Lessons learned from the Haribo SAP ERP Failure

Previously, we discussed the Hershey ERP failure case study, the Revlon SAP failure and Lidl failure amongst others… The articles were meant to help you determine your ERP implementation journey carefully through learning from the aforementioned failures. If you want a smooth and successful implementation of the ERP system, you need professionals to help you. The companies who had to face failure did so because of a few mistakes they could have avoided altogether if they had chosen to work with experts.

Revlon’s SAP failure

Haribo SAP Failure 

 

Haribo is a German candy company that produces gummy bears and other candies. In late 2018, they decided to go live with SAP. Soon after they began experiencing supply chain system failures. This eventually influenced profits, leading to a decline in revenues afterlife.

In some respects, the problem Haribo faced was slightly more subtle and far more likely to occur than some of the other more dramatic case studies. Here are some of the common lessons learned from Haribo about lowering the ERP failure rate.

Lessons Learned:

·    Operational disruption is the #1 hidden cost and risk of a poor ERP implementation 

 

Hundreds of millions of dollars have been spent in previous cases, adding to the overall cost of the serious losses. However, this can be avoided as the transition challenges for the average organization are usually subtler when done correctly.

Haribo may not have spent a huge amount of money implementing the SAP or take legal actions against the scheme. However, these failures of the supply chain and profit losses can be of great benefit to many enterprises. Our team’s research over the years has shown that approximately half of businesses experience material damage during digital transformations. This is because the cost and danger are not planned by or mitigated sufficiently by most organizations.

·    Business Process Reengineering is Critical

 

The fact that business processes have been damaged after the go-live suggests that Haribo did not spend sufficient time and effort on their operations management. They did not know what they need to do during their digital transformation in the sense of business process management. For failure to effectively overcome challenges, entities must plan their State businesses’ future processes to align themselves with their overall organizational model.

·    Align Your ERP System with Your Organizational Goals

 

Haribo wanted its international production footprint to increase and its supply chain business to improve. Therefore, they decided to implement SAP. Unfortunately, the features incorporated in the S/4HANA platform may not have completely supported this view.

We suggest identifying your organizational priorities first during the ERP selection process. Which steps will help you get into your brand, and what do you want? You can only understand with such answers which features a new platform should be a priority.

·    Never Skip Testing!

 

It is hard to understand how Haribo went live with the program without testing the supply chain in advance. Effective device testing and the meeting room operators should unveil possible big interruptions like this long before their livelihood. If not, then your research technique is incorrect. Before your digital transformation, make sure you understand the significance of ERP systems testing.(What is ERP testing)

Why does an ERP implementation fail?

 

Before pulling the plug on their SAP transformation, Lidl spent hundreds of millions of dollars. To ensure that your project does not escalate out of control or harm your activities, Haribo and others need good leadership, dedication, and project governance. Lack of all these qualities is the only reason why these implementations fail badly.

two-tier-erp

DFSM Rescue Plan

 

If you are unsure about your ERP implementation or plan or need to know if the system is failing, let us help you with it. Knowing what the problems in implementing ERP systems are can be a huge help. At DFSM we have the rescue plan for you through assessment, consultation, and testing. If you want an instant response, you can check out our form, answer the questions, and see if you are failing and need help. DFSM is always there for you.

4 Lessons from Revlon’s SAP Implementation Disaster

We recently had a brief discussion about the SAP failures. Every case, including Hershey ERP failure and Lidl ERP failure, had its points to learn lessons and ensure that your company is not about to make the same mistake. Today, we will talk about Revlon, so you can see if you are also preparing to join the same path or not. You can check out the SAP failure rate as many companies fail to learn from previous failures.

Revlon revealed a couple of weeks ago that it was terrible to enforce its SAP. It was due to the inability to enforce the SAP that delayed financial reporting.

Within 24 hours of publishing the story, its stock decreased 6.9%, triggering an investor’s lawsuit. Not good for a well-established consumer product business, especially for publicly traded companies.

Revlon’s SAP failure

What have we learned from Revlon’s SAP failure?

  • Design and Controls are the keys to success 

 

Revlon reported a lack of design as one of the problems behind the failure of ERP. As a result of its internal controls, the company suffered “material weaknesses.”

It is important to look closely at the business processes to minimize the risk of material operational disruption.

You should ensure that the development team knows this when determining your future state and training your staff to configure and evaluate the program correctly.

system desgin d365
  • Negative ROI is a big red flag

 

Revlon also announced that: In addition to a breakdown in its North Carolina Plant’s operational controls and production problems:  

  • Sales lost by SAP failure could not be recovered.
  • Disruption in customer service.
  • The demands for their management and employees were growing, with an emphasis on other business goals cannibalized.
  • It produced substantial capital and operating costs.
  • The handling of sellers’ payments was challenging.
  • It couldn’t meet the timely or reliable federal, state, and local reporting and filing standards.
  • It had higher shipping costs than anticipated – due to the SAP failure of the customer burning.
  • It was ‘incapable of correctly or promptly filling customer orders, or at all’ (emphasis added).

We are sure that this wasn’t the expectation of Revlon.

  • Implementation risks should be well understood

 

Revlon did not seem to recognize the risks associated with its ERP implementation, as were many organizations adopting SAP S/4HANA and other ERP solutions. Worse still, efficient methods for reducing such risks should not be quantified or enforced.

Revlon endured delays in shipment and missed sales in North Carolina due to the production interruptions – the site of the first phase of its SAP live service.

If Revlon had known, quantified, and mitigated the risks associated with ERP introduction, steps would have been taken to ensure that its go-live did not significantly impact its operations.

project management implementation process
  • Risk Identification must be calculated  

 

In Revlon’s case, problems became apparent right after the device was implemented in Oxford, NC. The roll-out created service level disturbances that affected production and shipping capabilities directly.

Revlon clarified that they could impact their competitive position if such disruptions continue. Their client relationships, prospects, financial conditions, and cash flow may also influence them.

The company should have prepared for these setbacks with a comprehensive risk evaluation. The risks to implementing an ERP are inherent, and it is not reasonable to expect to go live without problems.

Payroll Processing and Calculations

DFSM ERP Failure Rescue Service

 

If you can find out the ERP implementation failure statistics increasing (from Gartner), you must not take a chance and hire professionals for consultation.

We support some big companies on their ERP implementation rescue plan to be glad to exchange notes and share some lessons from failures to successful projects.

Contact us to discuss any time – we’re pleased to be your digital transformation partner.

Lidl SAP implementation failure (ERP Failure serie)

The companies acquire ERP systems helps them in managing work with a balanced flow and in a more organized way. They get to have easy access to the information, manage different departments from a single platform. Some companies wanted to streamline their business and started implemented ERP systems but had to meet the failure. 

In one of our previous blogs, we discussed one of the ERP failed projects/ERP failure example, i.e. Hershey ERP failure. Companies looking for failure lessons and failure factors of ERP implementation can have a lot to learn from it. There are many reasons for these failures. In this case study, we are going to talk about the Lidl SAP implementation failure. Let’s help you take a walk through their failures for your understanding.

 

benefits_of_erp

How it all started?

Lidl implemented SAP three years ago, considering their step towards a transformative journey. The goal was to meet the market ends for innovation and efficiency. Initially, they went live with the merchandise management at its Austrian stores in May 2015. The roll-out plan was to reach 10,000 stores and more than 140 logistics hubs. However, now the recent news states that Lidl is dropping the project worth €500m project.

 

Why did the project fail?

 

A recent survey study based on 113 individuals shows that across the SAP has failed to companies have failed in the SAP implementation. The reason is common, and that is SAP, not meeting the expectations of the company. The reason for the Lidl SAP implementation failure was:

  • It shows that customization is not one of the strengths of the SAP system. Projects are completed successfully with a specific model. Changes, however, demand more and fail SAP.
  • In the case of Lidl, it demanded a higher cost for consultation and implementation cost consider the adjustments.
  • The company also states that the problem has risen despite the technology solution.

A Lesson Learned

 

We all know that the system is supposed to ease up the process and help organizations in reaching a higher level of success. Now, most companies fail as they lack business engagement. So, with the failure of Lidl SAP, we have learned to:

 

·Open to Business Process Reengineering

 

A willingness to improve process engineering will help you define the helpful processes and separate the changes you need. You need to look closely at the requirement gaps and fix them.

 

·Follow the defined timelines

 

The Lidl project spanned around seven years. See, the problem lies in the timelines. You have to adhere to them. Competition doesn’t stop, and the market keeps moving on. So, avoiding intensive customizations will help companies in following deadlines or timelines in a better way.

 

·Ensure executive alignment

 

Since the team was in constant fluctuation, managing business alignment or buy-in became tougher. So, it is important to maintain the focus.

·Prioritize organizational change management

 

Prioritizing internal growth in the team is also important. It seems easy, but it is not. You have a focus on training during the project implementation and help the team understand the smart use of functions.

 

DFSM ERP Rescue failed project

 

DFSM can help you in saving your time and money. Talk to our consultants, and they can assess if the project is failing or not. So, they can offer immediate solutions along with the training to help the team learn better use of the ERP system.

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