As I was preparing this story about the research and work done by SAP in blockchain technology, I saw a visceral story of Phil Fersht about the false research. Fersht said:
This level of very thin "knowledge" in this sector has reached unbearable levels. So many people are just repeating parrot the "thought leadership" of others and claiming to have real depth and knowledge of complex domain areas such as RPA, Machine Learning, Cognitive Calculation, etc.
When we have reached the point where the "researchers" do not even bother to mask an obvious plagiarism, I begin to despair about what will come next in this era of #fakenews. We call it simply #fakeresearch? Does anyone worry more or are we simply living in a time of replicated content, fabricated expertise and recycled crap? We are at the peak of this advertising bubble and I will be happy to see it burst very soon … this type of behavior must disappear, or we will not have much "industry" in a few months …
Equally worrying, at least for SAP, was the extent to which companies have acquired the clamor around blockchain technologies. Regular readers will know that we have been very skeptical about the blockchain as the last technology drug preferred by the media and marketers.
Gil Perez, SAP Senior Vice President of Products and innovations, Head of Digital Customer Initiatives is equally concerned., He showed me the results of two surveys conducted by SAP in April (250 clients) and September 2018 (350 clients). The key question was: "How do you see blockchain? & # 39; with options to answer as follows:
- Big chance
- Lightweight opportunity
- A threat
Surprisingly, in the April poll, 92% saw the blockchain as a big or light chance, but in September that number had risen to an incredible 99.5%. However, in the April poll, only 3% reported blockchain in production environments. The results of this kind are the dream stuff for marketers, but as Perez said:
We have a situation we have to face. At this time the blockchain is seen as the magic potion to solve every problem and I am very worried about it. What we have to do and what we are doing is educating people that blockchain is not the answer to everything but that there are very specific use cases in which blockchain makes sense. We are still at the start of the adoption phase, we have an overhype and when we overhype we call ourselves. We have to bring the customers back to reality, because if we do not, they end up disappointing and we end up with a black eye on the customer, on SAP and on the technology.
84% said they were active and could hold discussions, research, try POCs. This is a very high number, so we know that people are wetting their feet and undoubtedly some will be disappointed, but the point here is that there is a very high level of activity from our point of view.
When we came back and asked about live or production, what we found was not what we did live or production, but rather a sort of internal POC, but then some people see it live.
Phew: I was happy to hear that reality test, but asked me whether buyers really understand either the technology as an enabling factor or are simply making assumptions based on marketing. To this extent, I find it hard to understand why the IoT and the supply chain (the number one use case cited by respondents) should be a good idea for the blockchain as much of the impetus that it is behind these activities, however, it is machine by machine. So, why should you need an "immutable ledger" and in particular supply chains managed by the masters of channels?
Blockchain for DSCSA
Perez provides an example in pharmaceutical products in which, in the United States, the FDA has mandated the Drug Supply Chain Security Act (DSCSA) in 2013. The TL; DR on this says:
Title II of the DQSA, the Drug Supply Chain Safety Act (DSCSA), outlines measures to build an interoperable electronic system to identify and track down certain prescription drugs as they are deployed in the United States. This will improve the ability of the FDA to help protect consumers from exposure to drugs that may be counterfeit, stolen, contaminated or otherwise harmful. The system will also improve the detection and removal of potentially dangerous drugs from the drug supply chain to protect US consumers.
In addition, DSCSA orders the FDA to establish national licensing standards for wholesale distributors and third party logistics service providers, and requires these entities to report licenses and other information to the FDA each year.
In Europe, similar regulations existed, almost identical, financed by a central authority for the implementation of the regulations. In the United States the FDA has left it to pharmaceutical companies to understand how it works. I have been told that this is a common way for the United States to establish regulation. This is a fundamental difference and has created a situation in which none of the pharmaceutical companies was willing to agree. Perez again:
In Europe, no problem, each of the companies had to pay, they created a central database managed by an NGO. In the United States they fought over who would manage and run and as competitors, they could not. Blockchain was successful in this case as a conceptual proof because in this case there was a way to overcome the problem of trust. Each company has its own node in which it has access to its data but not to their competitors although it is stored in a central repository.
SAP has undertaken several pilot projects focused on "salable returns" in which there must be a clear control trail for narcotics that must be returned for one reason or another. An example would be that a forklift truck turned upside down and a pallet was broken. The second pilot project involved 15 suppliers and processed over one billion transactions. The next step will be the launch of a product in the first quarter of 2019 as a private blockchain managed by SAP, based on authorizations. How does this process start?
The birth certificate of a drug is the creation of a serial number on a label for the bottle or package. All of these companies use SAP's Advanced Track and Trace for pharmaceuticals. So what we did is immediately after the serial number was created, we are writing about the blockchain. We offer customers the ability to run the blockchain node by themselves or the blockchain platform of SAP.
Our first project was with Hyperledger but it was too expensive and it was too slow. For this second we opted for the MultiChain which can be considered less rich in functionality but much more efficient. He has no intelligent contracts or the bells and whistles of others. It is ready for esnterprise and can be trusted a lot because it has been in production for more than 10 years. Other use cases may want to use other blockchains.
According to SAP, there are many examples in the supply chain where companies want to cooperate but do not necessarily want to give up access to their data. And so from this point of view, blockchain can be the gateway to digitization within those supply chains where for example manual transactions and reconciliations are common.
The question then comes – but which blockchain? Perez agrees that during this period of blockchain technology expansion there will be many blockchains, some of which will emerge as "standards" in much the same way as evolved databases. But for now, Perez believes the next three years will be what SAP calls "It was the blockchain of permits." For this reason, SAP has designed its blockchain services to operate independently of the blockchain technology choice or business processes in an attempt to minimize re-processing as the blockchain market goes out.
There are already efforts for interoperability, but I would say that it is quite new at the moment. In two or three years I think companies that have built their networks will see that connection networks will determine an impact multiplier and look for interoperability. In five or seven years, I believe we will have standards. But today? It is early.
As we closed our conversation, Perez mentioned projects relating to US customs and the introduction of blockchains for review. We could have a long conversation on this last because, in my experience, the concept of control as practiced by global companies is out of touch with what the stakeholders believe. Even so, it will be interesting to see how blockchain ideas shake in this and other areas.
It is interesting to see a seller who carefully examines practical use cases and assesses the quality of what people are telling them about a much-publicized technology. In this sense, it is nice to see SAP offer practical and practical examples that make the best use of available technology rather than settling on a single blockchain. Its newly formed blockchain consortia for the pharmaceutical, CPG and high-tech sectors adopt different approaches to different problems: everything goes well. More precisely, SAP is aware of the dangers of early adoption and also recognizes that it is a rapidly evolving market.
Image credit – SAP on YouTube
Disclosure – SAP is a premier partner and covers most of the expenses and journeys of the author to attend SAP TechEd Barcelona