15 ms·

LIDL cancels SAP introduction after spending 500M Euro

341 points by wohlergehen 8y ago

bryanrasmussen 8y ago
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.
- _Codemonkeyism 8y ago
  Looks like the only source is a letter from Lidl to employees that a local newspaper ('Heilbronner Stimme') got hold of. Lidl is usually very secretive.
- TimWolla 8y ago
  As a native German speaker: The Google translation is fairly good: https://translate.google.de/translate?sl=de&tl=en&js=y&prev=_t&hl=de&ie=UTF-8&u=https%3A%2F%2Fwww.br.de%2Fnachrichten%2Flidl-setzt-500-millionen-euro-in-den-sand-100.html&edit-text=&act=url https://translate.google.de/translate?sl=de&tl=en&js=y&prev=... The article is fairly thin on content, though. It barely contains more information than the Hacker News headline.
- thomasedwards 8y ago
  I would love to read some interesting Danish content!
- eastendguy 8y ago
  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.
_Codemonkeyism 8y ago
Many (article says 100) consultants with xK$ per day runs up 500M fast.
- antpls 8y ago
  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.
  - kirbypineapple 8y ago
    $150 per hour is on the low end for good SAP consultants. We were paying $300 per hour for some InfoSys SAP HANA people, and even independents were around $200+. If they're doing anything beyond vanilla consulting work with SAP then I doubt they're using cheaper offshore talent. Or maybe they are and that's why this project has failed so spectacularly. (Note: I'm not saying all offshore talent is hot garbage, I'm saying the cheap talent is hot garbage, especially SAP consultants).
    - manquer 8y ago
      True, but not all 100 of them are that level or being used full time for years would they ?
  - patman81 8y ago
    One way to calculate: 7years × 365days × 2k/day × 100 "experts" = 500m
    - deleted 8y ago
      [deleted]
    - thinkingemote 8y ago
      People don't tend to work every day in a week, and there are holidays etc.
  - darkcha0s 8y ago
raverbashing 8y ago
Well at least they pulled the plug and didn't go bankrupt like Target Canada
- fps_doug 8y ago
  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.
osrec 8y ago
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...
- consp 8y ago
  Looks like they canceled it in the testing phase and noticed it simply didn't work or under performed. With those very expensive consultant hires (SAP is notoriously expensive, both licensing and consulting) it might have been cheaper to cancel it outright then to dragging it along. I applaud their idea to do it in house as they are big enough to have IT/Supply line software as a core principle which can save you money in the end, and not as an external expense which is just an annoyance.
- lowkeyokay 8y ago
  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.
  - osrec 8y ago
    Yeah, it's like a trade you refuse to cut in the hope it may turn around some day!
  - vertex-four 8y ago
    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.
Roxxik 8y ago
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.
DrinkWater 8y ago
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.
- simias 8y ago
  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.
  - arethuza 8y ago
    "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.
    - simias 8y ago
      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.
mosselman 8y ago
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.
- nothrabannosir 8y ago
  This specific case, though, is totally acceptable : Lidl is a company in a market with great opportunities for competition. If this decision was a waste of money, a smaller , SAPless company can come and eat their lunch. The Dutch government is a very different story. Until we have a few parallel governments between which we can easily choose , without having to uproot our entire lives, it is a pathetic waste of tax payer money. I dream sweet dreams of accountability and proper incentive structures for government and public servants. One day.
- lagadu 8y ago
  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 8y ago
    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.
philipodonnell 8y ago
> 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 8y ago
  > 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.
  - tluyben2 8y ago
    I think it depends what adapting means. People often (and I guess LIDL fell for that too) just think they can adapt everything to their needs and that really is not possible. A lot of processes benefit more from changing the processes than the SAP implementation of those processes. IMHO.
  - 8y ago
dz0ny 8y ago
Relatable unrelated https://www.reddit.com/r/kubernetes/comments/8v9qxo/bare_metal_k8s_clustering_at_chickfila_scale/ https://www.reddit.com/r/kubernetes/comments/8v9qxo/bare_met... I bet the problem was at scaling/updating system on individual locations because I heard about the similar problems in small remote groceries/shops.
lucb1e 8y ago
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 8y ago
  What is a high-turnover country?
  - ahartmetz 8y ago
    Germany, probably UK, France?... Any largish country with a high Lidl (sic) marketshare.
  - 21stio 8y ago
    High revenue country
psihonaut 8y ago
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 8y ago
  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."
tonyedgecombe 8y ago
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 8y ago
  Do you know details about the implementation? Did they try to customize everything?
  - tonyedgecombe 8y ago
    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.
gadders 8y ago
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.
jankotek 8y ago
SAP introduction starts with documenting organisational structure, processes and many other things. That can be used outside of SAP...
_pmf_ 8y ago
In Germany, they could have sustained a team of 100 developers for 100 years (at 50000 EUR salary).
- Annatar 8y ago
  Sure, but that’s a small salary, even for Germany.
  - TurboHaskal 8y ago
    You'd be surprised. I don't know many devs earning >60k.
    - qualsiasi 8y ago
      I honestly thought that average was 60/80k
      - bflesch 8y ago
        I've hired many devs in Germany, if you pay less than 60k you get very bad ones.
        virtualized 8y ago
        TIL I am very bad
        swimnswim 8y ago
        haha you cracked me up! // or underpaid ;)
    - nyir 8y ago
      And you have variance in the industries, location, travel requirements presumably, etc. Sure. But with a project of this size and scope I'd be impressed if they'd be able to find (great) devs wanting to work on it below 65-70k and not quit after a year. IMHO and so on based on way smaller projects.
Shihan 8y ago
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 :-) ).
spsrich 8y ago
Oh wow, a SAP rollout that went wrong! That never happens !
spsrich 8y ago
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!
Annatar 8y ago
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 8y ago
  > 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 8y ago
    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.
syntaxing 8y ago
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).
- detaro 8y ago
  Which country, potentially which industry? This is something where from what I've seen there's often local players which are interesting, but would be a bad choice in other places.
- patja 8y ago
  Have you looked at Microsoft's product? Whatever label they have put on the stuff they bought from that company in Fargo...Dynamics?
- berns 8y ago
  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
- zebrafish 8y ago
  oracle has an offering for smaller businesses called netsuite. I think dynamics is also suited to smaller players.
- leviathant 8y ago
  I'm an SE for an ecommerce platform aimed at the mid-market (Workarea), and there are a lot of ERP/PDM options out there for SMB, and they all take work to implement and maintain. In the interest of full disclosure, my only affiliation on that side of things is with a company called OrderBot; if you hit me up at my handle @gmail.com I might have some suggestions for you depending on what you're looking for - mostly based on what I've seen out there in terms of what we've been connecting Workarea to.
- passing_by_and 8y ago
  IFS Applications may be something to consider.
netinmate 8y ago
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.
- alistairSH 8y ago
  I wish you worked for my customers.
- manmal 8y ago
  Do you think enterprises can even profit from adapting to SAP‘s structure (streamlining etc), or do you think this does not matter anyway?
  - petepete 8y ago
    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.
    - manmal 8y ago
      Ok, so no organizational benefits?
      - rbanffy 8y ago
        Perhaps you need fewer people maintaining those business apps.
patja 8y ago
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.
baxtr 8y ago
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...
callesgg 8y ago
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 8y ago
  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...
throwaway_2q121 8y ago
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 8y ago
  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.
e12e 8y ago
"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
amelius 8y ago
Could we at least see some of the main requirements of this system, so we know what we are talking about?
auvi 8y ago
Honest question: how do people go about learning SAP?
- lurker456 8y ago
  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.
adamdrake 8y ago
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.
woodpanel 8y ago
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 8y ago
  Any idea how much the savings was that they risked a 500M write-off to avoid?
  - woodpanel 8y ago
    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 8y ago
      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
singingfish 8y ago
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.
mohaug 8y ago
Similar ERP implementation cancellation after spending 1bn https://www.computerworld.com/article/2493041/it-careers/air-force-scraps-massive-erp-project-after-racking-up--1b-in-costs.html https://www.computerworld.com/article/2493041/it-careers/air...
mercatort 8y ago
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).
fargozzi 8y ago
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.

341 points by wohlergehen 8y ago

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.

_Codemonkeyism 8y ago
Looks like the only source is a letter from Lidl to employees that a local newspaper ('Heilbronner Stimme') got hold of. Lidl is usually very secretive.
TimWolla 8y ago
As a native German speaker: The Google translation is fairly good: https://translate.google.de/translate?sl=de&tl=en&js=y&prev=_t&hl=de&ie=UTF-8&u=https%3A%2F%2Fwww.br.de%2Fnachrichten%2Flidl-setzt-500-millionen-euro-in-den-sand-100.html&edit-text=&act=url https://translate.google.de/translate?sl=de&tl=en&js=y&prev=... The article is fairly thin on content, though. It barely contains more information than the Hacker News headline.
thomasedwards 8y ago
I would love to read some interesting Danish content!
eastendguy 8y ago
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.

_Codemonkeyism 8y ago

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

antpls 8y ago
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.
- kirbypineapple 8y ago
  $150 per hour is on the low end for good SAP consultants. We were paying $300 per hour for some InfoSys SAP HANA people, and even independents were around $200+. If they're doing anything beyond vanilla consulting work with SAP then I doubt they're using cheaper offshore talent. Or maybe they are and that's why this project has failed so spectacularly. (Note: I'm not saying all offshore talent is hot garbage, I'm saying the cheap talent is hot garbage, especially SAP consultants).
  - manquer 8y ago
    True, but not all 100 of them are that level or being used full time for years would they ?
- patman81 8y ago
  One way to calculate: 7years × 365days × 2k/day × 100 "experts" = 500m
  - deleted 8y ago
    [deleted]
  - thinkingemote 8y ago
    People don't tend to work every day in a week, and there are holidays etc.
- darkcha0s 8y ago

raverbashing 8y ago

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

fps_doug 8y ago
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.

osrec 8y ago

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...

consp 8y ago
Looks like they canceled it in the testing phase and noticed it simply didn't work or under performed. With those very expensive consultant hires (SAP is notoriously expensive, both licensing and consulting) it might have been cheaper to cancel it outright then to dragging it along. I applaud their idea to do it in house as they are big enough to have IT/Supply line software as a core principle which can save you money in the end, and not as an external expense which is just an annoyance.
lowkeyokay 8y ago
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.
- osrec 8y ago
  Yeah, it's like a trade you refuse to cut in the hope it may turn around some day!
- vertex-four 8y ago
  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.

Roxxik 8y ago

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.

DrinkWater 8y ago

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.

simias 8y ago
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.
- arethuza 8y ago
  "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.
  - simias 8y ago
    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.

mosselman 8y ago

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.

nothrabannosir 8y ago
This specific case, though, is totally acceptable : Lidl is a company in a market with great opportunities for competition. If this decision was a waste of money, a smaller , SAPless company can come and eat their lunch. The Dutch government is a very different story. Until we have a few parallel governments between which we can easily choose , without having to uproot our entire lives, it is a pathetic waste of tax payer money. I dream sweet dreams of accountability and proper incentive structures for government and public servants. One day.
lagadu 8y ago
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 8y ago
  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.

philipodonnell 8y ago

> 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 8y ago
> 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.
- tluyben2 8y ago
  I think it depends what adapting means. People often (and I guess LIDL fell for that too) just think they can adapt everything to their needs and that really is not possible. A lot of processes benefit more from changing the processes than the SAP implementation of those processes. IMHO.
- 8y ago

dz0ny 8y ago

Relatable unrelated https://www.reddit.com/r/kubernetes/comments/8v9qxo/bare_metal_k8s_clustering_at_chickfila_scale/ https://www.reddit.com/r/kubernetes/comments/8v9qxo/bare_met... I bet the problem was at scaling/updating system on individual locations because I heard about the similar problems in small remote groceries/shops.

lucb1e 8y ago

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 8y ago
What is a high-turnover country?
- ahartmetz 8y ago
  Germany, probably UK, France?... Any largish country with a high Lidl (sic) marketshare.
- 21stio 8y ago
  High revenue country

psihonaut 8y ago

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 8y ago
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."

tonyedgecombe 8y ago

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 8y ago
Do you know details about the implementation? Did they try to customize everything?
- tonyedgecombe 8y ago
  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.

gadders 8y ago

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.

jankotek 8y ago

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

_pmf_ 8y ago

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

Annatar 8y ago
Sure, but that’s a small salary, even for Germany.
- TurboHaskal 8y ago
  You'd be surprised. I don't know many devs earning >60k.
  - qualsiasi 8y ago
    I honestly thought that average was 60/80k
    - bflesch 8y ago
      I've hired many devs in Germany, if you pay less than 60k you get very bad ones.
      - virtualized 8y ago
        TIL I am very bad
        swimnswim 8y ago
        haha you cracked me up! // or underpaid ;)
  - nyir 8y ago
    And you have variance in the industries, location, travel requirements presumably, etc. Sure. But with a project of this size and scope I'd be impressed if they'd be able to find (great) devs wanting to work on it below 65-70k and not quit after a year. IMHO and so on based on way smaller projects.

Shihan 8y ago

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 :-) ).

spsrich 8y ago

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

spsrich 8y ago

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!

Annatar 8y ago

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 8y ago
> 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 8y ago
  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.

syntaxing 8y ago

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).

detaro 8y ago
Which country, potentially which industry? This is something where from what I've seen there's often local players which are interesting, but would be a bad choice in other places.
patja 8y ago
Have you looked at Microsoft's product? Whatever label they have put on the stuff they bought from that company in Fargo...Dynamics?
berns 8y ago
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
zebrafish 8y ago
oracle has an offering for smaller businesses called netsuite. I think dynamics is also suited to smaller players.
leviathant 8y ago
I'm an SE for an ecommerce platform aimed at the mid-market (Workarea), and there are a lot of ERP/PDM options out there for SMB, and they all take work to implement and maintain. In the interest of full disclosure, my only affiliation on that side of things is with a company called OrderBot; if you hit me up at my handle @gmail.com I might have some suggestions for you depending on what you're looking for - mostly based on what I've seen out there in terms of what we've been connecting Workarea to.
passing_by_and 8y ago
IFS Applications may be something to consider.

netinmate 8y ago

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.

alistairSH 8y ago
I wish you worked for my customers.
manmal 8y ago
Do you think enterprises can even profit from adapting to SAP‘s structure (streamlining etc), or do you think this does not matter anyway?
- petepete 8y ago
  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.
  - manmal 8y ago
    Ok, so no organizational benefits?
    - rbanffy 8y ago
      Perhaps you need fewer people maintaining those business apps.

patja 8y ago

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.

baxtr 8y ago

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...

callesgg 8y ago

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 8y ago
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...

throwaway_2q121 8y ago

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 8y ago
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.

e12e 8y ago

"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

amelius 8y ago

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

auvi 8y ago

Honest question: how do people go about learning SAP?

lurker456 8y ago
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.

adamdrake 8y ago

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.

woodpanel 8y ago

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 8y ago
Any idea how much the savings was that they risked a 500M write-off to avoid?
- woodpanel 8y ago
  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 8y ago
    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

singingfish 8y ago

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.

mohaug 8y ago

Similar ERP implementation cancellation after spending 1bn https://www.computerworld.com/article/2493041/it-careers/air-force-scraps-massive-erp-project-after-racking-up--1b-in-costs.html https://www.computerworld.com/article/2493041/it-careers/air...

mercatort 8y ago

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).

fargozzi 8y ago

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.