Lidl has lost some 500 million euros on a failed SAP implementation project. The German supermarket chain had been working on the implementation for seven years, but is now permanently pulling the plug. Meanwhile, the old inventory system is being pushed forward again.
This is what several German and English media write about.In 2011, Lidl started developing a successor to its own solution 'Wawi'. Based on a 'SAP for retail powered by SAP HANA', a new solution was to emerge. The aim: to simplify and centralise its IT infrastructure.
High expectations from eLWIS system
The implementation of the so-called 'eLWIS' system initially seemed to go well and expectations were high. "With the new platform, we are preparing for the future," CIO Alexander Sonnenmoser said in spring 2016, heralding the international rollout of eLWIS.
Software had to be modified
The problems arose when SAP discovered that the supermarket chain based its inventory system on purchase prices, while SAP's software uses retail prices. Lidl refused to go along with this, requiring the software to be modified.
As a result, costs rose sharply and efficiency decreased. At the low point, a thousand employees and hundreds of consultants were working on the implementation. Due to the loss of time, the SAP blueprint had now been overtaken by new technologies.
Cost: 500 million euros
Lidl has now decided to pull the plug on the project, which cost around 500 million euros, according to trade magazine Lebensmittel Zeitung. "The strategic goals as originally defined were not possible at acceptable costs," Lidl board chairman Jesper Hoyer wrote in a letter to staff.
Lidl wants to return to own stock system
Lidl is now attempting to return to its old inventory system. A notable move, as the discounter was still saying a few years ago that the ERP system it previously used had reached "the limits of its viability".
'No choice against SAP'
What the future cooperation with SAP will look like is not clear. Lidl stressed that the decision "is not a choice against SAP, but a choice in favour of its own system". In other areas, the supermarket chain does want to continue working with the software company. Lidl also uses the 'SAP ERP powered by SAP HANA', 'SAP Business Warehouse powered by SAP HANA' and 'SAP Customer Activity Repository' projects, which SAP says will not be affected by the discontinuation of eLWIS.
