
LIDL cancels SAP introduction after spending 500M Euro - wohlergehen
https://www.br.de/nachrichten/lidl-setzt-500-millionen-euro-in-den-sand-100.html
======
netinmate
Customization is key, you CAN't customize. I worked on an SAP implementation,
a Fortune 500 company, complexity like crazy, sub-companies, of sub-companies,
of sub-companies, federal, state and local compliance for what the company
did, operating in 50 states, with an International supply chain, and our
integrator was nothing special.

We held firm to the NO CUSTOMIZATION rule, we re-engineered our processes to
fit SAP. Other than a few hiccups when integrating all aspects of a company
that has 100 sub companies, and is under federal, state and local regulation
the project basically went off without a hitch.

They are still taking upgrades 6 years later, without issue.

Most companies think they are unique, and special, and feel justified in
needed to customize, all those companies are wrong.

~~~
bumholio
> we re-engineered our processes to fit SAP.

That sounds just about like the most revolting and negative endorsement you
can make for a business solution.

Every company _is_ special and the flexibility to adapt to a changing
environment is what keeps a company alive during those times of crisis, that
always come. "We can't do this because the system does not allow it" is great
and expected at the warehouse worker level, annoying at the branch manager
level and catastrophic at senior management level.

~~~
d_e_solomon
As a former consultant in SAP - Most companies aren't that unique in how they
execute most processes. For instance, AP payments generally looks the same at
a high level. For the variations of business processes, SAP gives you lots of
room to modify configuration to fit your process. If you're in a specialized
industry like Aerospace or Oil and Gas, they have unique industry specific
solutions.

I've seen the flip side where people custom code the heck out of the system.
That becomes impossible to upgrade and impossible to take advantage of new
features.

I've also seen lots of bad processes continued that could have been re-
engineered to be good processes if the implementer and business had an honest
conversation. SAP for better or worse forces these conversations by limiting
the ways that you can implement the solution.

SAP failed implementations are not unique from other software failed
implementations. It doesn't fail because of the product; it fails because of
the people and politics of the organization. SAP tends to make the headlines
because of the size of the implementations and the eye watering costs.

~~~
dragonwriter
> SAP failed implementations are unique from other software failed
> implementations.

No, they aren't.

> It doesn't fail because of the product; it fails because of the people and
> politics of the organization.

Essentially all project failure are for that reason. (Including ones where one
intermediary step on the route to failure was that the people and politics in
the organization ended up selecting a solution that was a poor fit for the
problem.)

~~~
freehunter
The last big project failure I had was due to the company selecting the right
technology for the problem, but the wrong one for the company culture. The
company's engineers were young and viewed themselves as a startup, which means
they like to use bleeding-edge solutions. The company themselves were an old
enterprise with well-worn problems, and picked exactly the technology they
should have. Unfortunately a newer, sexier product was part of the selection
process, and the engineering staff didn't like that management picked the
"wrong" one. They stonewalled the project until it failed, management
complained about how inflexible the product was, and they switched to the
other, newer, sexier product (I work for a vendor-agnostic consulting
organization, so I stayed on for both products) and we ended up developing
custom solutions for every problem we encountered with the new sexy product.
Solutions that were solved out of the box with the older and more mature
product.

It was $110m down the drain on the first product, then another $80m to
purchase the second, plus the cost of my consulting time to create custom
solutions.

People and politics are the hardest part of any technology implementation. Any
article I see blaming SAP, IBM, Oracle, HP, etc of botching a multi-million
dollar public project, I always have to wonder: _who_ went wrong... not _what_
went wrong.

~~~
dragonwriter
> The last big project failure I had was due to the company selecting the
> right technology for the problem, but the wrong one for the company culture.

The company culture is a central piece of any business problem you are
addressing, if your solution doesn't address it, it isn't addressing the
actual problem, but at best a lower-dimensional projection.

~~~
derefr
Usually there’s no interface to addressing such problems.

Interacting with the cultures of some companies is like trying to treat the
mental illness of someone in a dissociative fugue state. You might have a
solution that fits how things are on the inside—but how are you going to even
get through to them to communicate that, when they can’t hear or see you and
are instead lost in their own little world?

~~~
dragonwriter
> Usually there’s no interface to addressing such problem

I think you mean correcting culture to some preferred ideal, and that's likely
true.

But what I'm saying is that institutional culture is a factor of every problem
facing the institution, whether is a thing to fix as part of the solution or a
constraint on viable solutions.

------
DrinkWater
SAP was, and will always stay, a mystery to me.

It is ridiculously expensive and complex. I know that the problems it aims to
solve are also highly complex and very specific, but reading stories like
this, plus (if you live in Germany and work in the IT industry) sometimes
hearing unbelievable stories from your peers, it always confuses me that
companies still want so much SAP.

In the late 90s/early 00s a lot of people had seemingly infinite trust in IBM.
Maybe the same logic applies here as well.

~~~
sparkling
I have not yet seen a SAP software that could not be replaced with a homemade
Django/Rails web app (90% CRUD) and some external API integrations to other
services that may exist in the company such HR, invoicing etc.

Of course, at the fraction of the the cost of the SAP solution.

~~~
brohee
OpenERP is not Django based IIRC, but they basically thought the same thing
and went at it with some good success.

~~~
rbanffy
I seriously doubt OpenERP has the same scope as SAP. It works for smaller
structures but, like mentioned before, if your operations cross too many
national borders, things get insanely complicated really quickly.

------
patja
I was a project leader on a successful SAP implementation at a DOW 30 firm
back in the 90's. This was a third attempt at it, and I think I may be one of
the only people who was on the team for attempts #1 and #2 which failed.

One of the simplest things an SAP implementation team can do to promote their
success is to strictly limit the number of ABAP developers on the team.
Developers are going to develop and while some customization will be needed,
with a team of 10 or 20 ABAP developers you are going to generate way more
customizations than you will with only 3 or 5 developers. Resource and skill
scarcity will drive the discussions of "do we need this?"

More rare is that you also you need an exec sponsor at a CxO level (other than
the CIO) who has the intestinal fortitude and leadership skills to tell their
employees "we are going to conform our process to what the software offers"
rather than the opposite. Your unique methods of fixed asset management and
accounting (to take one example) are not where your company needs to invest in
being different from every other company, much as your accounting manager who
rails "this is how we always have done it because of our special situation"
will complain to the contrary unless the CFO is telling them otherwise.

------
lucb1e
Human translation (I should practice my German anyway):

Because introducing a new data system didn't work out, the Deutsche Post
(German Mail) has already booked higher losses a few years ago. The same now
happened to Lidl. The planned system still doesn't work smoothly after seven
years and more than half a billion euros in costs. Now, the discount store
pulled the kill chord.

For years, Lidl is expanding operations. The discount store from Neckarsulm
has stores in almost all European countries and is now also expanding in the
USA. A new inventory management system should support purchases and logistics
to keep track of ever more complex business. That was the decision in 2011.

System is not suitable for high-turnover countries

The software of the development concern SAP from Walldorf should be adapted to
the needs of Lidl. Until now, the system is only being used in small places in
Austria, Northern Ireland and the USA. It was clearly shown that the by over a
hundred IT specialists developed SAP version is not suitable for high-turnover
countries. Now, Lidl has stopped the project. In a paper called "Heilbronner
Stimme", an article writes to the employees that the goal is not achievable
"with reasonable effort". Until now, the project cost over half a billion
euros according to expert opinions -- for example for costly IT consultants
and SAP licenses. Now, Lidl says they want to further develop their old
inventory management system.

\---

Edit: I've never had much to do with SAP, but just today I've been applying
for jobs in Germany and two of the places (out of five or so) use some SAP
system for their online applications. The former threw a HTTP 400 and later
HTTP 500 errors so I couldn't complete the application. The latter is
currently stuck on registering: I've been waiting for the page to load for 4
minutes now. Pretty sure that one is broken, too.

~~~
sp332
What is a high-turnover country?

~~~
why-el
Just a bad translation. umsatzstarke means lucrative, so "lucrative, or high-
profit" countries.

~~~
bigpicture
In the context of a retailer, "high turnover" means that individual products
spend very little time on the shelf before being sold, and they are replaced
with new products very quickly. For LIDL that means places where they have
very busy stores. These places are "lucrative" because they are busy, but are
not at all "high profit" \- they sell products with extremely small profit
margins.

------
philipodonnell
> Software from the Walldorf-based software company SAP was to be adapted to
> the needs of Lidl. So far, however, the new system has only been introduced
> in the small agencies in Austria, Northern Ireland and the USA. It has been
> shown that the SAP version developed by over one hundred IT specialists is
> not suitable for high-turnover countries.

I realize these words are not directly from the company and I am reading them
through Google translate, but I do think they accurately reflect what makes
these implementations work or not. If you are getting into SAP and "adapting
it to your needs" then you will almost certainly fail.

Scenario: I am implementing SAP's invoice approval workflow in a company that
already has an invoice approval workflow that a former CFO designed quickly
after a problem a few years earlier. Its worked fine.

Companies who are successful implementing SAP: "I mean SAP's workflow makes
sense, is already implemented, works for much larger companies, and has no
bearing on our core business, so lets just switch to that.

Companies who fail at implementing SAP: "Lets hire some consultants to adapt
SAP to our needs"

Source: I did process flows in preparation for SAP implementations in the late
2000s.

~~~
pdpi
> If you are getting into SAP and "adapting it to your needs" then you will
> almost certainly fail.

This is a tricky topic. If you're getting into SAP and you're not adapting it
to your needs, you're almost certainly doing something wrong.

The trick is that it _has_ to be a "meet in the middle" kind of situation,
where SAP wants to be used in a certain fashion, but also allows a certain
amount of leeway — any non-trivial implementation project will involve both
tweaking the knobs SAP provides to fit the customer, and developing bespoke
components for those scenarios that SAP either doesn't cover at all, or
doesn't handle the way you'd like.

~~~
philipodonnell
Absolutely. The bar we always tried to hit was whether the process we were
being asked to change was represented a fundamental way in which this company
was intentionally different from other large companies, or whether it was just
the way it was before they saw what the SAP version looked like.

90% of back-office stuff is exactly the same between very large companies no
matter the industry or history, but that is very hard to get across to the
career accounting manager who designed those processes and now is having SAP
shoved down their throats.

Secretly, I always suspected that one reason for bringing in SAP was that the
senior executives recognized how inefficient their backoffice was but weren't
willing to force huge process changes and create ill-will for barely marginal
benefits, so they hired SAP to come in and be the bad guy to argue about it
for them. Then they can say "Yeah man, SAP sucks, soooo inflexible, I argued
against it but what are you gonna do, changing it is really expensive, I guess
we'll just have to do it their way" and message boards fill up with complaints
about how inflexible and expensive SAP is. Funny how that works!

~~~
mieseratte
> Then they can say "Yeah man, SAP sucks, soooo inflexible, I argued against
> it but what are you gonna do, changing it is really expensive, I guess we'll
> just have to do it their way" and message boards fill up with complaints
> about how inflexible and expensive SAP is. Funny how that works!

Scapegoat as a Service. I wonder just how common this is in practice.

~~~
ju-st
it's called strategy consulting

~~~
nyir
As in: It's everywhere.

------
adamdrake
One thing I haven't seen in the comments, but have observed personally is the
accounting implications and reasoning for these failed SAP projects.

Sometimes the project cannot be stopped immediately during development, even
if it is already known that the project is a failure. The reason is that some
companies capitalize the cost of the development over many years, and if they
were to cancel the project they would have to book the entire amount as an
expense in a given year, instead of depreciating it over multiple years.

I know of one company that worked on an SAP implementation for about 5 years,
when it was only supposed to take 6 months or so, and the reason was that if
they stopped the project they would have to book the entire cost as an expense
in the current financial year. The exec team, who had financially-based
bonuses, weren't keen on that.

Instead the project was put together to the extent possible so that it could
be declared usable, and then promptly shelved. However, it was "completed" so
in theory the sunk cost could have been spread out over multiple years.

Sometimes, you just have to follow the money.

------
e12e
"SAP is the best thing that ever happened to computer people. It appeals to
businesses that are too stupid to understand and model their own processes but
too rich to simply continue relying on secretaries and file cabinets." \--
Philip Greenspun:
[http://philip.greenspun.com/panda/future](http://philip.greenspun.com/panda/future)

------
woodpanel
In Short: Lidl’s legal team messed that one up.

In defense of ... well actually I don’t know whom I defending here, but what
is undereported by German media in this case is “Scheinselbständigkeit”. The
remainder of the story then fits the common narrative that developers share
about SAP (look, enterprise software in action) and consultants (all overpaid
underperformers).

“Scheinselbständigkeit” is a legal term, translatable as “fake
entrepreneurialism” and a common problem for German IT freelancers and
contractors because it basically states, that you aren’t a freelancer if you
serve one client exclusively for more than 6 consecutive months. This could
result in huge fines for you but more likely your client as you become
retroactively an employee of your client which in turn must pay social
security for the years you served him.

It is still a vague term though and in result causes a giant legal grey area,
which in turn results in each sector copying what its dominant company’s legal
team declared.

For Lidl this means that in the middle of this project, they just happened to
fire all of the freelancers.

You can imagine the impact: the most capable and experienced developers had to
be replaced with inexperienced freshmen or stuff had to be outsourced to
agencies staffed with inexperienced freshmen.

~~~
acdha
Any idea how much the savings was that they risked a 500M write-off to avoid?

~~~
woodpanel
Nope, but from what I hear the systems are old, organically grown complex
systems (see other commenters here that worked for/with SAP and shared their
story). I doubt Lidl can quit on SAP altogether, it's rather the question of
how to achieve the business goals with SAP in use.

~~~
acdha
Seems like all the more reason to hire a couple more employees than trying to
save an infinitesimal amount playing games to pretend that they’re contractors

~~~
woodpanel
Why should freelancers be forced to become employees? And how is Lidl supposed
to find suitable candidates, if - as I said - the most capable and suitable
ones, are freelancers?

~~~
acdha
Who said anything about forcing anyone? The problem described was LIDL sacking
a bunch of people who had worked exclusively for them for 6 months and
presumably would have been happy to continue doing so, except that LIDL would
have had to pay a little more tax.

Also, if you can’t find people to hire for a mission critical system, that’s a
strong sign that you either need to not make it critical or start aggressively
investing in training — which is still considerably cheaper than a 500M write-
off.

------
tonyedgecombe
Years ago I did some contract work for a company that was being taken over by
a competitor. The consensus in the business was that implementing SAP had
weakened the business so much they had become an easy target for takeover.

~~~
solarkraft
Do you know details about the implementation? Did they try to customize
everything?

~~~
tonyedgecombe
I was only involved on the periphery so I'm not sure. I do know they had an
army of consultants working there so I imagine so.

------
throwaway_2q121
I've been working in this field a bit, not the big two SAP/Oracle but a
smaller ERP(PAAS/SAAS) player. Our solutions manage a few steel plants in
Slovenia.

The way I see it is that it's tough, solutions are rarely chosen based on
technical merits. It's a mix of "nobody gets fired for choosing SAP/Oracle",
decisionmaker's ignorance, having someone who will be there to point the
finger at in 5 years and... politics.

The bigger the company, the harder it gets to find anyone who would know or
care what the hell is going on in the company and what their needs are. The
few cases where you can win over SAP/Oracle is when a company is cornered
because they have either failed to implement one of the big player's solution
or they are out of money so they have to "compromise". IMHO having to
"compromise" has turned out _very_ well for some. The level of customization
that we did would be very hard or impossible to achieve with SAP/Oracle.

~~~
bigger_cheese
The Steel plant I work at uses SAP, though personally I don't touch it and
only know vague details about it.

I know all non-routine maintenance, mandatory inspections, contractors and
warehouse supplies etc is booked in it. Stuff like fire extinguishers,
elevator mechanic call outs for breakdowns, replacement hydraulic fluid stuff
like that is done via SAP. I think even general 'consumables' stuff like toner
for printers in offices / control rooms, fluorescent light tube replacement
etc are managed by it.

When you think about it these systems are horrendously complicated.

------
spsrich
My wife worked for a large law firm that decided to standardize on SAP. That's
sensible - there are loads of legal practice management suites out there that
are designed to cope with the peculiar demands of legal billing - so let's
ignore all those and buy a product that doesn't do it, and spend millions
adding customization to get what we want.

Of course the project was killed after 3/4 years and millions spent.

A good thing for SAP that in the large firms they target, mediocrity floats
upwards!

------
callesgg
My personal experience is that the SAP software is ok but it suffers from it’s
old outdated architecture.

The main problem is not the actual software it is the people who implement it.

Sap as a company has no control over the implementors. The implementors don’t
understand how the software is intended to work.

I can compare it to Samsung Android vs Google Android.

~~~
fullstackchris
This is the most realistic answer here. SAP is legacy software. Any company
that has been using SAP since the 1990s is still probably running parts of
software that were written around that time - or even earlier (!)

Actually, this leads to the same types of problems that everyone is discussing
here over 'customizing'... at the root it is a collision of ever larger
growing global companies with ever-increasing complex process that must rely
on older and older code (or customizing) bases, because stopping everything
and doing a total overhaul just isn't feasible at such scale.

Every custom program or customized process brings rise to a future risk of
headaches/breakages when the system is upgraded, a process is once again
changed, or something should be added to the process.

I guess the best analogy I can think of as an ABAP developer, is that it
sometimes feels like running on a treadmill that just keeps getting faster...

Someone commented above how IBM used to be the company that was infinitely
trusted... and indeed, SAP itself as a company is certainly not at fault, but
until the environment changes with SAP customers and all their custom code and
processes... I guess only time will tell...

------
mosselman
This is so unacceptable yet happens so often. Here in the Netherlands the
government has several projects that failed with costs amounting to hundreds
of millions. For sums as these any Organisation can just setup a more capable
development company that could handle all of the internal projects and its
developers could be top of the line.

~~~
lagadu
The thing is, yes you can set up a new company and make a new product from
scratch whose requirements are exactly defined by you and after a few years of
work they'll have a working product. Then what? You'll still be running the
same software in 10 years, are you going to keep paying an entire company's
worth of employees during those 10 years so they can hang out and be ready to
implement all the changes you'll eventually need, to fix bugs and provide
support? The costs of that would be far higher.

Most non-enterprise people don't get it (as seen in this thread where most
people are only taking into consideration the cost of development): In a
software suite's lifecycle, the initial implementation cost is nothing
compared to the total cost until sunset.

Application lifecycle management (or product lifecycle management in a broader
context) is a hugely important thing for a corporation that plans on existing
for more than a couple years.

~~~
mosselman
There is never just one project. So these employees can keep improving the
original project and create new ones. Do you think these consultants will do
all that maintenance? Many projects fail before release and others just last
for a few years. A government owned software department would be a great way
to save money and improve all aspects of the application life-cycle.

------
raverbashing
Well at least they pulled the plug and didn't go bankrupt like Target Canada

~~~
fps_doug
That's what I thought. I have direct experience from two companies who wasted
a shit-ton on SAP, and pretty much everybody who had to deal with it was happy
afterwards. And I'm not just talking people being grumpy because they had to
get used to something new. Often used processes became much more complicated,
logic flaws were introduced (I witnessed someone breaking into tears a couple
weeks in).

One of those companies also wen't bankrupt a couple years later. They weren't
doing all too well before either, so wasting a huge load of money on a system
that basically makes your internal processes grind to a halt probably didn't
help.

Hearing that you waste half a billion on this really makes me wonder if it
isn't much more practical to just develop custom made software in house.

------
Shihan
This reminds me about my apprenticeship, which started near the year 2000.
Worked in big swiss retail company (comparable to Lidl, but much lesser in
size). They already had SAP R2 and AS400 (IBM?) and wanted to migrated to SAP
R3... well they finally did, but it took many (5-6) years and it also cost
millions, if I remember correctly 60 millions. The headquarter who consisted
of two houses with each 4 floors had at least two of the 8 floors packed with
external SAP consultants. In 2005 or 2006 the company had to sell one of its
sub companies after the other to get more money and the whole group was
finally sold to a German competitor (I think they use also SAP R3 :-) ).

------
Roxxik
minimally corrected google translation of the (short) article:

Lidl is wasting 500 million euros

Because the introduction of a new data system did not work out, Deutsche Post
already had to record a high loss several years ago. The same thing happened
to Lidl. After seven years and costs of more than half a billion euros, the
planned system is still not running smoothly. Now the discounter has pulled
the ripcord.

Lidl has been on an expansion course for years. The discount store from
Neckarsulm now has branches in almost every country in Europe and is now also
growing in the USA. A new merchandise management system was needed to easily
keep track of the increasingly complex business processes and to control
branches, purchasing and logistics. Therefor the decision in 2011.

System is not good for high-turnover countries

Software from the Walldorf-based software company SAP was to be adapted to the
needs of Lidl. So far, however, the new system has only been introduced in
some small agencies in Austria, Northern Ireland and the USA. It has been
shown that the SAP version developed by over one hundred IT specialists is not
suitable for high-turnover countries. Now Lidl has stopped the project. In one
of the newspaper "Heilbronner Stimme" present letter to the coworkers it is
said that the actual "goals" are "not reachable with justifiable effort". So
far, according to expert opinion, the project has consumed more than half a
billion euros - for expensive IT consultants and SAP licenses, for example.
Now Lidl wants to further develop its own inventory management system.

------
gadders
My previous contract PM role was working in HR on a SAP contract. I'd never
come across it before and it's very strange. The thing it reminds me most of
is Lotus Notes, in that it has its own specific vocabulary and the whole
system is stored in its own database.

Screen are rarely referred to by name, but have weird codes like XQ44 and are
ugly AF. It also has a whole bunch of utilities for fixing up the referential
identity on records, importing data etc.

------
syntaxing
Anyone have a good recommendation for SAP alternative for small medium
businesses (SMB)? All the companies I work for use something equally
convoluted like Oracle and SAP. When I worked at a startup, I debated for a
long time which ERP/PDM system will be the most effective (which I never
answered).

~~~
berns
Odoo, which is open source (python and postgresql).

[https://www.odoo.com/page/compare-odoo-vs-
sap](https://www.odoo.com/page/compare-odoo-vs-sap)

------
_Codemonkeyism
Many (article says 100) consultants with xK$ per day runs up 500M fast.

~~~
antpls
My model is basic, but at $1200/day per consultant, with 100 consultants,
that's still about 4160 days, or about 11 years. Not what I would consider
fast.

~~~
patman81
One way to calculate: 7years × 365days × 2k/day × 100 "experts" = 500m

~~~
thinkingemote
People don't tend to work every day in a week, and there are holidays etc.

------
spsrich
Oh wow, a SAP rollout that went wrong! That never happens !

------
singingfish
My thoughts on this having worked in a team doing an ERP (think SAP lite) and
now working in a sap shop (my job often involves avoiding interacting with SAP
to the maximum extent possible):

ERPs are hard. ERPs are not software for modelling business processes, they
are software for creating software that models business processes. And at the
next layer you have all of the shortcuts that the vendor and the customer took
during getting something that works out the door. Which happens a lot, at both
levels. This is of course a recipe for fun interesting times with lots of
billable hours.

------
fargozzi
Problem is that many companies when starting SAP implementation ending up
building their own ERP on top of SAP. And that is ridiculous waste of money.
From my experience that is mostly due to internal company politics and lack of
IT management skills.

Just one example : we had a big implementation in the big region where
Implementation manager for SAP introduction was originally from. He was
approached by some factory director and asked if we could change the standard
process as "You know we have these guys working for years and they are not
very adaptive for changes..let's make it easier for them, will ya?" And
Implementation manager agreed. "As ERPs come and go, but connections and
people stay there". So it took 3 consultants + 2 developers three months to
rework the process. It later was not working perfectly, so many bugs and
enhancements(as these guys couldn't stop asking for more changes) caused more
money spent in support.. And it's just one episode in several years long
implementation cycles.

On other hand I had very smooth implementation in TOP 50 company. But for them
it was not only to implement as software, but also to audit their internal
processes and to eliminate waste. There dedicated Implementation Manager
started introduction to SAP with words: "We are Columbus, SAP is as ship which
will bring us to America. And wont be easy, but I hope you will all jump on
this ship otherwise we will have to leave you..".

SAP ERP is made for standardizing and simplifying processes, so just don't
invent light-bulb every time you need a light in a room.

------
osrec
That is an unbelievable amount of money to waste on a cancelled project. It's
funny how these turn into an ego thing for the project owner. If the person in
charge has good links and reputation, they can keep getting funding year on
year, even when the project has gone bad. Usually they are good talkers, but
bad executors and have been at a firm for a significant number of years (so
people think twice about firing them because of the severance package alone).
I've seen this at every investment bank I've worked in, with projects racking
up GBP 40m in spend before getting canned. I suppose it uplifts the GDP at
least...

~~~
lowkeyokay
I think it has to with peoples inherent lack of discounting sunk costs. “We
have already spent X amount. We must make sure it isn’t wasted, so let’s spend
Y more and see if that’ll fix it”. At least they pulled the plug.

~~~
vertex-four
It often isn’t clear that spending Y more won’t fix it, or that spending Z on
a new project will - by the time you’re anywhere near half a billion euros
into a project you’ve already worked around an incredible amount of unforeseen
issues, lost cultural knowledge about them once they’re fixed, and there’s
every chance that those issues (or more) will show up again if you start from
scratch.

------
mercatort
I have worked in three organizations that used SAP. All three had problems and
the high sunk costs made it hard to move elsewhere. I think a good way to
measure theefficiency of the systems is to call three random admins or
secretaries at an institution. In my experience, everyone complained about
version incompatibilities, speed, logic (I got to see the UX once, it was a
nightmare).

I would estimate using the SAP systems costs about 10% of productivity (net
after gains through digitalization of processes).

------
psihonaut
www.DeepL.com/Translator of the article:

Problems with new data system: Lidl blows 500 million euros

The Lidl brand plate at a branch. Picture: BR/Herbert Ebner

Lidl has been expanding for years. The discounter from Neckarsulm now has
branches in almost all countries in Europe and is now also growing in the USA.
A new merchandise management system was needed to provide an easy overview of
the increasingly complex business processes and to control the stores,
purchasing and logistics. That was the decision made in 2011.

System is not suitable for high-turnover countries

Software from the Walldorf-based operating software group SAP was to be
adapted to Lidl's needs. So far, however, the new system has only been
introduced in the small agencies in Austria, Northern Ireland and the USA.
This has shown that the SAP version developed by more than a hundred IT
specialists is not suitable for high-revenue countries. Now Lidl has stopped
the project. In a letter to the staff of the newspaper "Heilbronner Stimme" it
was stated that the actual "goals" could not be achieved "with justifiable
effort". Experts believe that the project has already cost more than half a
billion euros - for costly IT consultants and SAP licenses, for example. Lidl
now wants to further develop its old merchandise management system.

~~~
w23j
That's a golden machine mistranslation:

 _In a letter to the staff of the newspaper "Heilbronner Stimme" it was stated
that the actual "goals" could not be achieved "with justifiable effort"._

That's like management was: "What the hell, the memo gets leaked anyways.
Let's send it to the newspaper directly."

------
auvi
Honest question: how do people go about learning SAP?

~~~
lurker456
Join a SAP customer or SAP integrator. At a customer you'll normally get sent
on several multi week training sessions. At integrators you'll get some PDF's
and be thrown in the deep immediately. As a junior, the pay is bad, so be sure
to move on quickly, don't stick around at the same position (this is the
norm). After 5 years or so you should have multiple certifications, a few war
stories to tell and the contacts to become independent.

The IT part of SAP is quite small and easy to grok if you have CS training,
what you will learn is mostly SAP specific terminology, the details of the
business process(es) you're working with, learning to work with outdated
software packages and learning to work around people in an IT role who have no
interest (or skill) in IT.

------
baxtr
What I came to realize after reading all these insightful comments is this:
whenever a company buys SAP, they also buy an ERP or whatever system but, most
often, they buy first and foremost safety. Safety that everybody else is using
the same system (social proof). Often this includes the personal safety of the
CIO for not getting fired if anything goes wrong...

------
Annatar
The article says that in the end, “Lidl” decided to ditch “SAP” and continue
developing their own, internal solution. From my own experience: good on them;
it’ll certainly cost them an order of magnitude less, on the order of five
million, to get it going again and then maybe 750 grand a year for the staff
salaries. Good on “Lidl” for going back to classic IT.

~~~
lagadu
> and then maybe 750 grand a year for the staff salaries.

That is completely unrealistic, it arguably won't even cover the operations
teams that you need to have in place for keeping it running and the teams for
maintaining and updating the software are going to be a lot more than that.

~~~
Annatar
Even two good full stack, experienced system engineers are enough, and their
combined salaries won’t come anywhere close to 750 grand a year. Hell we could
engineer you high performing, high availability infrastructure around it for
just several grand, and you won’t find any of the usual enterprise garbage
like DELL/hp/Cisco/hardware RAID/SAN in the delivered solution because we
design our own systems from bottom to top for performance, reliability and
economy. Are such people hard to find? Yes they are, but it’s clear why.

A colleague and myself handle many such applications by automating the living
daylights out of everything around them. I just finished SAS integration
system engineering project, fully automated. Two weeks’ worth of work which
took the previous engineer six months non-stop. 750 grand was a generous
overkill.

------
dz0ny
Relatable unrelated
[https://www.reddit.com/r/kubernetes/comments/8v9qxo/bare_met...](https://www.reddit.com/r/kubernetes/comments/8v9qxo/bare_metal_k8s_clustering_at_chickfila_scale/)

I bet the problem was at scaling/updating system on individual locations
because I heard about the similar problems in small remote groceries/shops.

------
amelius
Could we at least see some of the main requirements of this system, so we know
what we are talking about?

------
_pmf_
In Germany, they could have sustained a team of 100 developers for 100 years
(at 50000 EUR salary).

~~~
Annatar
Sure, but that’s a small salary, even for Germany.

~~~
TurboHaskal
You'd be surprised. I don't know many devs earning >60k.

~~~
qualsiasi
I honestly thought that average was 60/80k

~~~
bflesch
I've hired many devs in Germany, if you pay less than 60k you get very bad
ones.

~~~
virtualized
TIL I am very bad

~~~
swimnswim
haha you cracked me up!

// or underpaid ;)

------
jankotek
SAP introduction starts with documenting organisational structure, processes
and many other things. That can be used outside of SAP...

------
mohaug
Similar ERP implementation cancellation after spending 1bn

[https://www.computerworld.com/article/2493041/it-
careers/air...](https://www.computerworld.com/article/2493041/it-careers/air-
force-scraps-massive-erp-project-after-racking-up--1b-in-costs.html)

------
bryanrasmussen
I think if you're going to link to a non-English story you should either find
an English version of it and link to that or host a translation of it
somewhere yourself. This after all is why I have kept from posting some
interesting Danish content.

~~~
eastendguy
As a HN reader, I would ask you to _do_ post Danish content, or in any other
language that you know. There is so much more info on the web that is not
available in English. And once we know about, Google translate helps to read
it.

