Blockchain is the underpinning technology that can eliminate the middleman in carrying out legal and corporate operations. Blockchain is revolutionizing how people conduct business with one another.

Gartner reports that by the year 2030, blockchain technology is anticipated to generate a revenue of $3.1 trillion globally for enterprises. Blockchain is especially useful in commercial scenarios where data needs to be stored in a database accessible by numerous untrusted parties on a distributed basis. Modern-day businesses are now leveraging the SAP Cloud technology and SAP Blockchain toolset to experiment with and swiftly develop distributed databases. Several large companies invest millions of dollars yearly in the blockchain industry in the United States, which currently dominates the finance market.

This article is focused on highlighting what SAP blockchain is, the components and benefits of this technology, and how and in what ways it applies to enterprise sectors.

First, let us examine the concept of blockchain-as-a-service from the perspective of an enterprise. Then later, we will delve into the specifics of SAP blockchain applications and services.

Abbreviations 

The following abbreviations are used in this guide:

  • SAP: Systems, Applications, and Products
  • ERP: Enterprise Resource Planning
  • BAAS: Blockchain as a Service
  • HANA: High-performance Analytic Appliance (Database) 

These terms are further explained in later sections of this article.

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Blockchain as a Service (BAAS)

Under the BAAS model, the provider (platform-as-a-service provider) handles both the infrastructure and the software. For example, a client can simply access blockchain technology on the SAP cloud infrastructure. Businesses do not have to invest money in the operation and maintenance of services as no infrastructure or staff is required. They just have to pay an associated fee for the service. Numerous well-known platforms for blockchain-as-a-service exist, including SAP Blockchain, IBM Blockchain Platform, Amazon Blockchain Templates, and DragonChain.

SAP Blockchain: An Introduction

SAP provides numerous services, including Analytics, Data Management, User Experience, etc. The SAP Blockchain service was launched on May 17, 2017. It was introduced at the yearly Sapphire event, which was held in Orlando, United States. 

SAP describes the blockchain architecture as  

Technology + Business Operations + The Latest Network-Based Business Models

These three parts play a significant role in formulating a significant and robust blockchain solution. The business operations and requirements are the only parts on which the technology and business processes are focused. At the same time, the network-based business models ensure a differentiating blockchain factor in building a network of participants.

Image Source: assets.dm.ux.sap.com

The SAP Blockchain is a service that is ready to use in nature. Therefore, the companies don't need to own the hardware asset or software to host their blockchain. The prominent advantage of SAP blockchain is that the companies/clients are not required to participate in the initial infrastructure configuration. SAP blockchain technology combines the application with tried-and-true SAP platform solutions, fostering synergy among multiple parties. This process enables businesses to incorporate blockchain into their existing applications.

SAP Leonardo

The SAP Leonardo is the main tool set where all blockchain services reside. SAP technology brought together intelligent technologies, business services, and industrial knowledge. The blockchain for SAP (system applications and products) carries out its operations as blockchain-as-a-service. It enables businesses to develop custom blockchain extensions for their existing applications that are widely accepted. SAP leverages open standards to enable its users to develop the latest private blockchain platforms with the cooperative association. The cooperative association here points to consortium platforms, i.e., platforms built by a group of organizations that agreed on a combined objective. SAP blockchain technology enables businesses and other clients to maintain blockchain with complete confidence in the transparency of transactions and accounting executions in their business processes.

Main Components of SAP Blockchain

The ecosystem of SAP services and applications is mainly composed of two main parts.

  1. SAP Cloud Platform For Blockchain
  2. SAP HANA Service For Blockchain

SAP Cloud Platform For Blockchain

To create application extensions and seamlessly integrate enterprise infrastructure, the SAP Cloud Platform is used by more than 16,000 clients and partners globally. Hyperledger Fabric, Quorum, and MultiChain are three blockchain frameworks that the SAP Cloud Platform supports. The SAP Cloud Platform provides numerous and concurrent versions of these frameworks. Quorum and MultiChain frameworks are still in testing phases, are only available for a free trial, and are not up for working in production environments. So, our main focus is to get you through the working agenda of Hyperledger in SAP blockchain for now. 

Hyperledger Fabric

The Hyperledger Foundation is led by the Linux Foundation. It is established with the goal of creating open-source blockchain components for business users. Through the provision of a front-end for the open-source Hyperledger, SAP Leonardo gives businesses a simple method for setting up and managing blockchain databases. Through SAP, an organization can swiftly use Hyperledger and simply link it with any of their subscribed SAP cloud services, such as SAP Cloud analytics, Cloud HR, or CRM. The Hyperledger Fabric version 1.4 is permitted to be used by SAP in work settings. There are nodes (individual ledger users) and channels (communication interfaces) in a Hyperledger. Hyperledger treats its SAP application as nodes, and all nodes need to be connected to a channel in order to engage with a blockchain database. 

SAP Cloud Platform: Utilization

  • The essential step to using SAP cloud with blockchain is to register an SAP Cloud service account and subscribe to blockchain services. 
  • The next step is to build and connect to a Hyperledger Fabric-supported database. This connection is achieved by using the SAP cloud cockpit.
  • Subscriber/User must initially launch a blockchain database in the cloud services cockpit via a fresh instance of the Hyperledger fabric.
  • The next step is to build a new channel for Hyperledger. A separate channel is constructed for each SAP application that requires interaction with the Hyperledger.
  • After that, the Hyperledger can be accessed by an SAP Cloud platform just like any other standard SAP service for data storage. Hyperledger offers all the advantages of a fully functional distributed enterprise.
Image Source: blogs.sap.com

In conclusion, the use of SAP Cloud is beneficial in connecting SAP-enabled enterprise applications to Hyperledger Fabric blockchain networks.

SAP HANA Service For Blockchain

The SAP HANA blockchain is another crucial component of the SAP Cloud Blockchain Services. Businesses can utilize this service to link their blockchain systems to SAP's HANA database environment. Through this service, businesses may combine blockchain data with master/transaction data from SAP HANA to create a comprehensive analytical solution, as shown in the picture.

Image Source: blogs.sap.com

SAP HANA Service: Utilization

The two key parts compose the basic HANA service:

  1. Blockchain Adapter
  2. Integration Service

Blockchain Adapter: This adapter is an SDI connector that is used to connect SAP HANA to the cloud blockchain service. This connection permits back-and-forth transfer/exchange of data. Internally the HANA database consists of blockchain data in the form of virtual tables inside the HANA database. The blockchain data is also replicated into the HANA database through these virtual tables. The alterations in blockchain data are detected continuously, and these changes in blockchain data are also applied to the HANA tables.

Integration Service: The integration service is installed on the SAP cloud to assist with setting up connections on the cloud side. This integration service provides APIs necessary to retrieve data from a blockchain node and to re-write data onto a node. The HANA blockchain adapter also uses these APIs to control the data transfer between SAP HANA and the blockchain. The complete architecture is given in the figure below for your reference. 

Image Source: blog.camelot-group.com

Is SAP a Blockchain ERP?

Yes. Among the top ERP suppliers, SAP appears to be ahead of the game in terms of investigating various blockchain implementation strategies. Blockchain technology is ideal for the manufacturing sector. The reason is that it allows for integrating a variety of data into a single chain. For example, information on the product specification, history of iterations, and data about specific manufacturing equipment that built a product.

In addition, highly specialized information can be readily accessible to important stakeholders from many sectors that are involved in the business process. This technology enables organizations to operate without friction in a single environment and greatly improves their ability to manage their resources and expansion. SAP Leonardo allows the integration of the SAP cloud blockchain with the rest of an SAP ERP system to further utilize it for numerous purposes like managing mobile devices, tracking shipments, and wireless security networks.

What is the difference between blockchain and ERP?

You are also familiar with the basic concepts of blockchain. When defining ERP, it is suitable to say that ERP or enterprise resource planning is essentially software businesses use to manage various business tasks, including compliance, risk management, project management, supply chain management, planning, performance analysis, and much more.

ERP technology particularly enhances database management systems, whereas blockchain systems make use of a scalable database that facilitates purpose, stage, and verify applications in real time. ERP operates with a single data modification system. Blockchain also has authority over a singular data table that millions of people share online. The key difference and in what way blockchain is beneficial for ERPs are described briefly in the table.

ERP
Blockchain
Mapping out entire production processes is tough and might decrease efficiency in certain cases.
Blockchain helps enterprises to track supply chain processes in real time with full transparency across each stage.
ERP model applies pre-defined functionality and does not offer flexibility to companies who want to change a certain module.
Blockchain architectures such as R3 Corda, Enterprise Ethereum Alliance, and Hyperledger offer architecture customization as per your business requirements.
ERP systems do not contain smart contracts functionality for processes and payments.
Blockchain smart contracts are built with pre-defined rules and initiate themselves automatically to verify business transactions and trading processes.
Regular maintenance of ERP systems comes with high associated costs.
With real-time analysis and data tracking in Blockchain ERP environments, enterprises can prevent disruptions beforehand.

Blockchain Integration with SAP Applications: Use Cases 

By incorporating blockchain technology into SAP applications, the process of adoption is hastened. Let's look at some actual use situations where SAP can be really useful.

Wireless Network for Security

It's crucial to shield a company's network from illegal access, which is where the wireless device security network comes in. In this approach, blockchain controls an IMEIs blacklist of devices. To ensure that no infected or blocked device is able to access protected networks, the devices are subsequently sent to all mobile network operators. This blockchain technology is under the proof-of-concept stage, which means it will get functional soon after passing the feasibility and consensus pipeline.

Autonomous Province

Bolzano, a small province of South Tyrol in Italy, has adopted blockchain technology as part of its "Agenda Digitale Italiana" effort, which aims to transform its information system. The city of Bolzano utilized a blockchain-based app in July 2017 to improve the efficiency of both officials and locals visiting local authorities. The government of Bolzano replaced the tiresome manual scanning of papers, allowing offices to keep a digitally approved copy on a database that was distributed and accessible to any authorized employee remotely. It was all made possible with blockchain.

Traceability of Food Supply Chain

Blockchain is perfectly positioned to be used in the food and beverage supply chain, and Walmart established itself as an early user in 2019. With blockchain-based tracking and tracing capabilities, Walmart has improved its capacity for action when contaminated produce enters the market.

CAMELOT

The CAMELOT lab is leveraging blockchain to protect mobile devices from security threats or dangers. With Blockchain usage, they properly register and validate each device on the network. It is also possible to create an international mobile equipment identity using the SAP Leonardo.

Authentication of Drug Items

Reducing the number of fake drugs that reach the market is one of the biggest challenges faced by pharmaceutical businesses. For this pharmaceutical industry line's authentication issue, SAP has unveiled a brand-new blockchain solution. Using a new public cloud platform: Information Collaboration Hub for Life Sciences, trading partners in the supply chain, can collaborate more easily. This, in turn, enables drug wholesalers to verify pharmaceutical shipments. 

Blockchain's Importance To SAP

It can be confidently anticipated that over the next five years, blockchain technology will become a crucial component of the business model, especially in the context of the cloud service provider. In order to handle issues like the external economic pressure on firms to adapt and restructure their supply networks so that suppliers cooperate more closely, blockchain technology has shown to be helpful. The technology also takes into account the challenges based on environmental issues like carbon footprints and the usage of different materials. CB Insights' report on the State of Blockchain reported in 20121 that funding for blockchain startups increased by 713%. This emerging trend will produce top blockchain development companies of the future.

Numerous advantages of SAP Blockchain Technology To Revolutionize Your Business

The following factors explain why SAP is essential for blockchain.

Accelerated Operations

Even in multiparty contexts, the technology of SAP blockchain speeds up corporate operations. This technology facilitates quicker transactions during normal business hours.

Fewer Obstacles

SAP Blockchain is a real-time peer-to-peer technology. It gets rid of intermediaries from the process, thus accelerating the process to get successful results within a given time frame.

Transparency

All reputable and respected professionals have access to crucial blockchain information. This enables them to read confidential information, review it with others, and share consent.

Protected Platform

This technique can safeguard sensitive corporate data. As a result, companies do not need to worry about something being hacked or used inappropriately by an outsider.

Automation

The fact that you can program the blockchain permits automatic operations to initiate events, payments, and other actions as per your business needs.

Future Outlook for SAP Blockchain

By 2024, IDC predicts that worldwide blockchain investments will increase by 50% and reach around $19 billion. Companies will be able to develop, execute, and monitor secure processes with less IT involvement in the future. This will be made possible by combining blockchain technology with no-code business development tools. The team dedicated to blockchain research at SAP Innovation Center investigates privacy-enhancing solutions in partnership with SAP Security Research to protect shared data in a distributed ledger while facilitating the evaluation of insights.

The SAP Innovation Center is also investigating the potential enterprise use cases for public blockchain technology, such as embedded finance on the blockchain.

Seeking an advantageous SAP Blockchain Technology solution?

Need assistance in building a beneficial and comprehensive blockchain solution for your company? Check out this list of Best blockchain developers in 2022. These developers handle the prototyping, realization, testing, consulting, and successful execution of blockchain-based business solutions using.

Conclusion

SAP has a real possibility to become a prominent leader in the adoption of solutions based on blockchain to address current business problems. The distributed blockchain database structure has numerous industrial applications, such as storing a wide variety of data in both public and private sectors, including company-wide private blockchain-based databases. Integration of blockchain with the ERP sector is redefining how both public and commercial companies seek to increase efficiency.

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WRITTEN BY
David Malan
Account Manager
Techreviewer
A specialist in the field of market analysis in such areas as software development, web applications, mobile applications and the selection of potential vendors. Creator of analytical articles that have been praised by their readers. Highly qualified author and compiler of companies ratings.
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SAP Blockchain: How Does It Function