Blockchain as a revolution for familiar business processes: scenarios from SAP
Now the word "blockchain" sounds from every iron - in the online media, on TV, in all tapes of social networks. How should I take the blockchain, so as not to succumb to the "HYIP"?
The first category of blockchain mentions is just marketing. Trendy new term is used to sell all that is in stock. Do not be confused by the excitement - this is a completely typical situation for any new technologies to enter the market.
The second category of blockchain mentions is business concepts. In this case, the discussion participants talk about peer-to-peer networks, peer-to-peer relations - between a person and a computer, a person and a person, or a computer and a computer without a single monitoring center.
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Finally, the third category is the technological aspects associated with cryptographic protection and a distributed system built on peer-to-peer networks.
Until now, ordinary readers and some authors on the Internet periodically confuse the blockchain and, for example, Bitcoin or cryptocurrency. Therefore, just in case, we immediately discuss the terms.
Bitcoin is one of thousands of cryptocurrencies, the same as “ether” (based on Ethereum) and many others. Cryptocurrencies use blockchain technology, encryption methods, and so far operate independently of financial organizations and central banks (but soon things can change).
Blockchain is a protocol. It determines how records are transmitted that contain information about something — documents, currency, transfers, property, etc., as well as the process of transferring data to a decentralized network using encryption.
There is a good example of how distributed registry technology works. The person on the slide below is some kind of certification center. We are constantly confronted with such certification centers in life. For example, if I want to transfer money to my colleague on a bank card, I need a bank that will verify my identity, the availability of the required amount in my accounts and the right to transfer it to another person. The same bank (or some other) certifies the identity of the person who receives the money on his card.
Another example is the “My Documents” center, where we come to get a passport, certificates, etc. It also acts as a certification center for our identity and is a node for confirming information. There are many such units - tax, pension funds, banks, etc. What distinguishes them is certain rules, regulations, and lengthy internal processes for the transfer of information. And as a rule, such organizations store data centrally.
Another good example is how blockchain could change the source of stories for Hollywood blockbusters. In a typical action movie, the main character needs to make changes to some kind of database in order to save the world. He will have to get to the protected center with guards and dogs and make changes to the stored data. Why it happens? Because for typical Hollywood templates all information is stored in one place.
In the film “Mission Impossible”, the hero Tom Cruise needs to change the employee’s profile in the system. Information about these profiles is stored in a terrible place where it is not easy to get. But he is a superhero - his task is to pull out one card and exchange it for another, albeit with terrible difficulties.
Now imagine the following situation - that this data is stored in two or three such centers. Then you have to call Stallone or Jackie Chan for help. And if this data is duplicated in tens of thousands of nodes? All superheroes will be upset and will not be able to help: “they have a distributed registry there, we have nothing to do here”.
The blockchain as a technology at a basic level does not provide that you can pull one card out of the system, insert another one and thus compromise the information. In peer-to-peer networks, all participants have the same rights. Between them, in the center of the network may be a technology platform, a smartphone or other inanimate mechanism that does not make decisions.
What does the blockchain do? It increases security and solves problems with inefficient intermediaries. How he does it? Using technology information can be transmitted directly to the network, and to compromise it, more than half of the participants must vote incorrectly. That is, Tom Cruise and his friends would have to hack five thousand and one node in a network of ten thousand nodes to replace the information. Do not forget that the information is also cryptographically protected, that is, hacking into nodes with the available technologies will not be easy.
How blockchain changes the traditional world
Today, a large number of participants are involved in business processes and workflows, who need fast, transparent and efficient relationships - despite the fact that these participants do not always trust each other. Therefore, the blockchain has another great advantage - it is a trusted workflow. There is no single certification center in blockchain networks, information is stored in a multitude of nodes, which provides transparency and auditing for supervisory authorities.
How does it technically work? Suppose a person comes to a government employee who needs a certificate from the Pension Fund of Russia or an extract from the house book. Now, to obtain documents, a citizen must contact the office of the pension fund or the office of “My Documents”. It takes some time to process or receive documents. If we imagine that information about data or a person is stored in a distributed network, where part of the information is known to the employer, another part is state bodies, another part is private individuals, then using this blockchain will not take as much time as it takes to spend on getting help now. Information will be available to all members of the network almost instantly.
What are the disadvantages of the blockchain? Restrictions associated with its own advantages. Information is stored in all nodes of the network, but it also means redundant data storage and the need for additional capacity. Therefore, we need to better consider which scenarios are applicable for the blockchain.
SAP and blockchain
SAP has not remained aloof from the new technology. We are working on standards for the use of blockchain, as well as on pilot projects with some of our partners. This year, SAP has become a premium member of the Hyperledger network. The company also became part of the Blockchain Research Institute in Toronto, Ontario about the blockchain research institute. Together with other technology companies, we are actively working on the development of new standards and formats. Participation in the process is very important because blockchain is a young, ever-changing technology. If the first versions of blockchain networks had significant limitations, now they work safer and faster.
In the SAP portfolio, the blockchain is in the SAP Leonardo platform.
What is SAP Leonardo? This is a platform that includes many blocks of components - machine learning, Internet of things, Big Data, Research Data, analytics, etc. The client or developer can build the necessary system from these blocks.
Why did SAP decide to place the blockchain in this particular environment? We firmly believe that these elements together will bring customers more benefits than individually. In SAP Leonardo, the blockchain will be a continuation of other services.
SAP Leonardo works on a single technological platform - it uses the in-memory data storage system SAP HANA, the Hadoop distributed storage system. For more than 40 years, SAP has created an infrastructure for business clients that is available on the SAP Cloud Platform, and the blockchain is the “cherry on the cake.”
Our set of technological solutions allows you to quickly and without significant financial and labor costs to create prototypes of solutions that can be used and integrated into the ecosystem with SAP products, as well as into autonomous systems, in your own scenarios and customer networks.
The important point is that you can combine the distributed registry and the Internet of things. What is a Smart Contract is a contract that is stored on the blockchain network and is configured to fulfill certain conditions. Under these conditions, the contract is triggered. However, how to make sure that the specified conditions are really met? There are two options: confirmation from a person or from a sensor, a car or some kind of trigger. Of course, the second option provides the best quality of business processes. For example, such a mechanic allows you to track the receipt of goods on the store shelf and the implementation of the transaction - the Internet of Things with the help of sensors confirms the receipt of goods, and the information is integrated into the blockchain network.
Blockchain essentially becomes the basis for creating transactional applications; it provides transparency, the ability to peer-to-peer communications within companies or between different organizations.
Blocks with different services and technologies, including the blockchain, are available inside the cockpit in the SAP Cloud Platform - the marketplace for applications. This list is quite large - from machine learning systems to customer segmentation services and marketing campaigns.
SAP scripts to use blockchain in business processes
The scenarios that SAP experts are working on together with partners are aimed at solving 6 main tasks:
• Reduction in the number of intermediaries
• Cheaper processes
• Ensuring transparency
• Increased efficiency
• increased security
• Growth of automation level
There are scenarios of both cross-industrial and industrial. For example, scenarios related to operations with securities, letters of credit, lending to agricultural enterprises, etc. are suitable for the financial industry. Below we will talk about several pilot projects.
Example one is the optimization of international interbank payments. Canadian ATB Financials and German Reisebank conducted a test payment using the blockchain and the Ripple network. Each bank used the SAP Payment Management system to optimize payments, the process was carried out using the SAP Cloud Platform. As a result, the transaction was carried out in a few seconds instead of several days. Now for bank payments you need a large number of intermediaries, you have to keep track of many factors. This example shows how the blockchain can significantly reduce labor costs.
Issuing bond issues is a difficult process that is often done manually by financial institutions. When communicating, mainly paper documents are used - contracts, confirmations and statements. Deloitte has used the SAP Loans Management solution based on the SAP Cloud Platform, integrated with a distributed registry (Ethereum Blockchain @ Deloitte). As a result, securities transactions now take only one day - previously it took 2-3 days. In this case, banks, borrowers, and investors become the beneficiaries of using the blockchain.
The following example is a pilot project in the field of Know Your Client. There is a common problem - every time we come to an organization, we have to go through an identification cycle - to present a passport or other documents, sometimes even in different departments of the same organization. How to simplify this process?
Personal data can be stored in the blockchain. The pilot application works as follows: the user is authorized in the portal based on SAP UI5 and gets access to the application on the blockchain. Client data is stored in the SAP CRM system. Document data is stored in SAP HCP Documents, the links between customer records and their documents are stored in DLT. As a result, the identification process, after the initial one, is significantly accelerated and simplified. The scenario also implies better risk management and reduced fraud or money laundering threats. Of course, the introduction of blockchain also implies an increase in customer satisfaction. Now the main problem is the shortcomings of the legislation, while technical limitations no longer exist.
Another scenario was implemented in the public sector - in the autonomous region of South Tyrol in Italy. The government uses a prototype solution to simplify manual authentication by employees using SAP services for the public sector — now they can do it through the application with one click.
SAP is open to collaborating, developing new scenarios or pilot projects. If you want to offer your project or idea for discussion with SAP experts - fill in the questionnaire on the website in a special section about blockchains.
The first category of blockchain mentions is just marketing. Trendy new term is used to sell all that is in stock. Do not be confused by the excitement - this is a completely typical situation for any new technologies to enter the market.
The second category of blockchain mentions is business concepts. In this case, the discussion participants talk about peer-to-peer networks, peer-to-peer relations - between a person and a computer, a person and a person, or a computer and a computer without a single monitoring center.
')
Finally, the third category is the technological aspects associated with cryptographic protection and a distributed system built on peer-to-peer networks.
Until now, ordinary readers and some authors on the Internet periodically confuse the blockchain and, for example, Bitcoin or cryptocurrency. Therefore, just in case, we immediately discuss the terms.
Bitcoin is one of thousands of cryptocurrencies, the same as “ether” (based on Ethereum) and many others. Cryptocurrencies use blockchain technology, encryption methods, and so far operate independently of financial organizations and central banks (but soon things can change).
Blockchain is a protocol. It determines how records are transmitted that contain information about something — documents, currency, transfers, property, etc., as well as the process of transferring data to a decentralized network using encryption.
There is a good example of how distributed registry technology works. The person on the slide below is some kind of certification center. We are constantly confronted with such certification centers in life. For example, if I want to transfer money to my colleague on a bank card, I need a bank that will verify my identity, the availability of the required amount in my accounts and the right to transfer it to another person. The same bank (or some other) certifies the identity of the person who receives the money on his card.
Another example is the “My Documents” center, where we come to get a passport, certificates, etc. It also acts as a certification center for our identity and is a node for confirming information. There are many such units - tax, pension funds, banks, etc. What distinguishes them is certain rules, regulations, and lengthy internal processes for the transfer of information. And as a rule, such organizations store data centrally.
Another good example is how blockchain could change the source of stories for Hollywood blockbusters. In a typical action movie, the main character needs to make changes to some kind of database in order to save the world. He will have to get to the protected center with guards and dogs and make changes to the stored data. Why it happens? Because for typical Hollywood templates all information is stored in one place.
In the film “Mission Impossible”, the hero Tom Cruise needs to change the employee’s profile in the system. Information about these profiles is stored in a terrible place where it is not easy to get. But he is a superhero - his task is to pull out one card and exchange it for another, albeit with terrible difficulties.
Now imagine the following situation - that this data is stored in two or three such centers. Then you have to call Stallone or Jackie Chan for help. And if this data is duplicated in tens of thousands of nodes? All superheroes will be upset and will not be able to help: “they have a distributed registry there, we have nothing to do here”.
The blockchain as a technology at a basic level does not provide that you can pull one card out of the system, insert another one and thus compromise the information. In peer-to-peer networks, all participants have the same rights. Between them, in the center of the network may be a technology platform, a smartphone or other inanimate mechanism that does not make decisions.
What does the blockchain do? It increases security and solves problems with inefficient intermediaries. How he does it? Using technology information can be transmitted directly to the network, and to compromise it, more than half of the participants must vote incorrectly. That is, Tom Cruise and his friends would have to hack five thousand and one node in a network of ten thousand nodes to replace the information. Do not forget that the information is also cryptographically protected, that is, hacking into nodes with the available technologies will not be easy.
How blockchain changes the traditional world
Today, a large number of participants are involved in business processes and workflows, who need fast, transparent and efficient relationships - despite the fact that these participants do not always trust each other. Therefore, the blockchain has another great advantage - it is a trusted workflow. There is no single certification center in blockchain networks, information is stored in a multitude of nodes, which provides transparency and auditing for supervisory authorities.
How does it technically work? Suppose a person comes to a government employee who needs a certificate from the Pension Fund of Russia or an extract from the house book. Now, to obtain documents, a citizen must contact the office of the pension fund or the office of “My Documents”. It takes some time to process or receive documents. If we imagine that information about data or a person is stored in a distributed network, where part of the information is known to the employer, another part is state bodies, another part is private individuals, then using this blockchain will not take as much time as it takes to spend on getting help now. Information will be available to all members of the network almost instantly.
What are the disadvantages of the blockchain? Restrictions associated with its own advantages. Information is stored in all nodes of the network, but it also means redundant data storage and the need for additional capacity. Therefore, we need to better consider which scenarios are applicable for the blockchain.
SAP and blockchain
SAP has not remained aloof from the new technology. We are working on standards for the use of blockchain, as well as on pilot projects with some of our partners. This year, SAP has become a premium member of the Hyperledger network. The company also became part of the Blockchain Research Institute in Toronto, Ontario about the blockchain research institute. Together with other technology companies, we are actively working on the development of new standards and formats. Participation in the process is very important because blockchain is a young, ever-changing technology. If the first versions of blockchain networks had significant limitations, now they work safer and faster.
In the SAP portfolio, the blockchain is in the SAP Leonardo platform.
What is SAP Leonardo? This is a platform that includes many blocks of components - machine learning, Internet of things, Big Data, Research Data, analytics, etc. The client or developer can build the necessary system from these blocks.
Why did SAP decide to place the blockchain in this particular environment? We firmly believe that these elements together will bring customers more benefits than individually. In SAP Leonardo, the blockchain will be a continuation of other services.
SAP Leonardo works on a single technological platform - it uses the in-memory data storage system SAP HANA, the Hadoop distributed storage system. For more than 40 years, SAP has created an infrastructure for business clients that is available on the SAP Cloud Platform, and the blockchain is the “cherry on the cake.”
Our set of technological solutions allows you to quickly and without significant financial and labor costs to create prototypes of solutions that can be used and integrated into the ecosystem with SAP products, as well as into autonomous systems, in your own scenarios and customer networks.
The important point is that you can combine the distributed registry and the Internet of things. What is a Smart Contract is a contract that is stored on the blockchain network and is configured to fulfill certain conditions. Under these conditions, the contract is triggered. However, how to make sure that the specified conditions are really met? There are two options: confirmation from a person or from a sensor, a car or some kind of trigger. Of course, the second option provides the best quality of business processes. For example, such a mechanic allows you to track the receipt of goods on the store shelf and the implementation of the transaction - the Internet of Things with the help of sensors confirms the receipt of goods, and the information is integrated into the blockchain network.
Blockchain essentially becomes the basis for creating transactional applications; it provides transparency, the ability to peer-to-peer communications within companies or between different organizations.
Blocks with different services and technologies, including the blockchain, are available inside the cockpit in the SAP Cloud Platform - the marketplace for applications. This list is quite large - from machine learning systems to customer segmentation services and marketing campaigns.
SAP scripts to use blockchain in business processes
The scenarios that SAP experts are working on together with partners are aimed at solving 6 main tasks:
• Reduction in the number of intermediaries
• Cheaper processes
• Ensuring transparency
• Increased efficiency
• increased security
• Growth of automation level
There are scenarios of both cross-industrial and industrial. For example, scenarios related to operations with securities, letters of credit, lending to agricultural enterprises, etc. are suitable for the financial industry. Below we will talk about several pilot projects.
Example one is the optimization of international interbank payments. Canadian ATB Financials and German Reisebank conducted a test payment using the blockchain and the Ripple network. Each bank used the SAP Payment Management system to optimize payments, the process was carried out using the SAP Cloud Platform. As a result, the transaction was carried out in a few seconds instead of several days. Now for bank payments you need a large number of intermediaries, you have to keep track of many factors. This example shows how the blockchain can significantly reduce labor costs.
Issuing bond issues is a difficult process that is often done manually by financial institutions. When communicating, mainly paper documents are used - contracts, confirmations and statements. Deloitte has used the SAP Loans Management solution based on the SAP Cloud Platform, integrated with a distributed registry (Ethereum Blockchain @ Deloitte). As a result, securities transactions now take only one day - previously it took 2-3 days. In this case, banks, borrowers, and investors become the beneficiaries of using the blockchain.
The following example is a pilot project in the field of Know Your Client. There is a common problem - every time we come to an organization, we have to go through an identification cycle - to present a passport or other documents, sometimes even in different departments of the same organization. How to simplify this process?
Personal data can be stored in the blockchain. The pilot application works as follows: the user is authorized in the portal based on SAP UI5 and gets access to the application on the blockchain. Client data is stored in the SAP CRM system. Document data is stored in SAP HCP Documents, the links between customer records and their documents are stored in DLT. As a result, the identification process, after the initial one, is significantly accelerated and simplified. The scenario also implies better risk management and reduced fraud or money laundering threats. Of course, the introduction of blockchain also implies an increase in customer satisfaction. Now the main problem is the shortcomings of the legislation, while technical limitations no longer exist.
Another scenario was implemented in the public sector - in the autonomous region of South Tyrol in Italy. The government uses a prototype solution to simplify manual authentication by employees using SAP services for the public sector — now they can do it through the application with one click.
SAP is open to collaborating, developing new scenarios or pilot projects. If you want to offer your project or idea for discussion with SAP experts - fill in the questionnaire on the website in a special section about blockchains.
Source: https://habr.com/ru/post/336556/
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