real time. With the use of this technology, a completely new system of instructions and approvals can be introduced into the flow of information.

Transaction Register for IoT & Supply Chain

Meanwhile, there is also an SAP Leonardo initiative around Blockchain. The aim of this initiative is to integrate a digital transaction register into solutions for IoT, manufacturing and the digital logistics chain using the SAP Cloud Platform "Blockchain Service".

"Our customers and partners want to work with us and rely on blockchain as a decentralized transaction repository to improve collaboration and transparency"

Tanja Rückert, President IoT and Digital Supply Chain at SAP, said last year.

"We want to develop joint innovations with leading global companies. The goal is a future where blockchain is an integral part of the digital value chain."

"Deutsche Telekom sees great potential for blockchain technology in the telecommunications business"

says Hartmut Mueller, Senior Vice President, Head of Business Solutions at Deutsche Telekom IT.

"Our collaboration with SAP will accelerate digitization - to the benefit of our customers."

The SAP Leonardo Blockchain Co-Innovation Program enables SAP customers and partners to learn about applications that can capture various events in a blockchain - from product design and development to manufacturing and logistics for product tracking.

The program also addresses serialization of parts, order verification for inventory management, and product origin and authenticity.

SAP is also looking at digital supply chain scenarios where different suppliers store quotes directly in a blockchain to improve efficiency in their business networks.

This makes it obvious that the topic of blockchain extends far beyond the demands and requirements of the SAP community. A comprehensive and holistic view of the new "ERP chain letters" will be available in the pilot issue of leonardo.report at the DSAG annual congress and, starting in 2019, will be published quarterly as a magazine and on www.leonardo.report.