SAP Blockchain: Overview and Benefits

  • Blockchain
  • 31.03.2023 01:40 pm

SAP is one of the world's foremost providers of enterprise resource planning (ERP) and business process management technology to help companies facilitate more efficient business workflows and more effective data management processes.

SAP applications help centralize data management by providing a single source of truth for data and better insights for more comprehensive across the entire enterprise. With SAP, companies are able to enhance system and employee productivity, automate workflows, improve operational efficiency, and increase profitability in the long run.

How Are Blockchain and SAP Connected?

SAP provides blockchain technology to connect SAP databases to enterprise blockchain platforms, ultimately improving collaboration and interoperability between systems, modules, applications, and blockchain networks.

Instead of creating a separate SAP-based blockchain network, SAP focuses on providing the tools needed for companies to integrate their current SAP platform with already existing blockchain platforms.

“SAP, along with a few other organizations, is leading the way into ERP-integrated blockchain solutions. Innovation happening right now will change the way we look at our supply chains, food/agriculture safety, pharmaceutical development, banking/finance, as well as other critical systems.” - JP Lexa, Managing Partner, COO, Surety Systems

What is Blockchain Technology?

Blockchain technology is a technological database mechanism that stores data in blocks that are linked together in a chain. It keeps organization chronologically consistent and allows information to be shared more transparently throughout a network of businesses.

Blockchain services help companies prevent unauthorized financial transactions with a decentralized recording system in which each transaction must be approved by both parties before financial information is automatically updated in their respective ledgers. A blockchain network can also be used to create a secure, unalterable ledger to more efficiently and securely track orders, manage payments, and update accounts.

Blockchain platforms offers a few main features to help organizations keep better track of transactions and improve overall data transparency:

●       Immutable shared ledgers for enhanced visibility and cohesion for business transactions

●       Established rules for participant consent to record financial transactions

●       Decentralized networks to maintain balanced system controls

The Big Four Blockchain Networks

There are four main types of blockchain networks: semi-private, private, public, and consortium. Here's a closer look at each different network:

Semi-Private Blockchain

A semi-private blockchain is controlled by a single company, and access to transaction records is only granted to users that meet the established criteria. These blockchains are considered "permissioned" because they require the enablement of specific permissions for users to access certain transaction data or records within the business network. These are most often used in government and business-to-business transaction networks.

Private Blockchain

Private blockchains are also controlled by a single company, but they are completely centralized within the business network. A private blockchain platform controls who has access to specific records, how transactions are submitted, and who can participate in the consensus process. With its centralized nature, private blockchains are often used as test environments rather than actual network production.

Public Blockchain

Public blockchain networks, like Ethereum and Bitcoin, are considered "permissionless", meaning that all transactions within the network are available to the public. With public networks, anyone can access the blockchain, participate in the consensus process, contribute transactions to the record, and remain anonymous in doing so.

Consortium Blockchain

As the most widely-accepted blockchain models, consortium blockchains not only help control consensus processes by outlining pre-selected groups, but they also offer both public and restricted controls for blockchain access. These blockchains are "permissioned", and business users have to be granted access to the network to be able to view, read, or submit transactions.

Key Benefits of Blockchain Solutions

●       Improved data transparency: A blockchain solution improves data transparency by not only limiting data alteration capabilities, but also allowing all participants to view information within the network. Network data is also translated into a hash code made of different numbers and letters that can only be accessed if users have the proper data key. This ensures that data stays in the right hands and is only accessed with proper permissions, like data keys and codes.

●       Better security: Blockchain systems use consensus, cryptography, and decentralization to improve the level of security within a company's software systems. With blockchain, there is no single point of failure and single users cannot change records without proper approval, making it nearly impossible to tamper with digital transactions.

●       Increased operational efficiency: Enterprise blockchain solutions place a greater emphasis on transparent data and better contract management processes to improve the efficiency of business-to-business transactions. Blockchain also helps reduce the risk of operational bottlenecks, further enhancing the speed and efficiency of a company's transactions and recording processes.

●       Faster, more traceable business processes: Because transaction records in blockchains are organized chronologically and the information included in those records cannot be altered, companies can track and trace items through an entire organization, including even the most complex supply chain networks. Blockchain framework also leverages transparent data and distributed ledger technology to speed up auditing processes and provide quicker return on investment (ROI).

Overview of Blockchain in SAP

All the blockchain services developed in SAP are centered around the maintenance of critical business values, including data integrity, blockchain use cases, and more. Here are a few of the main blockchain services offered by SAP:

SAP Leonardo Blockchain

The SAP Cloud Platform blockchain service has the ability to seamlessly integrate with SAP Leonardo, giving SAP users a new way to combine their blockchain with other key technologies, such as the Internet of Things.

The SAP Leonardo blockchain technology offers a front-end for the Hyperledger fabric, which makes both configuring and managing blockchain databases easier for users. Hyperledger fabric is an open-source, multi-project distributed ledger platform that allows users to improve interoperability between cross-industry blockchain technologies and support more efficient business management through quicker transactions and better control.

With SAP Leonardo blockchain applications, enterprises can not only quickly access and leverage Hyperledger fabric functionality, but they can also easily integrate blockchain tools with other SAP cloud services, including SAP Cloud HR and Cloud CRM. The SAP Leonardo blockchain tools are used to connect Hyperledger fabric networks to SAP applications through the SAP Cloud Platform, simplifying interoperability for users.

Blockchain SAP HANA

SAP Cloud Platform blockchain allows users to leverage blockchain technology to extend application functionality and build a strong foundation for adding distributed ledger technology to their pre-existing SAP solutions.

SAP HANA blockchain technology connects SAP HANA databases to any supported enterprise blockchain network by establishing a link between a cloud service within the SAP Cloud Platform and SAP HANA. The establishment of this link between technologies requires two main technological components to function properly:

●       SAP HANA blockchain service: A cloud service deployed with SAP Leonardo blockchain for more advanced cloud connection.

●       SAP HANA blockchain adapter: A Serial Digital Interface (SDI) connector deployed in conjunction with SAP HANA.

These core components work together to communicate with the SAP blockchain service, ensure proper replication of transactions into SAP HANA, and easily integrate SAP technology with other blockchain platforms. 

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