IBM and SAP plan a blockchain-based joint venture accounting solution for oil and gas

New solution for billing reconciliation and settlement issues said to speed reconciliation. But may cannibalize SAP’s own JVA package.

IBM Services and SAP are ‘planning to develop’ a blockchain-based joint venture accounting system for oil and gas. According to the release, ‘the solution expects to improve (sic) reconciliation and settlement times between operators and non-operators.’ Blockchain is proposed as a solution to perceived JV accounting issues such as billing and settlement discrepancies that increase reconciliation complexity time. Blockchain is said to be ‘the perfect solution’ to the JVA ‘problem. The solution will be built atop of SAP’ ‘Leonardo’ digital innovation system using the open source Hyperledger Fabric blockchain.

Oil IT Journal readers will be aware that we are skeptical as to blockchain’s true usefulness (see Neil McNaughton’s editorial). But there is another aspect to SAP’s use of blockchain, in that it is a technology that would cannibalize other solutions, notably SAP’s own JVA solution. We were also underwhelmed looking through the agenda of a recent ‘blockchain in oil and gas’ conference at which the majority of the presentations had nothing to do with blockchain. IBM and SAP are serial announcers of improbable technological advances, witness the 2017 announcement from IBM and SAP’s Ariba unit of a proposed combination of procurement, Leonardo and the ‘cognitive’ IBM Watson! To which we now presumably need to add ‘and blockchain.’

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