Will Blockchain Block SAP’s Chain?

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Can blockchain replace traditional database functionality in an enterprise setting?

SAP’s success has been phenomenal, as witnessed by the company being recently crowned by the market as the highest valued German company (ahead of Volkswagen and Siemens). For me, this success has to do with good German management practices, the right adaptability and injection from non-German insights and technologies, and perhaps more importantly, their consistency.

Hamel and Prahalad explained that the success of a company is built on having the right definition of core competencies. Or as it is described in Wikipedia, “a harmonized combination of multiple resources and skills that distinguish a firm in the marketplace.”

I think one of these core competencies is “the Document.” When I started as an SAP consultant in 1996, the Document became my mantra. All that was happening in the organization’s supply chain was being captured in documents. This was the entry point for the tables and helped us move the goods produced, the financial transactions we needed for the money flow, and the control of our plants and warehouses.

But now we have Blockchain, a transparent ledger that consists of documents with the ability to capture all different movements in the entire supply chain. And with the move from supply chains to web-chains (interactions flowing more through the web than parallel supply chains), the need for capturing these movements and their changes is vital.

Would the Blockchain then not become an alternative for what I believe to be the core of SAP’s reign in the corporate world? Can we not construct flexible process models that build on the events happening in the Blockchain? This would change the game from “Enterprise Resource Planning” to “Societal Resource Planning.” If we see the efficiency that ERP brought to our enterprises, what should we expect from efficiency gains in society with a SRP platform?

Currently, Blockchain is probably not the best, considering the size of documents that would be processed and the computing power required. But with the entrance of quantum computing, this could be an interesting way to examine what SAP will be doing.

For now, I am curious how SAP will integrate some of the more viable Blockchain scenarios entering the market place. Think of claims handling in the insurance market that needs to be integrated into the ERP backbone, or how certain Blockchain scenarios on identity can be used by the government.

I hope Sapphire 2017 will bring some insight on what SAP will offer. But to be honest, I really hope they will shine a light on what this technology will mean for SAP in five years time.

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