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Blockchain and Capgemini with SAP Leonardo – Part 2 – Procure to Pay (P2P)

Blog: Capgemini CTO Blog

In our series of SAP Leonardo blogs, we split the subject of Blockchain into two parts.  Part 1 focused on the challenges and benefits associated with this technology; this blog explores how the technology might be used in an end-to-end value chain and the impact on the business.

SAP Leonardo is a range of technologies – Internet of Things, Machine Learning, Blockchain to name a few – and enables blockchain services to be embedded into applications to speed up transactions and deliver trust, visibility and security.

So is there really business value in Blockchain for business process optimisation and transformation that transcends the hype?

A recent Gartner report suggested that Blockchain activity is at the peak of “inflated expectations”; its relative immaturity coupled with the potential benefits is creating pressure on CIO’s to ‘do something’.

Indeed, some of the use cases and business processes being discussed in relation to Blockchain might actually be delivered instead through improved integration, API’s or EDI messaging.

However, there are more complex scenarios in which real business value could be delivered.  Key candidates are those in which:

Let’s take the e2e Procure to Pay (P2P) value chain as an example:

We’ll start simple and build to greater complexity.

P2P can be problematic for many organisations and their suppliers.  P2P transformation or improvement programmes still frequently deal with areas that could be considered fundamentals or ‘the basics’: three-way match, compliance and control, prompt payment of suppliers for example.

Other challenges include understanding goods in transit, receipting of items on delivery or into inventory, understanding issues with invoice processing in the partner organisation, late payments, cash forecasting.

And these are areas in which Blockchain could be used.

A simple transactional flow in the P2P value chain to start with:

This is a basic direct or indirect P2P scenario that shows how Blockchain could be used to record, and make visible, the key events that take place in a buyer / supplier relationship:

The diagram below fleshes this out into more detail with some of the key transactions from the purchaser’s perspective called out in more detail.

The transactions that update the Blockchain and those that are visible to all parties clearly depends on the value of that update to the participating players.

More complicated scenarios in the P2P value chain could benefit from use of Blockchain technology:

Real benefit could be delivered when considering more complex scenarios that can cause issues in P2P – let’s look at two real-life customer examples in a bit more detail:

 

So where is all this heading?

There are many potential use cases for Blockchain and part 1 of this blog series touches on some of these in Maintenance, Repair and Overhaul (MRO), Supply Chain and Asset Management.

And P2P, as we have seen, has a set of emerging business processes in which optimisation and transformation opportunities exist and where Blockchain could start to transition from expectation into the mainstream.

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