By Shivani Govil, Global Vice President for artificial intelligence and cognitive products at SAP Ariba, the world’s largest business network, linking together buyers and suppliers from 3.4 million companies in 190 countries.
According to a growing chorus of business technologists around the world, blockchain stands poised to revolutionise nearly every industry. Momentum has gathered pace as companies around the world evaluate proofs of concept and pilots using this emerging technology and venture capital investment flows toward startups embracing it. Every week, it seems, a blockchain-related conference or event takes place somewhere in the world.I was initially a skeptic when the technology first came on the scene a few years ago.I thought it held promise, but many aspects remained unproven. Fast-forward a few years, and I have evolved from pure skeptic to cautious optimist. While none of us can foresee precisely when or in what form blockchain will transform business, I believe the technology has the potential to revolutionise the world of enterprise software as we know it.
But what is it, exactly?
Blockchain uses cryptography, peer-to-peer networks and consensus algorithms to create a digital ledger or repository of transactions. Every participant in a blockchain can observe these transactions, which are verified and recorded in a connected chain of information. Blockchain allows multiple participants to share information and conduct business transactions directly with each other, eliminating the need for third parties. The transparency of information is built-in, because blockchain allows multiple parties to retain an identical record of the history. Any updates to the repository can only be achieved via consensus from all impacted participants. It is important to note that while blockchain is commonly associated with cryptocurrency, the two are not interchangeable. The former is a technology, while the latter represents its application.
Several factors make the technology appealing to enterprise software:
Blockchain is a decentralised, distributed, digital ledger that stores a registry of transactions, secured through cryptography. Blockchain writes data as blocks of transactions, where each block contains a hash of the previous block. It is not possible to change data in a block without effectively destroying the chain. Once data has been written to the blockchain, it cannot be updated or deleted. Trust is achieved through this immutability of data and is unlike traditional centralised databases where data can be changed in most types of records.Trust comes not only from immutability and cryptography but from the fact that the “digital truth” is replicated to many blockchain nodes and thus everyone can own a digital copy (or one can have many nodes operated by different organisations).
Because no centralised entity owns the blockchain data, all parties to a transaction enjoy a full view. This transparency, not unlike Wikipedia or other crowdsourced platforms, becomes important in scenarios such as a supply chain, where multiple parties need to contribute information — or when data needs to cross organisational boundaries.
Blockchain enables buyers and sellers to rely on the same, verifiable set of information. This audit trail means that if someone tries to make a fraudulent transaction, the decentralised nature of the chain will encourage others to thwart it before it goes through. This aspect of blockchain removes the intermediaries traditionally involved in commercial transactions, making them faster and more efficient.
- Smart contracts
One of blockchain’s core features — smart contracts — contain executable code designed to trigger a particular action when predetermined conditions are met. For example, if a transaction exceeds a set dollar amount, the smart contract initiates an additional level of management approval. This conditional requirement, coded within the blockchain, can help procurement professionals to ensure compliance and meet budgetary goals.
Those of us working in digital procurement have understood the importance of these attributes for years. That’s because, long before the emergence of blockchain, the architects who designed the first digital networks realised that until they instilled trust, businesses would never turn away from pen-and-ink ledgers and dead-tree product catalogs. Two decades later, today’s cloud-based procurement networks facilitate secure, encrypted commerce among millions of buyers and suppliers in nearly every country on earth.
However, there are still several limitations need to be overcome if blockchain is to be widely adopted:
For many, blockchain can be confusing. More than merely an innovative technology, it represents an evolution in people’s approach to commerce itself. There is limited talent who understand how this technology works — and even the experts often think about the technology slightly differently from each other. Moreover, expertise in the technology is not distributed uniformly but clustered in certain parts of the world. Yet the solutions it enables are global, so adoption requires a widely dispersed talent base who understand it well.
- Ecosystem adoption
Blockchain adoption is not simply about the technical details. It is equally important to have the involvement among all stakeholders in an ecosystem.
For example, in the procurement scenario of “Know your supplier,” where a buyer needs to know the details and certifications of key partners, the solution can be useful only if all suppliers adopt the blockchain and enter their information. Similarly, in seeking to verify the provenance of raw materials, the related business partners must be on the blockchain in order to track from origin to end-product.
- Bad data
The immutability of blockchain records becomes a challenge the moment faulty data is entered, since correcting it requires unanimity on the part of transaction participants.Companies that own and develop“systems of record” have an inherent advantage, as they can ensure the accuracy and authenticity of the data at inception. When bad data is entered,it is kept forever and can have long-lasting negative impact.
- Speed and power consumption
Today, the speed at which most blockchain transactions are processed remains limited. Blockchain platforms are not designed to process millions of transactions in seconds, as credit cards do. For example, the Bitcoin network is capable of processing a maximum of seven transactions per second. Imagine applying this processing time to a network of millions of people;one’s wait time would be a century, give or take! In contrast, Visa processes thousands of transactions per second, enabling the network to move with fluidity and ease. There are some protocols enabling much higher volumes of transactions per second – still not yet comparable to the credit card payments– but sufficient for many enterprise scenarios. In addition to speed, there is a concern about the total volume of data stored in the Blockchain, which can also slow things down.
- Interoperability across blockchains
There are several different public blockchain protocols. In addition, many companies are moving to launch “permissioned” blockchains. These are a variation of public blockchains, where only certain people are invited and allowed to view the data. As public and permissioned blockchains are set up, the challenges related to the interoperability of all the emerging protocols and consortiums arise.
Despite the afore mentioned constraints, blockchain boasts many strengths and enables new capabilities that can unlock value across a business. Andindustry leaders are working to figure out how they can leverage the technology to do this.
In many organisations. Procurement is taking the lead. And it’s only natural. After all, procurement networks — like blockchain — are global and secure. both depend on trust to function properly and require information-sharing, across company boundaries,among buyers and sellers. Blockchain has the potential to become the complementary technology layer to digital networks, where data-sharing across parties can be facilitated and execution of transactions can be enabled and buyers and suppliers’ ability to share data exclusively, authenticate each other reliably, collaborate on products virtually, evaluate third-party risk instantaneously, and maintain an audit trail permanently enhanced.
And this is a good thing for technologists and procurement professionals alike. Because together, they can shape a future where digital networks and blockchain aid buyers and sellers everywhere in securing products and services in a more secure and trusted manner.
Take Five: Davos goes virtual
It is the end of January, so time for the Davos World Economic Forum (WEF), and Chinese President Xi Jinping, German Chancellor Angela Merkel, Japanese Prime Minister Yoshihide Suga and European Central Bank chief Christine Lagarde are among this year’s big-name speakers.
But Davos was not spared the pandemic hit; instead of gathering at the Swiss ski resort, the world’s great and good will do so virtually.
With the global economy deep in crisis, there is no shortage of topics: soaring unemployment and debt levels, growing income inequality and climate change.
And, like everyone else, the WEF is pinning hopes on normality returning – it plans a face-to-face meeting in Singapore in May.
Outpaced by a late-2020 surge in so-called value stocks, tech shares have roared back amid the pandemic’s unrelenting march. That is reflected in recent hefty gains for Russell’s 1000 “growth” index versus its value counterpart.
The gains could extend when Apple, Microsoft and Facebook report earnings. Also on deck is Tesla, which recently joined the S&P 500.
The results could push the combined market capitalisation of the FAANGs – Facebook, Amazon, AAPL Netflix and Google-parent Alphabet – back above their all-time peak of $6.16 trillion.
Netflix has done its part; robust subscription numbers reported on Jan. 19 have boosted its shares 17%. Now there are high expectations for the rest. Morgan Stanley has boosted the price target for Apple, declaring themselves “buyers ahead of what we expect to be a record December quarter print”. Microsoft reports on Jan. 26, followed by Apple, Facebook and Tesla a day later.
Graphic: The return of the FAANGs – https://fingfx.thomsonreuters.com/gfx/mkt/oakpeyelnpr/Pasted%20image%201611266376120.png
3/RED ENVELOPE FOR HONG KONG
Record amounts of Chinese money are flowing into Hong Kong stocks, pushing the Hang Seng index above the 30,000 mark, making it a global top performer and putting a floor under Chinese companies blacklisted by Washington.
The inflows have also pushed Hong Kong interbank rates to multi-year lows, meaning authorities may not even need to inject cash, as they usually do in the run-up to February’s Lunar New Year holiday.
An upcoming $5 billion IPO from Chinese online video company Kuaishou may draw in even more mainland money.
For a city rocked by pro-democracy unrest since 2019, this endorsement of its markets is a positive. Unless, that is, one views this as another sign of China’s growing political and financial stranglehold on the special administrative region.
Graphic: Mainland investors hunt for bargains in Hong Kong – https://fingfx.thomsonreuters.com/gfx/buzz/xlbvgylqevq/mainland%20investors%20hunt%20for%20bargains%20in%20Hong%20Kong.jpg
4/DRIVING OUT EUROPE INC BLUES
Europe’s STOXX 600 firms are expected to report a 26% earnings drop during the Q4 season which has just got under way. But that is history – let’s look instead at the January-March 2021 season when a 44% profit jump is predicted.
Such a surge seems intriguing given new continent-wide lockdowns. The explanation lies in consumer cyclicals, which Refinitiv I/B/E/S predicts will post an eye-popping 3,118% profit gain, versus the pandemic doldrums of Q1 2020.
Drilling down to single stocks, Daimler (1,471%), Fiat Chrysler, now Stellantis (177%) and Volkswagen (602%) turn out to be the largest contributors. Carmakers have seen their biggest earnings revisions in a decade and boosting shares to 14-month highs.
Graphic: Autos – https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqmnwxvx/Autos%20hold%20key.JPG
The coming week brings prelimary Q4 GDP data from France, Spain and Germany. Okay, the data is outdated and we already know the first quarter will show an activity dip from lockdown extensions. But let’s not be too hasty in dismissing the end-2020 numbers.
If the economies fared better than expected, it provides a cushion for the blow coming this quarter – that is the conclusion some reached after 2020 growth in powerhouse Germany turned out less bad than feared.
Also pay attention to Germany’s January inflation numbers, out Thursday. Those could show that a reversal in VAT cuts is easing the downward pressure on prices. In short, amid the pain inflicted by lockdowns, some positives might well lurk.
Graphic: Germany’s GDP data set for a bumpy ride – https://fingfx.thomsonreuters.com/gfx/mkt/xlbvgyjmmvq/theme2201DR.PNG
(Reporting by Ira Iosebashvili in New York; Vidya Ranganathan in Singapore; Karin Strohecker and Dhara Ranasinghe in London; Danilo Masoni in Milan; compiled by Sujata Rao)
Hisham Itani and Resource Group Recognized in the 2020 Global Banking & Finance Awards®
Global Banking & Finance Review has awarded Hisham Itani the Chairman and CEO of Resource Group, Technology CEO of the Year Middle East 2020 in recognition of his vision, strategy and strong leadership that have contributed greatly to Resource Group’s success in winning the Most Innovative Holding Group Middle East 2020 in this Global Banking & Finance Awards®.
Resource Group is an investment group with a portfolio of diversified businesses that capitalizes on technology and human talent for value creation. The company has proven that it has gone the extra mile to develop innovative solutions aimed at improving people’s lives and helping Lebanon transition toward a knowledge-based economy. Global Banking and Financial Review, the renowned online and print magazine identified a number of areas that Resource Group has excelled. The company has been awarded Most Innovative Holding Group Middle East 2020, and Hisham Itani the Chairman and CEO, receives the award for Technology CEO of the Year Middle East 2020. Under his leadership, Resource Group has grown from a family security-printing business to a diversified international investment group, with a portfolio of companies across 10 sectors in over 75 countries.
Wanda Rich, editor Global Banking & Finance, said “Mr. Itani took the security printing business to another level and expanded into different technology verticals in an impressive list of success stories”. The list includes digital security, smartcard manufacturing, mobile value added solutions, cyber security and secure communication solutions, telecom infrastructure and managed services, elections supply chain services, lottery systems and operations, mobile and virtual reality games, among others.
Resource Group’s focus on technology has had a constructive and tangible impact on government automation and on citizen experience in target markets.
Editor Wanda Rich says “We are proud to offer Resource Group these prestigious awards and wish them continued success and growth into 2021 during these challenging economic times”.
Global Banking and Finance Review is a renowned online and print magazine. The magazine’s website alone receives over 7 million page views annually. Global Banking and Finance Review provides a balanced view with formative and independent news from the financial community. The Global Banking & Finance Awards® were created to recognize companies of all sizes that are prominent in particular areas of expertise and excellence within the global financial community. The awards are known throughout the global banking and financial community. They reflect the innovation, achievement, strategy, progressive and inspirational changes taking place within the financial sector.
Bouncing back in 2021: Digital Transformation is no longer a choice as dependence on 5G, IoT and Data increases in society and business
By Ivan Ericsson, Head of Quality Management, Expleo Group Limited
The global pandemic has put enormous strain on businesses and brought into sharp focus the importance of being agile, adaptable and able to increase the pace of innovation and change at short notice – catapulting technology right to the top of the agenda for many organisations.
As the economy works to get back on its feet, technology is only going to play a bigger role in our lives. At Expleo, as experts in digital transformation and the reliable implementation of technological innovations, we’ve outlined the biggest tech-driven trends that we expect to see in 2021 and beyond.
1) “Digital transformation” no longer a choice
If the COVID-19 pandemic has taught businesses anything, it’s that they need to be poised to respond to abrupt market disruption at any moment, making digital transformation mandatory overnight.
With no room for delay, hugely complex corporations – that have historically been slow to adopt technology – have had to accelerate their reliance on technology just to keep afloat in recent months. Digital change, at speed, has become the norm.
Even last year, the idea of an unscheduled video conference call might put people on edge – now most of us wouldn’t think twice about calling a colleague over Teams or Zoom even for a 2-minute conversation. At the same time, social infrastructure has moved with the needs of its users, with telecoms giants strengthening and opening up networks so we can keep communicating despite social distancing.
There are now very few excuses left for operating in a non-digital way. All businesses need to be intelligent businesses that can change direction nimbly, with speed, confidence and composure. As we see more businesses putting this into practice, it’ll likely result in an increased number embracing and normalising some of the behaviours of tech-savvy giants like Apple and Amazon, who have no doubt thrived during this period.
Their success can largely be attributed to normalising an agile approach. By ensuring all applications have testing facilities built in – a “quality shadow” if you will – it allows for continuous improvements, and the ability to change direction quickly and confidently, when needed. This is particularly valuable today as the world becomes more fast-paced and increasingly unpredictable.
2) Big data/AI/predictive analytics
We’re moving into a space where big data can be extracted from the most seemingly innocuous places. In a hyper-connected world, a move as simple as a dog walk could offer huge swathes of data to the right companies. Many businesses already realise the benefits of capturing and utilising big data, but not all have taken advantage of it. The businesses that move quickest are most likely to reap the rewards in a more impactful way than their ‘data shy’ competitors. Where data used to be a side effect of business operation, it is now the driving force.
As businesses begin to rely more heavily on data to make critical decisions, independent assurance becomes increasingly important to get those decisions right. Forward-thinking, data-driven organisations must therefore assure that the data is correct in the first place, to avoid giving businesses false confidence and risk them moving in the wrong direction – something that is rarely affordable in today’s competitive and fast-paced environment. If businesses are not 100% confident in assuring the quality and accuracy of their own data, they should look to a third party for support.
A key data trend we expect to see moving further into 2021 is the increased use of predictive analytics. At the moment, businesses will often use data analytics to give us insights into our past activities, or to tell us where we are right now. However, the real value lies in knowing where we are going and how we are going to get there. Data analytics will help to identify the optional levels that can be pulled to drive change and realise business benefit.
Secondly, as intuitive technology advances and becomes more accessible, we expect over the next 12 months to see companies of all sizes begin to adopt artificial intelligence (AI) to drive intelligent analytics. In this context, AI refers to various technologies that allow machines to learn, sifting through ‘messy’ big data in order to find and unlock valuable predictive insights into future events. This allows businesses to better adapt their strategy to likely future outcomes and get a head start in the market.
However, with this ever-increasing emphasis on data and data protection, ethical AI will have a more prominent role to play in 2021 and beyond. Protected, usable Data is a by-product of good data security and privacy measures; however, the public remain wary of how their data is being used, particularly after the fallout from Cambridge Analytica’s use of data to influence an election. Businesses, therefore, must give their customers confidence that their data is secure and protected.
3) Moral relevance/corporate altruism
Research shows that young people are increasingly researching and considering the ethics of brands they’re purchasing from. And it won’t be long before this attitude starts seeping into every other aspect of their lives, with more and more people wanting to work for what they consider to be “purpose-driven” businesses.
Talent is the lifeblood of any company, so for big corporations, many of whom were born to create profit, this could put them in a tricky position. They might already be influencing society in a positive way – but this is unlikely to have ever been their main goal.
Moving forward, however, all organisations will have to start thinking about the “Triple Bottom Line”. That means considering the environmental and social impact of your business, alongside your commercial imperative.
We’ll soon see a mindset switch across businesses, from ‘competing’ to ‘advancing’. Instead of wanting to be the “best,” the question will be, how can I better serve the world around me?
In line with this, businesses will have to start thinking more about how to use tech for good, as we’ve seen with the likes of Microsoft Teams connecting tens of millions of people every day, during this very dark time.
2021 is likely to bring even more inroads when it comes to using technology to improve society, whether it’s developing bespoke problem-solving technologies or using IT to ‘eco-proof’ existing sectors, the goal for businesses is to rise to this challenge and build a better future for people and the planet through the use of technology. But all organisations will continue to need to be able to justify technology use and prove that they’re using it ethically, and in a secure manner.
4) 5G new networks – just about all big trends are driven by/reliant upon faster networks – particularly relevant for a more distributed workforce
Greater access and utilisation of 5G networks across the country will underpin and accelerate all of the key trends discussed. Everything we do on our smart devices we can expect to do at higher speed, greater capacity and with lower lag times.
As our digital footprints extend beyond simple web browsing and into our daily lives through smart technology, we are creating huge amounts of data every minute. This vast flow of data is increasingly dependent on new high bandwidth networks to facilitate it. Therefore, the merging of technology and engineering will become critical in ensuring big data is carried successfully to drive analytics and drive business.
The fact we have managed to successfully work from home during COVID is a glowing recommendation for the quality of the networks as they exist today, and they will only get better.
The telecoms industry is already working overtime to ensure that people all over the country get reliable access to the internet – and the fact that there is still inequality in this area proves just how challenging this is. But, in line with this trend toward hyper automation, which will make data extraction and analysis a part of everyday life for businesses, the consolidation of tech and engineering will be ever more important.
Forward-thinking companies will look to incorporate 5G networks into their business strategy. This could be from an internal perspective to enhance the abilities of their remote workforce. Alternatively, this could relate to their own products or offerings – developing an internet of things (IoT) strategy, improve user experience, or bring products to market faster by analysing big data and adapting quicker. Either way, with increasingly improved networks, businesses are expected to take advantage of the huge increase in accessible and usable data.
For businesses to truly reap the benefits of these new technologies, they must be developed and adopted in the right way.
Quality assurance, trust and security are three key requirements that the technology of the future depends on to succeed. Having these requirements at the heart of any digital transformation will ensure that systems perform reliably, having been tested and assured.
By prioritising a seamless customer experience combined with an ability to create, test, and scale digital solutions and operationalise at pace, businesses will be in the best possible position to take advantage of the potential being unlocked by these new technologies.
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