Seven years ago, German supermarket chain Lidl decided to replace its old ERP system with a new one. After a successful introduction, the problems piled up and Lidl recently decided to pull the plug.
Purchasing versus retail price
“Lidl has lost about half a billion euro to a failed SAP project”, German newspaper Handelsblatt reports. The old system had “reached the limits of its viability” and to simplify the IT infrastructure, the German discounter had decided to switch to the so-called eLWIS system, based on SAP HANA for Retail. Initially the implementation was smooth, the system was rolled out internationally and Lidl even received an award from SAP last year.
However, later it was discovered that the supermarket chain’s stock system is based on purchase prices, while the SAP software is based on retail prices. Adapting the software was easier said than done: the costs increased (at one point several hundred consultants were working on it), while the efficiency decreased. Therefore Lidl decided to pull the plug on the project and take its loss: about 500 million euro. For now, the distributor is falling back on the old ERP system…