Humans are social beings. We crave connection with others. As far as history goes, we have hunted, migrated, and lived in communities with others. Why should this desire to make meaningful connections be any different between businesses?
From startups to multinational corporations, building and leveraging business networks to serve customers in a fast and reliable manner is a key strategy for growth and success. However, many supply chains suffer from siloed operations and lack of open collaboration among partners, which leads to poor visibility in processes and data sharing.
As disruptions in globally connected supply chains become more prominent, we explore opportunities to break down barriers and embrace the power of truly collaborative and agile businesses.
For decades, business collaboration has been the backbone of commerce, connecting various companies, suppliers, and customers in a web of relationships that enable resource and finance flows. These networks have been established over time and are highly optimized in terms of cost, speed, and risk reduction.
Over the last few years, it has become apparent that these networks are highly fragile and can quickly unravel when faced with external shocks. With increasing geopolitical instability and irreversible climate change effects, this scenario is likely to become even more pronounced in the future.
Antifragility in Business: From Resilience to Adaptation
To address this, businesses need to transform the way they operate and become more adaptable. According to author Nassim Nicholas Taleb, it is important for businesses to strive for “antifragility,” rather than resiliency. This means that instead of simply bouncing back to their pre-shock state, businesses should learn and grow from shocks, becoming even stronger as a result. Therefore, the transformation we see for business networks, or B2B collaboration platforms, is that they need to become open, flexible, and interoperable in the future.
In essence, any business will need to be able to reassemble business networks dynamically and rearrange and reorient as needed depending on external or internal factors.
We at SAP already support our customers in this endeavor. By using long-standing expertise with business processes and technologies such as blockchain and artificial intelligence (AI), and by staying up to date on the latest trends, we help customers with the evaluation and implementation of innovation. By utilizing this expertise, we aim to enable agile collaboration and multi-tier visibility while minimizing business risk. This can result in the opening up of traditional business processes and financial flows, including cross-border payments.
Our ultimate goal is to foster strong business relationships by enabling a new layer of cross-company collaboration and business process orchestration. It could be hybrid or completely based on an open, decentralized network infrastructure bringing all companies on one common platform together — regardless of industry, geography, or size.
Example: Managing Digital Identities Across Networks
One of our most promising initiatives in this context is developing a service for digital identity management.
Identity is key in any business process. But digital identity management has long been a challenge for individuals and businesses alike. Traditional username and password systems are insecure and easily hacked, while social logins leave all personal information under the control of one corporation. The lack of universal standards makes it difficult to ensure the trustworthiness of information and to integrate digital identities across different systems and processes.
This is where self-sovereign identity (SSI) comes in. SSI is the first open standard for digital identity on the web, offering a solution to these issues. With SSI, users have the same convenience as social logins, but also have complete control over their data. This new identity standard applies not only to individuals, but also to corporations and devices such as the Internet of Things (IoT), providing globally unique and interoperable identities. Each identity wallet is established through cryptographically verifiable credentials, anchored on a public, permission-less blockchain network. Using this technology we can create a vendor-neutral network infrastructure that makes it easy to join the network and share trustworthy data.
The impact of SSI will be felt across many software systems, including enterprise suites like SAP S/4HANA and master data in particular, where it can provide a single source of truth for master data, making onboarding processes between companies orders of magnitude faster. In the blockchain space, SSI has the potential to bring much-needed credibility to anonymous addresses and transform the industry into a space for reputable business. At SAP, we are enabling customers, partners, and application developers to build applications using self-sovereign identities on SAP Business Technology Platform (SAP BTP).
But creating a universal identity standard is just one use case. Besides this, we are working on a range of other cutting-edge use cases such as industry-specific business networks, decentralized finance, and collaborative workflows beyond company and system borders. Our focus on innovation in both future business processes and future business decisions is integral to bringing the concept of future business collaboration to fruition.
SAP already conducts a significant amount of business on SAP Business Network, with over $4.9 trillion in annual commerce and operations in 190 countries, having handled over 730 million B2B transactions within a 12-month period on the platform.
To help our customers solve the problems of the future, we are combining this advantage with the deep experience SAP teams have in technology areas such as blockchain, AI, interoperability, security, and business processes. Our teams are closely collaborating with product development to incorporate our findings into the road maps for our standard products — such as SAP Recommerce and Encore by SAP, which have graduated from being internal company ventures into capabilities — to transform the way resources flow in the circular economy.
Martin Heinig is head of New Ventures and Technologies at SAP.
This piece was originally published on LinkedIn.