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3 Use Cases for Blockchain in the Supply Chain

As companies evolve in the digital era, so too are their supply chain challenges. In many cases this means digitization of outdated processes, and blockchain technology is a key driver to facilitate digital transformation in the supply chain. As an immutable, distributed ledger, blockchain offers unprecedented levels of security and helps forge more trusting relationships between peers within a given network.

Based on 2018 SAPinsider data, nearly 1 in 5 companies are currently using blockchain. The findings from this study indicate that more and more businesses are expected to adopt this transformational technology.

Here are some examples of use cases of blockchain technology by organizations in various industries.

 

Smart Contracts

 

Smart contracts are an effective vehicle in fostering simple and secure transactions between a business and its suppliers. While a smart contract serves the same purpose as a real contract, it really isn’t a contract at all. Think of a smart contract as code, which stores, verifies, and self-executes rules. The terms of the agreement between a business and its supplier are entered into the smart contract. Once both parties verify that the terms of the agreement have been met, the contract is executed. The supplier receives payment and the business receives its goods. The smart contract will be stored on the blockchain for all of time without the threat of being tampered with by either party. This peer-to-peer (P2P) network from which blockchain is built on serves to distribute the power among peers, instead of a central intermediary.

 

Food Traceability

 

The food and beverage supply chain is well-positioned to leverage blockchain, and Walmart has cemented itself as an early adopter. The retail powerhouse plans to have its produce suppliers tracing their products using blockchain by the end of 2019. The initiative is in response to historic outbreaks of E. coli in romaine lettuce, as well as salmonella. With track-and-trace capabilities built on blockchain, Walmart will have strengthened its response capabilities when contaminated produce reaches the market. The customers will have a view into any given piece of produce from the farm to their dinner table. Walmart’s adoption of blockchain communicates a message of transparency to its customers; it shows that the company is moving beyond simply offering “everyday low prices.”


 

Drug Authentication

 

A major challenge faced by pharmaceutical companies is to reduce the number of counterfeit products entering the market. Companies that leverage anti-counterfeit labels on their goods provide customers with confirmation that the product is exactly what it claims to be. SAP has brought forth a new blockchain solution aimed at addressing the authentication issue plaguing the industry. A new public cloud system, called the Information Collaboration Hub for Life Sciences, has been designed to facilitate collaboration among supply chain trading partners, in turn enabling drug wholesalers to authenticate pharmaceutical shipments. The solution will help organizations systems to comply with the US Drug Supply Chain Security Act (DSCA).

Use cases in and outside of the supply chain are seemingly endless. A technology that was once most commonly associated with cryptocurrency has proven its true impact across industry landscapes. Blockchain is forging stronger supplier relationships, facilitating higher quality track-and-trace, and putting companies in a position to more safely serve their customers every day.

For more information on how to leverage blockchain technology in your organization, attend Financials 2019, March 19-21, in Las Vegas. Click here for more information and to register early to save $300.

If you have any questions or comments about this blog or blockchain, feel free to email the Digital Supply Chain Management team at gary.byrne@wispubs.comsahir.anand@wispubs.com and kevin.guiliano@wispubs.com. Follow us on Twitter: @SAPinsider, @sahiranand.




“Life is flux,” according to the Greek philosopher Heraclitus, and this well-known assertion that all things change applies just as readily to businesses, which must constantly adapt to changing user needs. The current push for digital transformation, for example, is centered on enabling the efficiency and flexibility required to instantly and effectively meet the changing needs and expectations of modern customers. SAPinsider is no different — meeting the needs of our audience is our guiding principle and change is a part of that.

To strengthen the value we bring to you and the rest of our 300,000-strong SAPinsider membership, based on your feedback, we have designed a new, more diverse content strategy for 2019. This comprehensive content strategy gives you practical and powerful new content while continuing to put you — the “insider” — first and striving to help you make smarter decisions and get the most out of your investment in SAP and its core systems. The key pillars of this strategy are the following:

  • Research: Over the course of 2019, SAPinsider plans to publish more than 30 research reports that will share trends and best practices found within the SAPinsider community. These will include benchmark reports on how organizations are adopting, implementing, and optimizing the cloud, SAP S/4HANA, SAP SuccessFactors solutions, digital supply chain technologies, customer engagement and experience, and much more. These reports and insights will serve as a foundation for our digital, print, and live content.
  • Events: SAPinsider will continue to create and deliver a unique brand of engaging events that cover strategies, case studies, and tips and tricks for our business and IT audiences. For example, our upcoming event in Las Vegas, March 19-21, brings together our Financials, HR, BI, HANA, GRC, and Administration audiences for a comprehensive educational and networking opportunity. We’ll be taking this event to Europe in the first half of the year, and we’ll also be introducing a brand-new event on moving to SAP S/4HANA.
  • SAPinsider Network TV: SAPinsider will be updating its delivery model and packaging of traditional digital products, featuring a new service known as SAPinsider Network TV. With SAPinsider Network TV, you will always have immediate access to the latest member-driven research findings, streamed directly to your web channel. iSN TV is your personal insider TV guide to accessing all of the upcoming SAPinsider webcast sessions scheduled in your channel with topics personalized to meet your needs. You will be able to see the top sessions from across the insider community and access your vault of on-demand video resources.
  • Daily blogs: On a daily basis, our research and editorial team will report on news and events related to SAP technologies and initiatives to keep you informed about what’s happening in the wider SAP community, and how it will affect your business.
  • Weekly newsletter: Each week, you will receive a newsletter like this one, which is the first edition, that offers insights gathered from our research, interviews, and interactions with the SAP community. These newsletters will not just summarize what’s going on — they will tell you what it means for you in a unique and insightful way.
  • Quarterly magazine: SAPinsider magazine will continue on a quarterly basis. All four editions will be published digitally and there will be two print editions timed for SAPPHIRE NOW and SAP TechEd. The magazine will have a new look and feel as well, with chapters dedicated to key coverage areas that include topics such as deployment and development, data and EIM, security and GRC, finance, HR, and analytics and intelligent technologies. Each chapter will feature content related to that coverage area, including an article based on SAPinsider research, case studies, news, insights, technical columns, and thought leadership from SAP and its partners. You will be able to access all of this rich content at SAPinsiderOnline.com.

The SAPinsider team is already hard at work increasing the value of our content and deepening our engagement with the SAP community. Change is indeed constant, and we will continue to adapt to meet your most pressing needs, so please send us your ideas and feedback as we begin this new phase in our journey. Rest assured that there is one thing that will not change at SAPinsider, however: our commitment to quality.

Thank you for your support, and we look forward to delivering the insights you need to succeed now and in the future.




SAP Rolls Out SAP S/4HANA-Based Subledger

Earlier in January, SAP announced its new SAP S/4HANA for financial products subledger. Aimed at handling the complex regulatory and reporting requirements for financial institutions, insurance companies, and fintech companies, the subledger uses a central data hub for information between operational and finance systems.

Regulatory changes like IFRS 9 and 17 have added new wrinkles to maintaining compliance, and operational data models between operations and finance have become increasingly fragmented. The new solution aims to ease those challenges via a multi-GAAP accounting engine that enhances accounting capabilities and centralizes rules for financial instruments and insurance contracts, paving the way for cost reductions and easier reconciliation.

“This solution supports sophisticated multi-GAAP valuation and accounting concepts,” Luka Mucic, CFO and member of the Executive Board of SAP SE, said in a press release. “SAP Fiori-based embedded analytics makes the solution a dynamic tool for the end user and takes it beyond a pure instrument for documentation to a powerful platform that generates data analysis to facilitate financial steering. These enhancements build on what we’ve already accomplished in our co-innovation project with Swiss Re, and we look forward to implementing this at a larger scale among our banking and insurance customers.”




The SAPinsider Financials and GRC conferences, scheduled for March 19-21, 2019, continue to evolve and expand. Just over the last week, we’ve added dozens of new sessions to the program, so make sure to take another look at the program and peruse the latest content.

Among the new sessions are in-depth product road maps from SAP, as well as information on product updates, migration advice, tips and tricks for optimization, and strategic deep dives to help you understand your place in the new digital economy. Here’s a quick glance at some of the new sessions that have been added to the program.

Financials:

A primer on Central Finance: Key intelligent enterprise capabilities

A single view for finance: Leverage the power of SAP S/4HANA and SAP Analytics Cloud to drive better business decisions and analysis for ERP, planning and consolidations

The definitive guide to SAP’s solutions for planning and analysis

The intelligent enterprise: Changing the world of finance with SAP Leonardo Machine Learning

How SAP supports the finance function of tomorrow: A down-to-earth look at the end-to-end finance process and how this translates into the SAP solution architecture

SAP S/4HANA group reporting: SAP’s next-generation consolidation solution

GRC:

GDPR a year later: What’s happening and how this will affect handling of personal data within our organizations

Panel Discussion: Focus on GRC in the intelligent enterprise – Customers speak out

Combating modern slavery with SAP solutions for GRC: More than compliance, it’s ethics!

Getting on the 12.0 bandwagon: An updated look at SAP Process Control and SAP Risk Management

Learn how machine learning is used in SAP Cloud Access Governance to enable better enterprise or business role definitions

Hands-On Lab: Creating and deploying business rules in SAP Process Control

To review the whole program, click here for Financials and click here for GRC. We look forward to seeing you in March!




7 Things AR Automation Can Do (That Your SAP System Can't)

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SAP Sets the Stage for New XM Frontier With Qualtrics Acquisition

SAP has taken a giant step forward in setting the stage for the future of the experience economy. Last week, SAP announced that it had completed its acquisition of Qualtrics International, the global pioneer of the experience management (XM) software category. Ryan Smith will continue to lead Qualtrics, which will retain its current leadership and operate within the Cloud Business Group at SAP. The acquisition combines Qualtrics’ experience data with SAP’s operational data, enabling customers to manage supply chains, networks, employees, and core processes better with a unique end-to-end experience and operational management system.

Customer experience appears to be a growing priority among SAP’s customers. According to SAP’s Q4 2018 Quarterly Statement, released Tuesday, Jan. 29, in the fourth quarter SAP C/4HANA customer experience solutions achieved triple-digit growth in cloud subscription revenue year over year. Segment revenue in Customer Experience was up 52% to €349 million year over year (up 50% at constant currencies). The Callidus acquisition is reflected in those segment numbers. SAP completed the acquisition of Callidus Software last April. Other recent acquisitions in the customer experience space include the acquisition of CoreSystems in 2018 and Gigya in 2017. SAP has significantly upped its customer experience game. Here is why the Qualtrics acquisition (and others) are important:

  • The Qualtrics acquisition seems to validate the importance of experience data.
    • Operational data tells you “what” is happening, but experience data can tell you “why” it is happening – an important insight today, when consumers have short attention spans and more choices than ever before.
  • Companies that can collect, manage, and act on experience data may gain a competitive edge.
  • Companies are still seeking a single version of the truth. SAP C/4HANA solutions serve a wide range of industries across both B2C and B2B and enable businesses to manage their entire front office: marketing, sales, commerce, service, customer data cloud — in real time, providing companies with a single view of their customer — across all channels.
  • Major global brands are moving forward with customer experience management — according to SAP’s Q4 reports, McLaren Group, National Geographic, Prada, Rubbermaid, and Dyson were among the companies that chose SAP C/4HANA solutions in the quarter.

In a November press release announcing the Qualtrics acquisition, SAP CEO Bill McDermott said SAP and Qualtrics represent a new paradigm, “similar to market-making shifts in personal operating systems, smart devices and social networks.” McDermott continued, “SAP already touches 77 percent of the world’s transactions. When you combine our operational data with Qualtrics’ experience data, we will accelerate the XM category with an end-to-end solution with immediate global scale. For Qualtrics, this introduces a dynamic new partner with the belief, passion and scale to bring experience management to millions of customers around the world.”

McDermott went on to say, “The combination of Qualtrics and SAP reaffirms experience management as the groundbreaking new frontier for the technology industry. SAP and Qualtrics are seizing this opportunity as like-minded innovators, united in mission, strategy and culture. We share the belief that every human voice holds value, every experience matters and that the best-run businesses can make the world run better.”

Clearly, SAP intends to compete and win with its customer experience solutions. There will obviously be a lot to unpack over the next few months as we learn how Qualtrics will be integrated into SAP’s portfolio, along with the continued integration of the other recently-acquired companies, but, in the meantime:

  • If you are a Qualtrics customer, you should reach out to your rep to learn more about how your subscription will be affected by the acquisition
  • SAPinsider is planning a report on the customer journey to SAP C/4HANA where we will benchmark customer adoption, timing, and more. If you are an existing SAP C/4HANA customer, we encourage you to participate in the research process, so we can provide comprehensive insights to the entire SAPinsider community.




New Horizons: An Outline of the SAPinsider Digital Supply Management New Research Approach

I’m reading a book titled The Barons of the Sea, which is an account of the 19th century merchants and trading companies that battled for supremacy in importing tea from China in exchange for shipments of opium. The goal of these entrepreneurs was to find a way to shorten a traditional six-month journey from China to New York so that they could be first to market and increase their revenues. The solution for their challenge was the emergence of the clipper ship.

In today’s business world this theme is being echoed as enterprises face challenges to remain competitive as they cope with the rapid pace of change led by the emergence of new technologies, such as artificial intelligence, big data and analytics, blockchain, cloud platforms, and machine learning. Supply chain executives need to leverage these new technologies to improve their demand-driven supply planning, product development, logistics, and other processes throughout their supply chains. This is their journey of digital transformation.

This month the teams at SAPinsider are also starting on a journey toward a new approach to publishing data-led research reports and other content to help you in your efforts to become a more agile, intelligent enterprise. These reports will be driven by our DART™  methodology:

  • Drivers: These are macro-level events that are impacting an organization. They can be both external and internal and require the implementation of strategic plans, people, processes and systems.
  • Actions: These are strategies that companies can implement to address the drivers’ impact on the business. These are the integration of people, processes, and technologies.
  • Requirements: These are business- and process-level requirements to support the strategies.
  • Technologies: These are technology- and systems-related requirements that enable the business requirements and support the overall strategies that the company is taking.

Within SAPinsider Digital Supply Chain Management we will publish content in five stores. The five stores comprise:

  • Strategic Sourcing, Supplier Networking, and Procurement
  • Supply and Demand Chain Planning and Execution
  • Manufacturing Resource Planning and Execution and Asset Management
  • Warehouse Systems, Labeling Systems, and Transportation Planning and Execution
  • Product Lifecycle Management (PLM), CAD/CAM, Product Development Management (PDM)

We will also publish a weekly newsletter containing an SAPinsider research-led feature article, summaries of news and announcements pertaining to the supply chain space, and a list of helpful resources on specific supply chain topics.

Our SCM research team, led by Sahir Anand, Chief Research Officer and Distinguished Analyst, Kevin Guilano, Junior Analyst, and yours truly leading the research-led editorial content, will produce the latest data-led content on key areas such as digital transformation of your supply chain, intelligent asset management, the smart warehouse, and manufacturing with Industry 4.0.  Our first report is titled “Digital Transformation in the Supply Chain.” The survey for this report will be released in February, and the report will be published prior to our marquee industry events in March (for more information about these events, click here).

We hope this content will help you keep pace with the fast evolution of today’s business processes and find ways to ease pain points you may have on your organization’s journey to becoming an intelligent enterprise.

We look forward to providing you with valuable information throughout this year and many years to follow.

If you would like to discuss leading digital SCM industry trends and technology issues, feel free to email us at gary.byrne@wispubs.com, sahir.anand@wispubs.com and Kevin.Guiliano@wispubs.com. Follow us on Twitter: @SAPinsider, @sahiranand.




Cloud Continues to Lead SAP Growth: SAP Sets Aggressive 5-Year Outlook

On January 29, 2019, SAP officially announced its financial results for Q4 2018 and the full year of 2018. Cloud revenues continue to power SAP’s overall revenue growth — SAP reported that cloud revenue for the year reached €4.9 billion and overall revenue edged up 5% to €24.71 billion. Overall cloud and software revenue fell 1%, however, as even the strong cloud growth couldn’t make up completely for a fall in on-premise software demand.

“In 2018, SAP hit or exceeded all guidance metrics, even after multiple raises,” reported SAP CEO Bill McDermott in SAP’s quarterly statement. SAP is riding a wave of momentum on its cloud software solutions and is seeing accelerated movement toward its flagship ERP offering, SAP S/4HANA.

Interest is also on the rise when it comes to the SAP Leonardo, SAP Digital Platform, and SAP C/4HANA product portfolios. Customer Experience revenue grew 52% year over year, and with the recent closure of its Qualtrics acquisition, SAP is setting its sights on bringing its long-standing hold on operational processes together with customer and experiential data.

Other highlights of the announcement include:

  • New SAP S/4HANA licenses: SAP announced that the number of SAP S/4HANA licenses has grown to approximately 10,500, and that in Q4 2018, over 40% of new SAP S/4HANA licenses were net new. It will be interesting to dig in a bit further to see if these net new customers represent enterprises or small and mid-sized businesses. Look for SAPinsider to shed more light on where our audience is with SAP S/4HANA in our upcoming state-of-the-market report on SAP S/4HANA migration, due out in March 2019.
  • Increased SAP SuccessFactors Employee Central adoption: SAP revealed that it now has more than 3,000 SAP SuccessFactors Employee Central customers. Adoption of this cloud-based solution is critical to SAP’s protection of its installed base. SAPinsider is in the process of talking to our HR audience about their own move to the cloud and will be able to report our insights in March 2019 as well.
  • A cloud-based five-year outlook: SAP expects a significant acceleration of cloud growth over the next five years. SAP is now forecasting that it will triple cloud revenue to €15 billion by 2023 and expects total SAP revenue to be at €35 billion by then. This means that in a few short years, SAP expects cloud to be 43% of total revenue.
  • A restructuring within SAP: SAP is offering early retirement to groups of employees and will also be moving people around as it updates its skillsets to support the growing emphasis on cloud, big data, and SAP Leonardo. Expect the restructuring activity to be heavy in the first quarter. Despite the restructuring, SAP says that it still plans to hire aggressively in 2019.

So, what does all of this mean for our SAPinsider audience? Here are some things to think about as you create your own plans for this year:

  • Make sure you understand cloud at a deeper level: As we learned from our recent survey, most enterprise companies are already supporting a hybrid environment. Expect cloud applications and other offerings to become a lot more attractive and essential in the immediate future. This means you and your teams need to understand how to work with cloud vendors, negotiate cloud licensing, prepare for integration, and secure and manage data, to name just a few key areas. Our upcoming state-of-the-market report on cloud adoption will share more about the skills, benefits, and challenges you can expect to encounter.
  • Learn enough about SAP S/4HANA to make informed decisions: Even if you have no immediate plans for SAP S/4HANA, you’ll need to be informed enough to make decisions about it in the coming year. SAP is prioritizing all new features, functionality, and business benefits for SAP S/4HANA, and the end of support for SAP Business Suite is still slated for 2025. That may seem like a long time from now, but this migration project can be complex, especially if you have a lot of custom configurations and code. Understand now what you’re up against so at least you’ll be able to make an informed decision.
  • Look at your team’s skillsets: To prepare for these new technologies and to support the SAP solutions of the future, you and your colleagues are going to have to face some steep learning curves and also hire for new skillsets. In addition to the cloud challenges I mentioned above, data management, analytics, data science, integration, machine learning, and blockchain are among the new types of skills that will be in strong demand in the coming years. SAPinsider will be drilling into this more in a few months as we tackle the topic of balancing operations and innovation in today’s IT organization.

Bottom line: SAP expects significant growth going forward, and SAP customers will need to be prepared for change. SAPinsider is ready to guide your journey.




A Smooth-Running SAP S/4HANA Implementation Depends on Successful Sizing

With support for SAP Business Suite ending in 2025, the pressure to make the move to SAP S/4HANA is steadily rising, and over 2,200 SAP customers are already using the solution. While there are many important considerations involved when it comes to ensuring a successful move, there is one in particular that is crucial — correctly sizing for the implementation. A failure to accurately size for the software risks poor performance and response times, and business could ultimately miss out on key benefits of the software. 

Remember the last time you waited for an application to open? How long did it take before annoyance set in? One minute? 30 seconds? 10 seconds? In both our personal and work lives, the bar is high when it comes to the applications we use every day: we expect immediate access and seamless operation. The expectations are no different in SAP environments, and when it comes to the business-critical functionality of a solution like SAP S/4HANA, a slow response or unexpected downtime is more than just an annoyance. It’s a drain on your business. 

So how exactly do you correctly size for an SAP S/4HANA implementation, and how is it different from traditional sizing? There are considerations specific to SAP HANA, for instance — with SAP HANA, memory is the main driver for sizing rather than CPU performance, which tends to be the main driver for traditional databases. Fortunately, you don’t need to navigate this undertaking all on your own — there are resources already available to help you that are specifically geared to this type of project. 

SAP provides tools and guidance for sizing, including an SAP HANA-specific version of SAP’s Quick Sizer tool, configuration guides based on SAP’s Standard Application Benchmark results, and SAP’s Certified and Supported SAP HANA Hardware Directory. And at SAPinsider’s upcoming Basis & SAP Administration event, March 19-21 in Las Vegas, there is a session that walks you through exactly how to manage this task successfully using customer examples. 

The pressure is on to make the move to SAP S/4HANA, and accurate sizing is essential to smooth-running software. With careful planning and use of the available tools and resources, you can ensure that your SAP S/4HANA implementation performs at the level your business needs to succeed.