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LIDL cancels SAP introduction after spending 500M Euro (br.de)
341 points by wohlergehen on July 16, 2018 | hide | past | favorite | 224 comments

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.

> 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.

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.

>Most companies aren't that unique in how they execute most processes

As a current "big expensive system" consultant (not for SAP, completely different company and line of work), I 100% agree. Every single client I've worked with has shown me a network diagram and with a grin asked if they're the most unique company I've ever worked with. The answer is almost always no. There's just not that many unique ways to do things, and it always comes down to two or three very similar processes done by two or three very similar pieces of software done in almost exactly the same way that produces almost exactly the same result.

The only thing that sets "unique" companies apart is a lack of culture, or a negative culture. Like you said, bad processes that could be re-engineered into good processes if only the company was able to be honest with itself. Unfortunately changing people and process is harder than changing technology and vendors, so if something doesn't fit perfect you just throw away hundreds of millions of dollars, throw a fit in the press, and never address that your company culture is so inflexible that no major project involving an outside vendor could ever possibly be a success.

> 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.)

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.

> 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.

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?

> 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.

> It was $110m down the drain on the first product

What happened afterwards? Did this trigger management to consider why the purchase was the wrong one? I.e. was it a $110m lesson? Or was it really wasted money?

The $110m spent on the first product was the cost of the product plus the consultant time to implement it. Both of those were sunk at that point and could not be refunded. The decision was made that Product A was not working for the company's needs, and listening to the engineers, the executives decided to switch to Product B. The blame went to Product A and the company that makes Product A, because it's pretty fashionable to hate them right now. "The product is outdated, it's inflexible, it's not able to be customized" and so on. Product B was brought it and it's so much more flexible since it includes absolutely nothing out of the box, so more money was spent on custom development to build the batteries that Product A includes by default.

My company did cut a deal on the consulting for Product B since we had already been working for them on Product A, but the products were charged at full price and to my knowledge none of the cost of Product A was returned to the customer.

As far as management was concerned, Product A was a failure because it was old and inflexible. Management was super happy to see every screen of Product B with their logo on it, which we put on there because we had to develop those screens from scratch anyway. Product B didn't have their logo in the upper right corner, it only had their logo on the printed output.

The only lesson learned was "ask your engineers what product they recommend", which I guess is an important lesson regardless.

Thanks, extremely insightful. I've never worked on projects worth more than, say, 5 million euros so these 100+m projects have a sense of scale that's hard to comprehend.

Each problem have got name and surname

> selecting a solution that was a poor fit for the problem

In the specific case of SAP, if the problem is "we want to automate our processes" then it's probably a horrible fit.

If, however, the problem is "we need good automated processes", then it can be a great fit.

Yes, that's what I meant - they're not unique. Sorry for the typo :)

No, your company isn't special. Look at it from an engineering perspective. The law, by which I mean all laws that you operate under—local, regional, state-level, federal, international alike—is really not much more than a specification that you have to adhere to. More active markets and more rules and laws you're bound to just means a more complex set of specifications. Just like in the software world, we need a process, an implementation to adhere to that specification in order to do business by it. And at the end of the day, if two different implementations are compliant to the same specifications, the complexity of moving from one to another is always going to be minimal. One particular caveat is even similar to software engineering: if you're doing special, non-standard stuff outside of the spec, you should probably not be doing that at all.

This is a fun analogy, but in the world of enterprise-level business, the business often is software. Entire businesses today are ran by software, and that software is written according to the same set of specifications: the law. The small particulars that don't have to do with law or common business practices are pretty much reducible to implementation details.

SAP is one such very comprehensive implementation, that is very possibly the only software suite that has a nearly full coverage of the entire "spec" for business purposes. If you can't translate your business operations to SAP, beg your pardon for my abrasiveness but you're doing things wrong.

The space of possibility within the confines of law is very large.

This is true, with the caveat that most points are clustered. It is possible to translate from one point to another (the "one SAP true way", for instance) within this space by re-engineering processes. Parent's point is - this is easier than most people assume - especially those who say "our business is unique"

Something I learned in ERP 101: Don't customize software to your process unless the process is your competitive advantage.

Excellent response - couldn't agree more!

Competitive advantage is rarely in processes that a company is trying to replace or automate with third party software.

^ this.

Coca Cola does their financials the same way Pepsico does. Yet both companies have tried to implement them in unique ways and subsequently have cost them a great deal in terms of IT implementation costs that offer little to no competitive advantage.

potentially harder to poach people from the competition if you're both doing generic stuff but using proprietary, custom and opposite techniques?

That's a justification for writing an ERP in Brainfuck.

There is a bit of uniqueness that companies actually have, and the rest of “how we do things” and “what our processes are” is basically a symptom of inertia and - how the last system worked. It will turn out that every process and every structure is influenced by the system that is used. They are one. So the idea of customizing a business system to fit a business doesn’t exist - in reality it’s often customizing it to fit whatever the last system did (to processes and structures), which is something else, and not nearly as great sounding an ideaas “tailoring a system to our unique business” The key is to identify what parts of the process are “how we always did things, but for no apparent reason” which probably turns out to be a lot of things. It’s painful because it causes a lot of turmoil when everyone has to question every process. But it’s good pain.

I’m strongly agreeing with the GP: it’s both better and cheaper to at least meet half way with software like this. It’s simpler to change processes than to customize business systems.

What becomes painful is that the deployment of some new business system now became a massive reorganization and a complete overhaul of all business processes. But this is still less painful than customizing SAP to any large degree.

Frankly doing an SAP installation with no customization is no different than using a SaaS platform, there are a lot of options, but no code customizations.

All the processes had become "unique" over time, not because the company was special, but because they were coding their own solutions and either the IT staff or the business wanted something done for the benefit of the specific department.

Once the processes were evaluated with a critical eye toward what actually needed to be accomplished, the uniqueness of the existing process couldn't stand up to scrutiny.

Luckily the CIO and the CEO had the courage to face down the IT staff and business leaders, the rank and file cheered for adopting standard processes, they knew the existing processed sucked.

The book Softwars spends a lot of time on this topic, where Larry Ellison blasted all of his integration partners for over-customizing their solutions when the correct approach was to update the business processes to match the software:


So, let's say you manage to update your client's processes to the ones that best fit the SW you are selling. Eventually, the time for upgrading will come. Magically the specification for the new system will be: "it has to work exactly like the last one", and the last one will naturally happen to be yours.

Who wins? The customer? Maybe (how clumsy it may be, he now has a stable, supported process, after all). The vendor? A thousand times this: he has successfully locked-in yet another client, foraging on its inertia.

I make custom systems for a living, I also support a CRM/ERP solution for SciFi conventions which often has custom enhancements for customers.

The real answer is to meet in the middle - sometimes the you have to be willing to tell the customer no - its just how it goes - and sometimes you need to go back and bang on the developers to go get it to work the way the customer thinks it ought to, because the customer is correct, and the devs do not understand the use case.

The key is, dont tell the customer no too often, and dont bang on the devs too often - you gotta strike the balance, and only experience can tell you where that magic line is.

Agreed - great comment

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

A lot of these larger software packages support different levels of customization, and they usually press people to use the simplest stuff.

It's not completely possible to guarantee reliability once the customer is writing their own code. You can guarantee the app doesn't fall over, and data isn't lost, but ultimately the customer is free to shoot themselves in the foot, and they will.

There's usually some happy or at least less unhappy middle ground.

Yes, businesses often have unique needs and sometimes they're so unique and so critical that they're worth heavily customizing for.

On the other hand, I like telling a story from not that many years ago when a very small business (I'm talking like 10 people) wanted to get off running their own Exchange server. Exchange made sense when they set it up but Gmail and the like had come on the scene since.

The CEO eventually had to mandate it because the person who ran the business side of things was incredibly strongly opposed because they were used to storing emails associated with contracts in a hierarchical folder structure and, at the time, Gmail didn't support nested labels.

In that case, change how you do things to match the software was absolutely the right answer.

Every company think it's special

FTFY. There's huge benefits in using standardized solutions, like faster upgrades, and fixes to bugs you even didn't know you had but that were solved for other customers.

Yes, every company is special. That doesn’t mean your company has any valid justification for being special, instead of adhering to standards that business technologies can be targeted toward. Most ways that companies are special are just ways that those companies are broken. (Calling to mind the classic “Happy families are all alike; every unhappy family is unhappy in its own way” quote.)

Look at it like any other utility infrastructure: if you want your factory to hook up to the same power grid as everyone else, it’s your factory that’s got to change, not the power grid. Or do you want to spend half of every new factory bring-up winding your own three-phase-220V-to-five-phase-39.2V transformers to meet your “unique” needs?

> Every company is special

A company must consider whether its business processes are a competitive advantage. In well established businesses, chances are they aren't. In that scenario, it really doesn't make much sense to stick with them.

I think Martin Fowlers remarks on customization are illuminating. https://martinfowler.com/bliki/PackageCustomization.html

This pretty much applies to _all_ software development as well, especially in a standard environment like ERP. There is not much need for new stuff, just learn the ropes for what already worked the last ten years, then handle the complexity of enterprise life with simply applying them. Creativity is only useful if you can handle >90% of the cases with ease already.

And for a customer of enterprise software I would so much agree. In my experience the people who manage the integration with third party software usually have no clue what the software is about. Instead of being arrogant it would be much smarter to learn from the software vendor, who's an expert in his field and has seen dozens of customer environments, how to solve certain problems.

I wish you worked for my customers.

I’ve rolled out SAP throughout all three of our SME-sized family companies. My mantra has always been ”we don’t install SAP into our company; we mould our company into SAP”. Ten years in and the strategy seems to have worked.

>we mould our company into SAP

exactly. People from "unique" camp fail to recognize that SAP isn't just software, it is "best [business] practices" coded into that software, the practices distilled from huge experience during many years with many customers. Granted, for many techies any business practices/processes and related software look disgusting - this is why we're techies, not accountants. At some point in the bright future we'll develop super AI which will take over the world and abolish business processes....

The psychology is fascinating. I worked at a place with a heavily customized fork of a vendor system which was almost old enough to drink. They had a stable of developers in an increasingly uncommon language, upgrades were year+ exercises with hefty consulting bills, etc. but most of the management were convinced that this was the easiest option because everyone was used to it.

Do you think enterprises can even profit from adapting to SAP‘s structure (streamlining etc), or do you think this does not matter anyway?

Sap brings transparency to the processes inside your company. You don't know what is happening in the mind of you accountant on the other side of the World. How bills are issues and if these are payed correctly and in-time? How do we choose credit control, who is approving purchasing spends? Internal and external audits could not see whole picture and they are not there all the time and even more - if someone would like to hide something from them it could be easily done in most cases.

The profit is in having the ability to upgrade on a whim, to refer to the masses of documentation and expertise without having to translate it into your own lingo and to use off the shelf components without needing to customise them too.

Ok, so no organizational benefits?

Perhaps you need fewer people maintaining those business apps.

Plus hiring and getting new employees up to speed is much much faster. This is especially useful with SAP consultants who are quite expensive. The initial cost may be high but once it's done it's savings at every step.

Well, adapting one‘s processes to a standard solution is a major change in your business, so I‘d expect some kind of effect..

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.

Former SAP employee here, who btw, is very critical of SAP. I also happen to have worked in Escalation Management at SAP, who's prime responsibility was to take SAP projects that were about to go south and put them into "escalation" before they the hit newspapers.

Let me try to explain the mystery around SAP.

1. Most of the situations where SAP projects go haywire is largely due to (a) incorrect implementation by the service integrator and (b) challenges between business processes and systems support for those business processes. Sally in accounting wants to see sales per unit for the Germany promotional rollout, while Karen in marketing wants to see overall sales for 100 store locations in both Germany and Netherlands. The NL's retail stores don't split out VAT because their POS systems don't allow you to do that...etc etc. You can see where this is going...

2. Implementing ERP at the global level is incredibly complex. There's this idea (especially in the HN circles) to just "throw SaaS" at the problem, but it's not that simple. If you haven't been involved with an implementation at this size, it's not worth discussing. It's a wonderful hodgepodge of culture challenges, project management methodology clashes, and misalignment of strategy.

3. Yes, no one ever got fired for hiring SAP, just like they did with IBM. This is obviously changing, but still has some truth to it (see next point).

4. Honestly, being a CIO of a global F500 company absolutely sucks. If you try to stick your head out and do anything innovative and it fails, your axed. Many CIOs simply go into turtle mode - protect the budget you're given by the CFO and just don't f anything up. A CIO who choses to build a custom ERP and fails will be fired 100x faster than one who uses a packaged solution and it fails.

5. What's the alternative? Oracle? At this level, they're all the same (ok, not totally true, but generally accurate).

Happy to answer any questions...this area is unfortunately/fortunately close to my heart.

Thanks for sharing, great insights there!

How do you see the chance for classical “low-end disruption” like Christensen described? i.e. small players buy small solutions because they’re cheaper and have less scope. Then larger companies start using the low-cost software etc.

Just look at Concur, Fieldglass, SuccessFactors, BusinessObjects, etc

All were acquired by SAP because SAP can't do SaaS right and filled specific product areas of ERP.

SalesForce is also the greatest example of someone who started fairly small scope (small team CRM) and moved into bigger scope (enterprise CRM + enterprise application platform development).

Seems like Concur has been suffering under SAP based on the outages I keep seeing.

Great insights. Are you seeing startups that grow into multi-nationals adopting SAP? or are their smaller system growing up with their needs? E.g. what does Google, etc. use for ERP?

Google had NIH syndrome to a rediculous degree. I don't know what they use for ERP but when I was there, external software had a shelf of just a few years before a Google engineer was sufficient annoyed to write a replacement in his 20% time.

Amazon is home grown.

Apple is definitely a big SAP shop.

Honestly don't know the others, but I would guess SAP/Oracle (and very likely under very strict NDA).

> 5. What's the alternative? Oracle?

I don't think it's possible for software to suck worse than the Oracle E-Business Suite expenses reporting software.

All enterprise software suck at one function or another.

In expense reporting, at least, sucking really badly reduces the amount the company needs to reimburse ;-)

Not quite. I have worked with sap at many different clients. Some Reasons for buying SAP ( by that i mean their ERP as well as funxtional or industry specific tools and applications.) are as follows

Scale: at this size, you pick SAP or Oracle. There's very little else out there in the market.

Proven implementation: speaking for most clients, you cannot get a major ERP implementation done without outside help. You will turn to either the vendors or major integrators. You will then ask them to give you advice and prove their expertise. They will give you a list of prior successes, which is in my sector always going to favour SAP as Oracle have a bad track record. You will then pick the system and configuration and maybe even architecture they are recommending.

Industry Expertise: SAP, in many industry sectors, know their shit. You can try making your own tools, you can try pulling 20 different apps together to get the functionality you want. But that increases cost, complexity and often violates architectural principles. So you just buy SAP and all the modules, because they have every possible business process mapped out, data structures configured, suppliers and product catalogues ready to go, etc. Oracle has this too, but fewer products support or integrate well in my limited experience.

Of course, SAP isn't without its issues or drawbacks, but i have consulted with clients across many projects including the initiak upstream business cases, and these are often the key deciding factors.

I've used some SAP-based solutions a few times and the closest experience I can relate it to is late 90s MS Access applications: Everything takes ages. Things that should be easy and quick (e.g. viewing a related record or item) are often difficult and take time. Every form of search function doesn't really work, even with perfect input data. Searching doesn't work if your input is slightly off (e.g. names in wrong order or a typo). Searching takes much longer than makes sense in any sensible manner.

Of course, user's experiences don't matter when selling or supporting a software like this. I don't think it's part of the decision maker's conscious that usability (in the sense of being able to accomplish tasks efficiently) for a software that will be used by a larger part of the corporate workforce might be important not only for the employees using it, but also for the company. These systems can eat up so much work time of employees and create so many issues within a company and in customer or supplier relations...

One of the reasons companies adopt software like SAP is to replace process expertise with software. If a highly paid process expert accomplishes a task in half the time a poorly paid person accomplishes the same task with SAP, SAP wins if the poorly paid person makes half as much as the well paid one.

Also there is a question of scalability - the supply of smart people is limited and depending on smarts is risky. Hiring people that may even be smart when that's not required and that can't do any damage because the software prevents them from doing it will scale better than having to hire only smart people to operate more flexible software.

> One of the reasons companies adopt software like SAP is to replace process expertise with software. If a highly paid process expert accomplishes a task in half the time a poorly paid person accomplishes the same task with SAP, SAP wins if the poorly paid person makes half as much as the well paid one.

Assuming SAP is free both to license and implement. From what I've heard of SAP installations, that's rather far from the normal case.

It really depends on your scale. If you replace a thousand people who earn a thousand more than their replacements, you made a million right there.

> If you replace a thousand people who earn a thousand more than their replacements, you made a million right there.

Well, no, doing some quick research, because SAP annual license costs are substantially > $1000 per user, you've lost something like at least half a million and potentially several million in that case. Just considering license fees, and not other SAP-related costs.

What SAP and Oracle have in common is that they have a very capable sales force, that is able to convince companies that their business case will fit nicely into their model.

Then, once the implementation is ongoing and it turns out that there are some corner cases which were overlooked and that don't fit into the SAP model at all, SAP has another option available: hire their expensive consultants. Depending on how locked-in they are and how big their projects, this can completely destroy some companies.

Do you know of any case studies of companies being completely destroyed by this process? I have certainly heard of such projects getting into trouble, would be interested to know of any cases where it went as far as the customer going bankrupt.

I witnessed one myself when I was working as a consultant. It was a hospital that chose SAP to automate its invoicing system. When the implementation got stuck, the hospital was unable to send out any invoice for almost a year. In the end the money was finished and the government had to jump in and take over.

It is true that the management of the hospital made some big mistakes, but on the other hand it was SAP's sales team that had been very good at giving them opportunities to hang themselves.

Interesting, there must be a good reason for not going back to the old system or a manual system. A year is a long time without Billing and plan B

I've read that Target's botched expansion into Canada was largely attributable to SAP being awful. They haven't gone bankrupt, but years later their stock is still reeling.

There were all sorts of problems with Target's expansion into Canada, I'm not sure you could blame them specifically on SAP:



The data entered into SAP was riddled with errors, it sounds like a great example of "garbage-in, garbage-out".

My understanding was that the land Target used in Canada for their stores was leased to them by Walmart (who happened to own it for some reason, even though most of the lots used to be Zellers stores, and Eatons before that.) Walmart gave them extortionate prices and conditions on their lease.

They essentially choked their nascent competition in the Canadian market out of existence in the very same move that enabled the attempt.

From the first:> Shane Co. signed a contract with SAP AG in 2005 for a "highly sophisticated point-of-sale and inventory management system," with an original projected cost of $8 million to $10 million and a one-year rollout schedule, the filing states. But costs ended up skyrocketing to $36 million, and the implementation stretched out to 32 months before the ERP system eventually went live in September 2007.

Does anyone offer SAP rollout insurance?

If such a case exists, in my opinion, it would say more about the company than SAP.

As the other commenters have noted, none of the offerings in the large-scale ERP space are "good" for most measures of good, but they tend to be good enough to keep things operational. SAP is reputedly the least bad vendor in this space (we use a competing system and it is much worse).

ERPs are tedious, uninspiring, production-level software that have to deal with all manners of ill-defined business rules and variations. It's almost impossible to come up with an elegant product because the problem space itself is inelegant and in many cases irreducibly so. I imagine it's hard to attract talented developers (except those solely attracted to money) to this space because the feedback loop and intellectual payoff is so unrewarding. Most of the time the implementation problems have to do with human problems, not technical ones. Most ERP customization is outsourced to pools of fungible labor.

But when you run a large enterprise, ERPs are absolutely necessary, so someone's gotta do it.

Can't they split the project and try to introduce the tool or fail by pieces? I know management and sales wants big figures to compute a mass discount and be in the press, but in the nitty gritty, isn't it better to screw up only part of the company?

Yes - most roll-outs will do phase approaches (unclear if Lidl did this or not). A good strategy is to do a smaller country roll-out for example, learn all of the lessons and then roll it out elsewhere. It's however not a blanket strategy and requires context to decide which is the right way.

Lidl rolled it out in the smaller countries, learned the lesson that it's not going to work, and stopped it.

What I find crazy is that it still took 500M to figure that out.

It took that much for all levels of management involved to admit it was hopeless and for the top level to ax them.

ERP is probably the slowest moving market in software. Trying to sell ERPs for almost a decade now here is what I learned

1. The first reason for this is compliance. Most large companies are worried about compliance and trust only comes with many years of successful deployments. For a new entrant to be recognized can take upto 10 years and for clients to accept the solution as a solid one.

2. The second reason is complexity. When you consider the scale and complexity of an implementation, most new ERP companies do not understand the effort goes into pre-sales and going through hundreds of pages of RFPs. There are system integrators, consultancies and entire ecosystems locked in to this duo-poly.

But things are changing. We run an open source product (https://erpnext.org) and we have seen people are looking to move away from the SAP-Oracle duopoly. Innovative companies where the CTO has as much as a say as a CIO in such decisions are willing to look outside at Open Source. It is still very early days, but this space looks exciting right now.

I looked around https://erpnext.org , got to https://erpnext.org/get-started , where there is a broken link "Start a Free Trial on ERPNext.com" ( https://erpnext.com/sign-up ).

I don't know much about SAP besides the fact that I don't think I've ever heard anything positive about it (but then again, nobody talks about the trains that are on time). I always assumed that it was a "nobody gets fired for choosing SAP" situation. It's huge, it might be clunky but you know that if you pay for the support it'll probably end up doing mostly what you want and it'll mostly keep working. The alternatives would be either using a less popular solution or creating one in-house but in both cases you're taking additional risks even if it might pay off in the end if everything goes right.

It's the same situation with Oracle, Microsoft Windows and countless other "corporate" software solutions. If you look at it from a hacker point of view it makes no sense, it's ridiculously expensive, it's often overkill, it's not elegant, you could do the same thing for 1% the cost and it'd work better etc... Now if you look at it from the point of view of a company that needs something that will work 100% by a given deadline and you want somebody you can yell at if it doesn't (and you want to know they'll still be here 6 months from now) it makes total sense.

"you could do the same thing for 1% the cost and it'd work better etc."

I used to think that - then I did some work with large scale ERP systems and realised that I was wildly wrong. Fortunately I moved into other areas while I still had some sanity.

Well that's an other thing, when you look at these solutions from afar you often see the core functionality and think it's not a big deal but the devil is always in the details, the millions of small functionalities hidden everywhere for specific tasks is what makes it very hard to compete. Every company has specificities, they want to interface with $external_software, they want to import $arcane_data_format etc... You start by writing a slim and tidy database engine and the next thing you know you have to implement an MS Excel to protobuf converter.

It's easy to underestimate the complexity of an ERP for even a moderately sized company, let alone one the size of LIDL.

ERP systems are basically accounts packages with aspirations for world domination.

From a long way, and I mean a really long way, they seem straightforward - but get close and they are Lovecraftian horrors.

Remember, SAP is how Lucifer interacts with our world.

Whereas Oracle is how Larry Ellison interacts with our world.

A reasonable business case for SAP, I suppose.

I'd take my chances with Lucifer.

Its actually much worse than that. I have considerable experience in a similar class of system, electronic medial records. A common thread I saw in both our PeopleSoft implementation and our EMR implementation was that both are not really packaged products, but platforms to implement our organizations workflows. We were not about to adapt our workflow to some software package so really we buy the product and then spend hundreds of millions using it to encode how we want to operate. By the time you are actually inside the database you typically find a data model that is optimized for flexibility over anything else. So its not really that we need weird connectors, its that we say oh no, we actually have this functionality in this weird department that no one else has with data that is subtlety different from other organizations and a workflow that no one else has. Then repeat that thousands of times.

Every few years, over the past 20 years, I look around to see if there are any open source contenders in the ERP space. There are usually a couple, but you never get to hear about them again. I think it's a difficult space to enter and succeed in and I think most efforts probably underestimate the complexity and isn't funded or run well enough to tackle that adequately.

ERPNext has been around for a decade now and doing quite well! https://github.com/frappe/erpnext.

Founder here, happy to answer questions.

I've been interested in ERPNext for years and always kept an eye on it as an alternative or replacement for our in-house developed ERP, which currently grows in complexity and may end up at a point where it's too much of a burden for a small team like ours.

One area where ERPNext really seems to be lacking is marketing and presentation. You definitely have the features, but I don't think you're doing a good job of showcasing and documenting them, particualrly before I create an account. You try to show those features in Youtube videos, but the production value doesn't seem to be much higher than a private screencast - I'm worried that this kind of presentation actually hurts you.

Another problem is language support. Last time I checked you worked on community based translation efforts, which resulted in experimental international support. May the quality of the translations has improved since then, and of course I could (and did) help, but without proper doemstic language support (german in my case), there's no way I could use ERPNext with our non-tech, barely english speaking staff.

Other than that I've been intrigued for a long time and wish you would not delete free single user accounts so soon (do they still exist at all?) - I tend to try ERPNext from time to time, with long pauses inbetween, and often have to create a new account.

Did you underestimate the complexity? Did you limit scope to not go insane? What is the typical size/complexity of a typical using company? Could LIDL have used your software for 500M€, could they have even implemented their completely own solution for that money? Thanks!

There have been a few very large implementations of ERPNext. If I were to consult Lidl, we would have done a few low risk pilots, starting with their warehouses or back-office.

I would have gone for a federated architecture where each store / warehouse would have its own system that would then be consolidated at higher levels, rather than going for a mega instance with zillions of transaction rows.

There are many interesting things you can do when you have an open source system you can work to your advantage.

I was curious to learn more about the project, and would like to share some quick feedback; the first thing I noticed was that the first page of the documentation which I opened has multiple spelling and grammar errors:

“Distrobutors have large part of their net worth is invested in the stock in hand. With ERPNext, you can always keep a birds eye view on your stock availability, replineshment, procurement and sales.“ https://erpnext.org/docs/user/manual/en/stock

Second, I noticed that the CI build is failing on GitHub.

If you have questions, there is a very active community at https://discuss.erpnext.com

Typo: Thanks for the report. We will get it fixed.

CI: The marker is for the develop branch. So if you are on master, its much more stable.

That is what I tell people that think they could do the same for 1% of the cost: You can't.

I do believe they would have gotten more out of spending 500M on an internal team though.

Care to elaborate?

The problem is, I think, that using SAP essentially is creating your own solution in-house... but being tied to a certain amount of structure from the start rather than being able to go off and completely do your own thing. The way it’s implemented also doesn’t generally allow for creating small solutions and building up - either the entire project succeeds several years after it’s started, or it all fails.

I once worked with an SAP consultant who had worked on SAP projects that were 100% custom development. They used it strictly as a form-building app dev platform with solid scalable transaction processing and reporting capabilities, and used zero of the pre-defined configuration or data structures. I think they had a bit of the "when your only tool is a hammer" mentality.

Using services from big name companies is (half) the corporate world version of an expensive fashion item/fancy car and half "wanting someone to sue in case things go wrong".

Except an expensive fashion item doesn't ruin your ability to do your job and is still probably cheaper in relative scales.

I think the big attraction of SAP is that it lets CEOs smooth out earnings.

They can get projections of what the number are going to be for the quarter continuously so in the last few weeks of the quarter they can speed up or slow down sales and spending to hit the earnings numbers they want.

Not sure why you are being downvoted - I used to know a guy who had been head of sales for a large tech company that you will have heard of and he said they did exactly that - delay sales from one period to the next to smooth things out and to be closer to market expectations.

Their sales contracts apparently had clauses allowing them to delay sales for just this reason.

NB That kind of sales reporting isn't just from SAP - Oracle Hyperion and IBM Cognos are the biggest players in consolidated financial reporting.

Cisco Systems used to be renowned for hitting consensus revenue projections precisely, always consensus +1 cent.

That kind of "management" is a red flag IMO.

And the "wanting someone to sue in case things go wrong" strategy is typically a pipe dream as well - you're simply fucked and paid a lot of money for nothing in case things go wrong.

The problem is that most SAP projects are in reality change management projects. Unfortunately, change management doesn't sound sexy and everybody focuses on the software side of things. But any IT project at that scale will require a lot of change and a really deep understanding of the current and future business processes and the value you want to get from that change

My "favourite" SAP experience was at the last company I worked at who used it for everything.

One guy who worked for me did a 4 day week - he sometimes took half a day of leave, and when he got to his last half day he could never book it, because the system was adamant he only had 0.49 days of leave remaining.

Not sure if that was bad configuration when it was implemented ... or the product being a bit ropey when something doesn't fit their model perfectly, but it stuck with me and made me forever wary.

Totally agree. It seems that the main advantage it has is that the complexity can be skewed to any angle (helpful for sales), and that the decision-making process at many large companies is an exercise in check-box procurement - rather than, say, genuine understanding of the problems to solve or the user(s) needs.

Is this situation not produced by the "nobody got fired for using IBM" mentality.

Supply chain may be complex but for heavens sake, 500M euros! and not complete. I can do it for half :)

When Oracle is your alternative, SAP suddenly looks better.

>In the late 90s/early 00s a lot of people had seemingly infinite trust in IBM.

You probably conflate that period with the 60s-70s.

In the late 90s/00s it was when IBM regained some mojo by adopting Linux and OSS and building on top of them.

It was not its time of "infinite trust", but a time of a recovery into "some trust".

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.

The moment you touch anything related to accounting or subject to laws / regulations, stuff gets very hairy.

There might be more offered by SAP than you are accounting for. You would have to re-create all of the features for things like demand management aggregated forecasting by product line, including integration with supply chain ordering and EDI integration with your global suppliers and customers. You might also need a solution for maintaining separate general ledgers for local hyperinflationary accounting requirements in Brazil in parallel with GAAP reporting in the US. And those other services such as HR and invoicing...they are also all in the box with SAP if you choose to go whole hog.

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

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.

That is one hell of a Django app.

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