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Lidl dumps €500m SAP project

Discount supermarket chain Lidl has spent millions on a SAP Hana system, and found it will need to spend even more to make it work

Discount supermarket chain Lidl has dropped SAP just three years after going live with SAP Retail, powered by the enterprise resource planning (ERP) company’s Hana in-memory database.

The company implemented the SAP system to replace its in-house developed legacy merchandise management system, which was coming up against the limits of its capacity for innovation and enhancement.

At the time, Lidl said the legacy system was hampered by process breaks, redundant master data storage, integration gaps and functional restrictions. Multiple interfaces and modules and a decentralised server structure made the task of running and maintaining the system increasingly complex.

Lidl initially went live with the new electronic merchandise management and information system at its Austrian stores in May 2015, and planned to roll out the system to 10,000 stores and more than 140 logistics hubs.

However, in the past month, it has emerged that Lidl has now decided to drop the €500m project.

A memo reportedly sent by the head of Lidl, Jesper Hoyer, to staff stated that the strategic goals as originally defined by the project could not be achieved without the retailer having to spend more than it wanted.

A recent study has found that failure of SAP projects to meet expectation is a common problem. A survey of 113 individuals across 105 companies for the Uncovering the factors that drive success for SAP customers study, from SAP advisory service Resulting IT, found that only 36% felt their SAP project kept to its original plan.

In addition, just under half (48%) said their project failed to achieve business objectives. The report also found that 52% of the businesses surveyed said their project was over budget.

Speaking previously to Computer Weekly about the failure of SAP projects, former Gartner SAP analyst Derek Prior said a common theme among businesses that failed to realise benefits from their SAP implementation is that they fail to match up the SAP implementation with the business case.

“They don’t have the right level of business engagement,” he said. “They do not have the right people to measure business outcomes and the business case is put on a shelf and never looked at again.”

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