How to avoid Lidl's $500M failed SAP implementation mistakes
Common sense goes a long way.
When I was in Germany I fell in love with grocer Lidl. So when I learned that they just had to write off a $600M failed SAP implementation, I wondered what kind of incompetence led to this failure.
At AfterShip, we've integrated with SAP for a few retailers, and so far we've had a 100% go-live rate. So what let’s find out
What went wrong
What to avoid
What went wrong
I found an article by Eric Kimberling which investigated what happened behind the scenes and the results will either shock you or confirm what you thought.
Eric, who has a great name, tells what you what went wrong, but he stops at telling you what to do. I'm going to go out on a limb and tell you what I'd do differently.
1. Lidle insisted on bending SAP to fit it's business processes instead of changing it's business processes to fit SAP.
Lesson learned: Either build the crap in house, or use it like it was designed. Of course your SI is going to say that it’s a good idea to customize they get paid fees baby!
2. Lidl thought that writing an outsized check to an SI (systems integrator) would solve it's problems - but it made it worse.
Lesson learned: The old way is to pay a consulting firm billing rates which are 3-5x what they actually pay their staff, and then get people who have no skin in the game to implement your project. The new way is to poach those teams and assemble your own special project freelance team at 40% of the cost. You can find these people on all the freelancing sites. And then they work directly for you, not for another company.
3. Lidle forgot that executives come and go, and the team executing it wasn't even the team that decided to buy it.
Lesson learned: If an executive spends $500M, you had better include in this persons contract that if the project fails, you're going to clawback some of their salary even if they've stopped working there.
4. Lidl employees rejected change.
Lesson learned: Congratulations your company has a culture of stability and resistance to change, so this is what you get. There’s no way you’re going to fix this problem, just live with that fact that your organization is a farmer and instead take the money to invest into start-ups and mentor young leaders to make innovation and change part of their culture.
Do you agree with my method of management? Or is that exactly why I'm not the boss? Tell me!