SophiaTX Integrates Blockchain Technology With SAP

In September, SophiaTX announced the first open-source platform to primarily integrate blockchain technology with SAP software, used by 87 percent of global businesses and 98 percent of the top 100 most-valued brands.

“To advance blockchain into business operations, the blockchain must integrate with ERP [enterprise resource planning] and other enterprise applications such as SAP,” notes the SophiaTX white paper. “This sector has been relatively untouched until recently when Equidato Technologies AG [SophiaTX’s parent company] announced their first project, SophiaTX, an open source blockchain platform and marketplace designed for businesses of all sizes.”

The integration of blockchain technology with ERP, CRM (customer relationship management) and SCM (supply chain management) business software is certainly a hot topic pursued by major vendors and blockchain-oriented solution developers. In May, SAP itself launched its innovation system, dubbed SAP Leonardo, focused on next-generation technologies, with an SAP Cloud Platform Blockchain service targeted at all industries, including but not limited to popular use cases in financial services and supply chains. SAP’s blockchain technology platform allows customers and developers to build blockchain extensions for existing applications and integrate SAP solutions in the blockchain ecosystem. Embedded in the SAP Cloud Platform, SAP’s blockchain-as-a-service (BaaS) pilot allows customers to experiment with the technology.

SAP is also envisaging the integration of blockchain technology with other next-generation technologies, such as the Internet of Things (IoT). In September, SAP announced a blockchain co-innovation initiative and plans to make blockchain technology an integrated part of IoT, manufacturing and digital supply chain solutions using its Cloud Platform Blockchain service.

“Prior to defining the strategy and approach for SophiaTX, we assessed the technological capabilities of other blockchains to ensure we were truly adding value,” Jaroslav Kacina, CEO of Equidato and SophiaTX,  told Bitcoin Magazine. “We wanted to create a product that will not only be suitable for business but also provide superior functionality and features. We found that very few of the existing blockchains are focused on business and enterprise applications, and we couldn’t identify any that would be suitable for business from compliance, security and architecture perspective.”

Kacina explained that Ethereum, for example, is probably the most dominant platform for initial coin offerings (ICOs) and token generation events (TGEs), but in his view, Ethereum’s use of proof of work makes it inappropriate for providing secure, holistic, high-performance blockchain solutions.

“On the other hand, SAP’s own Leonardo initiative, Blockchain as a Service (BaaS), is shaped as a private solution and therefore tends to be relatively expensive for smaller businesses, as well as less transparent, since it is cloud based,” Kacina added. “We designed SophiaTX with business use in mind so it is compliant, secure and public, therefore allowing businesses and customers across entire the value chain to join and adopt the use of the platform.”

Based on the same proprietary technology as the DECENT blockchain, SophiaTX was created by Equidato Technologies AG, a joint venture between DECENT on the technology side and the Venaco Group bringing its experience in enterprise applications for business to the project.

“We have decided to use DECENT technology due to the fact that DECENT uses DPOS (Delegated Proof of Stake) which is faster than Proof of Work used by Ethereum and Bitcoin,” Kacina explained. “We needed a platform which is suitable as a starting point to create additional features to make it compliant, secure and relevant for business. And also, having access to [the] DECENT team’s capabilities allows us to bring [the] product to market in [an] accelerated fashion. The ‘hard fork’ was created as a copy of the DECENT’s main net and installed as a proprietary solution for SophiaTX.”

A proof of concept (PoC), recently demonstrated to a select group of attendees in Zurich, shows how businesses can use blockchain technology to transparently and reliably exchange information between their enterprise systems in real time, with a customer invoice directly created in one SAP system automatically transferred via the SophaTX testnet to another company using a different SAP system.

SophiaTX wants to be a cross-industry platform allowing both vertical and horizontal integrations for businesses of all sizes. “At the initiation of this project, we analyzed all standard modules of typical ERP systems (SAP) across finance, procurement, logistics, sales, manufacturing and others, and we have identified over 15 specific use cases within several industries,” Kacina told Bitcoin Magazine.

“It became apparent to us that, in order to adopt blockchain [technology] into various industries and connect to the enterprise applications, we needed to provide common building blocks across all modules of ERP, SCM and CRM systems. This led us to the concept of establishing a platform, as a key infrastructure for peer-to-peer smart transactions, prior to building industry specific solutions.”

Kacina explained that different types of cross-industry scenarios have been worked out. For example, one-to-one document exchange could be used by any industry needing to acknowledge the transaction of invoices, purchase orders, delivery notices and other documents, while multiparty-information exchange is especially relevant for projects or systems with multiple vendors, contractors or collaborating firms. As an industry-specific example, SophiaTX wants to enable a “track and trace” solution across value chains, allowing supply chain transparency and security, which is considered as being of particular interest to the food, pharmaceutical and luxury markets.

The proprietary SophiaTX token, SPHTX, will fuel the SophiaTX blockchain. The SophiaTX token sale will last for 10 days with a hard cap of 115,000 ETH and fund the development, marketing and ongoing management of the project and the overall SophiaTX platform. Kacina explained that the token will grant rights to use and transact using the platform, thus rewarding miners validating transactions and blocks on the chain.

The SPHTX token will also allow access to the development platform and facilitate the licensing for private blockchains. Finally, the SPHTX token will permit using the marketplace, a web-based entry point for customers and solution developers, which will feature an App Store and a Dev Store.

“The SophiaTX marketplace will be used by both industrial companies and a global community of experts, consultants and developers,” Kacina told Bitcoin Magazine. “It will be specifically designed to not only share applications and assets, but also to exchange know-how, process maps and blueprints, integration strategies, and to offer professional consulting services to encourage accelerated adoption and use of the platform. A developer, for example, could publish an app in the marketplace which would be accessible to businesses, as well as the end-user community, [that] use applications that integrate with their existing systems. Developers are rewarded when their application is downloaded and deployed.”