Why SAP Fails to Deliver Value to Customers

Not all SAP implementations are successful—many have faced significant challenges, delays, and even complete failures. Here are some notable unsuccessful SAP projects and the lessons learned: 1. Lidl – €500M SAP Failure (2018) •Issue: Lidl, a German retail giant, attempted to implement SAP for inventory and finance management. However, they insisted on keeping their existing inventory valuation method instead of adapting to SAP’s standard approach. •Result: After seven years and €500 million, Lidl scrapped the project. •Lesson: Customization must align with SAP best practices—forcing legacy processes into SAP often leads to failure. 2. Revlon – $64M Supply Chain Disaster (2019) •Issue: The beauty brand implemented SAP S/4HANA, but the rollout was rushed without adequate testing, resulting in supply chain disruptions. •Result: Factories couldn’t fulfill orders, stockouts occurred, and the company lost $64M in revenue. •Lesson: Proper testing and phased rollouts are critical for large-scale SAP implementations. 3. Hershey’s – $150M Halloween Disaster (1999) •Issue: Hershey’s implemented SAP but rushed the go-live before peak season without proper system stabilization. •Result: A failed order fulfillment process left millions of chocolates undelivered, causing a $150M revenue loss. •Lesson: Never go live during critical business seasons. Ensure the system is fully stable first. 4. U.S. Navy – $1B SAP Failure (2015) •Issue: The U.S. Navy spent $1B on an SAP ERP system for logistics, but they never properly defined the requirements. •Result: The system didn’t meet operational needs and was abandoned. •Lesson: Clearly define requirements and business processes before implementation. 5. LeasePlan – SAP HCM Implementation Challenges •Issue: LeasePlan, a fleet management company, implemented SAP HCM but struggled with customized payroll processing across different countries. •Result: The system had payroll calculation errors, leading to employee dissatisfaction and manual workarounds. •Lesson: Global payroll rollouts require detailed local compliance checks to ensure smooth functioning. Key Takeaways for SAP Consultants: 1.Minimize Customization – Stick to SAP best practices instead of forcing legacy processes. 2.Thorough Testing is Critical – Rushed go-lives without testing lead to disasters. 3.Stakeholder Alignment is Key – Business users must be fully involved, not just IT teams. 4.Phased Rollouts Work Better – Avoid big-bang implementations unless absolutely necessary. 5.Payroll & HCM Require Special Care – Compliance issues can cause payroll failures, legal problems, and employee dissatisfaction. #saphcm #sapfreshers #sapcareers #sapjobopportunity

Most SAP S/4 programs fail long before go live. But the steering committee never sees it until the factory shows the bill.   If you’ve ever delivered an S/4 rollout into a real plant, you already know the pattern. The program dashboard is green, design is locked, UAT is acceptable enough and everyone is gearing up for cutover… while the factory quietly braces for impact.   Here’s the reason. The KPIs that matter, the ones senior leaders judge success on, don’t originate in ERP. They surface in the plant.   Inventory turns, schedule adherence, ECO cycle time, OEE, FPY, scrap, batch release, line flow, continuity of change, are all shaped by PLM truth, APS feasibility and MES execution. ERP records the intention. Execution determines the outcome.   The trouble is simple. S/4 programs keep treating execution as Wave 3 instead of Wave 0. > APS gets deferred. > MBOM gaps get ignored. > Routings are assumed, not validated. > MES is treated like a future enhancement. And by the time the plant is asked to adopt the “new process,” the program has already locked in decisions that don’t match how the factory runs.   When that happens, the symptoms roll in fast: • Schedule chaos • Inventory drift • Quality disruption • Change delays • Firefighting • Rising cost-to-serveS • A blame game that points fingers at ERP   The real issue isn’t ERP. The real issue is missing manufacturing execution intelligence.   Tie ERP, PLM, APS, MES, Quality and IIoT together in a way that respects factory physics, and everything stabilizes. Ignore that layer and the plant is left improvising.   If this sounds familiar inside your own S/4 programs, you’re not alone. We’re seeing the same patterns across Defense, Automotive, Industrial, Med Device and Pharma. And we’re helping GSIs turn this recurring pain into a capability that protects margin, improves KPIs and strengthens client relationships.   Happy to compare notes with anyone facing these symptoms right now.

The blowback from AI overspending and underdelivering will fall primarily on the product organization. SAP’s recent reorg is proof of how fast dramatic changes happen when AI products underperform. Its customers see SAP’s AI products as adding high cost, but minimal value. And it's far from the only one. Salesforce, ServiceNow, Microsoft, and many others face the same challenges. If you’re in a data or AI product manager’s role, here’s what you need to do before the end of July, even if you don't work at an enterprise tech company. 1. Drop the vanity metrics and attribute the value. If you can't trace savings or revenue back to a specific product decision, you have a demo, not a business case. Build the attribution model now, before someone asks for it in a room you're not in. 2. Audit every pilot and either ship it or end it. Pilot purgatory is a career liability. Every initiative still sitting in evaluating past 30 days is evidence you can't deliver value. Force a verdict on each one. 3. Re-price against value, not compute. SAP's mistake isn't the data infrastructure or AI. It’s billing customers in units they can't translate into ROI. If your product's pricing is measured in tokens, seats, or consumption instead of the outcome it produces, you're handing someone else the job of proving your product's ROI. That's supposed to be your job. 4. Translate the win into the language of the room you're in. Walk into each conversation with the same slide, and you've lost half the room before you begin. Build the cost, strategy, opportunity, customer value, roadmap, and throughput of your proof point and know which one to lead with to prove ROI in terms that the people you’re talking to care about. Tough Love: Right now, ROI is the only thing capable of standing between product teams and the next reorg headline.

Most SAP failures aren't system failures. They're Master Data failures wearing a system's costume. Wrong vendor bank account in the master — payment goes to the wrong place. Incorrect UoM on a material master — production issues for 3 months before anyone traces it back. A plant code set up incorrectly in configuration — and every downstream transaction inherits that error silently. This is why SAP Master Data Governance (MDG) is not an IT project. It's a business continuity discipline. Here's what most teams get wrong: 1. They treat Master Data as a one-time setup task. Master Data is living data. A vendor changes their name, merges, or gets blacklisted. A material is redesigned mid-lifecycle. Without a governed change process, your SAP data drifts from reality — quietly, dangerously. 2. They don't assign business ownership. IT can build the workflows. But only a Purchase Manager can confirm whether a new vendor record is legitimate. Only a Plant Head can validate equipment classification. Governance without business ownership is just audit theatre. 3. They confuse data volume with data quality. I've seen plants with 40,000+ material records — and 30% of them either duplicated, incomplete, or never used in a single transaction. Cleanliness matters more than completeness. SAP MDG solves this by building workflow, validation, and ownership directly into the data creation and change process — before bad data ever hits the transactional layer. The sequence matters: Configuration sets the rules → Master Data sets the identity → Transactions record the movement. If the identity layer is corrupted, every movement built on top of it is suspect. Which of the 4 SAP data types is your biggest governance headache right now — Master Data, Transactional, Configuration, or Security? #SAP #MasterData #MDG #SupplyChain #DataGovernance #Manufacturing #ERPImplementation

I didn't know that everyone's second-favourite German supermarket - Lidl (Aldi's the first) - binned a £500m SAP programme until I read about it at the weekend. Over seven years they poured half a billion euros into a SAP ERP rollout, and then scrapped it. Why? Because they refused to change their own processes. SAP was built to run on retail prices. Lidl insisted on using purchase prices. That single legacy quirk unravelled the whole thing. The same could be said of many a project - especially those promising transformational returns. You can't have those returns by grafting a technology solution over the top of legacy processes, and with people who are resistant to change. “They don’t have the right level of business engagement, 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” said an analyst in the piece I was reading. If you’re not willing to optimise your processes, you’ll end up spending millions trying to bend the software instead. And when the vendor says “best practice,” it’s not a suggestion. I know I'm bringing this topic up a lot lately, but that's because I'm seeing similar behaviour to the Lidl story in several facets of many projects; from RFP stage through to delivery, the key is the process. Asking a vendor to fit their technology to a legacy process just isn't going to give you the outcome you want without compromise. EDIT: Tobias has highlighted the following update: "The Appeal of In-House Development, By: Berthold Wesseler" Discount retailer Lidl is investing a nine-figure sum in its new merchandise management system, called Wawi Nexus. This will once again be a bespoke development, after an interim modernisation project based on standard software failed. According to “Lebensmittel Zeitung”, the cloud-based system is intended to link the online business more closely with the physical stores. Over seven years, the retail chain belonging to the Schwarz Group had already invested an estimated €500 million in replacing its in-house system from the 1990s (“Wawi”) with the “Electronic Lidl Merchandise Management Information System” when the ambitious SAP project “Elwis” was halted in 2018. Elwis was based on SAP’s Retail powered by HANA package and Software AG’s webMethods integration middleware. The largest IT transformation project in the company’s history was quietly laid to rest, even though the Neckarsulm-based retailer had already introduced the new system in four countries."

Stop Using SAP S/4HANA as a "Garbage Dump" for Your Missing Vision! An SAP S/4HANA project is not an IT project—it’s a business transformation. But for many companies, this massive investment becomes a costly failure because they treat it as a cure-all for a deeper problem: a lack of vision and preparation. Consider this: How effectively does management support project decisions beyond just the budget? The truth is, implementing S/4HANA without first preparing your organization is a complete waste of money. Here’s why: You can't pave over a weak foundation. A new system can't fix broken value creation. Without a clean-up phase, you're just moving your old problems to a new, expensive platform. A project can't create a vision. The biggest mistake is using S/4HANA to compensate for a missing business strategy. Technology can't tell you what your goals are, which processes matter most, or how to get there. It can only enable a vision that already exists. Reflect: Is there a clear connection between your company mission, project charter, and change story? A disconnect often leads directly to scope creep, conflicting priorities, and an over-customized, underutilized system. A successful implementation starts with a clear, strategic vision. Before you spend a single euro on the technology, you must: Let the management define your project "Why": Clearly articulate your business goals and how S/4HANA will help you achieve them. 1. Clean House leads to (SAP) clean core : Get your data in order and analyze your current business processes to find what's broken. 2. Invest in Your People: Make change management a priority, not an afterthought. Don't let your S/4HANA project become a costly lesson in what not to do. A successful transformation is built on preparation, purpose, and people—not just technology. #Changemangement #ocm #sap

𝗦𝘁𝗼𝗽 𝗯𝗹𝗮𝗺𝗶𝗻𝗴 𝘁𝗵𝗲 𝘀𝗼𝗳𝘁𝘄𝗮𝗿𝗲 𝗳𝗼𝗿 𝗮 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗮𝗻𝗱 𝗲𝘅𝗲𝗰𝘂𝘁𝗶𝗼𝗻 𝗽𝗿𝗼𝗯𝗹𝗲𝗺. I recently attended a User Group meeting where the room got a bit… heated. An IT Manager stood up and voiced a common frustration: “𝘚𝘈𝘗 𝘪𝘴 𝘮𝘢𝘬𝘪𝘯𝘨 𝘪𝘵 𝘵𝘰𝘰 𝘥𝘪𝘧𝘧𝘪𝘤𝘶𝘭𝘵 𝘧𝘰𝘳 𝘤𝘶𝘴𝘵𝘰𝘮𝘦𝘳𝘴 𝘵𝘰 𝘮𝘰𝘷𝘦 𝘵𝘰 𝘚/4𝘏𝘈𝘕𝘈.” It’s a sentiment many share, but as we dug deeper into the "why," the story took a turn. It turns out, the roadblocks weren’t built by SAP. They were built by years of inertia on the customers side. After asking a few questions about their "as-is" system, two major issues surfaced: 𝟭. 𝗧𝗲𝗰𝗵𝗻𝗶𝗰𝗮𝗹 𝗗𝗲𝗯𝘁: The company hadn't performed a serious update on their ECC system in years. By skipping the incremental steps, they effectively locked themselves out of a one-step migration path. 𝟮. 𝗧𝗵𝗲 "𝗖𝗼𝗺𝗽𝗮𝗻𝗶𝗼𝗻" 𝗣𝗮𝗿𝘁𝗻𝗲𝗿: Their implementation partner had been in-house for 15 years—largely due to "good connections" between the bosses rather than proven competence. This partner failed to build a business case or provide anything resembling actual 𝗴𝘂𝗶𝗱𝗮𝗻𝗰𝗲. It’s easy to point the finger at the system provider. It’s much harder to admit that your internal roadmap (and your choice of advisor) is the real bottleneck. 𝗔 𝘁𝗿𝘂𝗲 𝗽𝗮𝗿𝘁𝗻𝗲𝗿 𝗶𝘀 𝗮 𝗰𝗼𝗻𝘀𝘂𝗹𝘁𝗮𝗻𝘁, 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗮 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗼𝗻. If your partner is just nodding their head instead of challenging your legacy processes and pushing you toward a business case that makes sense, they aren't helping you—they’re holding you back. 𝗧𝗵𝗲 𝘁𝗮𝗸𝗲𝗮𝘄𝗮𝘆? Don't wait for the "perfect" moment to update. Get moving, get your technical house in order, and ensure you have a partner with the guts to tell you what you need to hear, not just what you want to hear. Stand up! The water isn't as high as you might think.

A major UK retailer recently said no to migrating to SAP S/4HANA. Kingfisher plc kept ECC running, moved it to Google Cloud, brought in third-party support, and built AI personalization on top. The story spread quickly. The internet treated it as proof that the SAP roadmap is optional. That is not the lesson worth carrying. The line that should travel further came from John Burns at Summit BHC, quoted in CIO Online. He stressed the importance of Phase Zero. Before any architecture decision, the organization has to standardize its data, align its processes, and govern its front end. Without that work, splitting the layers solves nothing. Kingfisher's choice worked because they had already done the work. Their architecture was modular and API-first by design. The path decision came after the readiness decision, not instead of it. Most organizations get this backwards. They debate the platform options as if the choice itself creates value. It doesn't. The path only creates value if the organization can absorb it. Last week I wrote about scope getting decided by default. Readiness is the deeper version of the same problem. Skip the work and you don't have a real choice between paths. You only have the illusion of one. Across enterprise programs I've delivered on four continents, the predictable failure has not been the platform decision. It has been the assumption that picking the right path substitutes for the work that should have happened two years earlier. No technology decision compensates for an unready organization. #SAP #DigitalTransformation #ProgramGovernance #ERPModernization

Your Year 1 retention is 95%. Your Year 3 retention is 60%. Translation: you're great at selling and terrible at delivering ongoing value. Early retention rates don't mean anything. Year 1 customers are still in the honeymoon phase. Year 3 customers have seen your roadmap promises turn into excuses. The cliff happens because sales sells transformation and delivery delivers features. The gap between expectation and reality grows every quarter. By Year 2, the original champion who bought your vision got promoted. The new team inherited a tool they didn't choose. By Year 3, they're evaluating alternatives. Here are a few ways to stop the bleeding: - Map customer success milestones to actual business outcomes, not product adoption. - Quarterly business reviews that focus on ROI delivered, not features used ("You've saved 47 hours per month, worth $23K in labor costs"). - Expansion conversations tied to solving new problems, not selling more seats. - Proactive health scoring based on engagement trends, not just usage metrics. - Champion mapping and succession planning when key contacts change roles. Also, try tracking retention cohorts by these factors: - Original champion still at company vs. departed. - Time to first measurable ROI (under 90 days vs. 6+ months). - Number of stakeholders trained in first year. - Expansion revenue in Years 1-2 vs. flat usage. After all...customers don't renew software. Instead, they renew OUTCOMES. If your product isn't solving bigger problems in Year 3 than it did in Year 1, why would they keep paying for it? Your renewal strategy shouldn't start 90 days before expiration. It should start the day they sign.

SAP's Strategy and the Power of Diverse Perspectives This week's discussions surrounding my blogs on Frank Albrecht's observations about the role of "non-SAP" partners and the potential of Agentic AI within the SAP ecosystem have been incredibly insightful. The diverse perspectives shared, particularly by Shaurin Shah, Wayne Holtham, and David Hilcher, have enriched the conversation and prompted me to delve deeper into these issues. Concerns from ERP Veterans The concerns raised by these ERP veterans highlight a growing unease with SAP's current strategy. Shaurin Shah emphasizes the limitations of SAP's ERP systems, particularly their focus on "purchases" rather than "people," which can hinder innovation. He suggests that decoupling AI and machine learning components from the core SAP system could foster innovation and allow customers to retain ownership of valuable business knowledge. Wayne Holtham criticizes SAP for competing with its partners and pushing immature products onto customers, eroding trust and damaging relationships. David Hilcher points to SAP's "Eurocentric" culture as a root cause of its problems, where a "one-size-fits-all" mentality and a lack of customer-centricity stifle innovation and fail to meet diverse customer needs. Addressing the Concerns These concerns raise important questions about SAP's future direction. To remain a leader in the ERP space, SAP needs to address these issues head-on. Collaboration and Customer Centricity: SAP should re-evaluate its relationship with partners, prioritizing collaboration over competition. Actively listening to customer feedback and needs is essential for delivering mature, customer-centric solutions. Embracing Openness and Flexibility: SAP could benefit from embracing a more open and collaborative culture, both internally and externally. Balancing standardization with flexibility and customization will be key to meeting the diverse needs of its customer base. Innovation and Adaptation: Decoupling AI and machine learning components, as suggested by Shah, could allow for greater innovation and adaptability. Embracing new technologies and business models is crucial for SAP to remain competitive in the rapidly evolving enterprise software landscape. The Way Forward The SAP ecosystem is at a crossroads. By addressing the concerns raised by ERP veterans and embracing a more open, collaborative, and customer-centric approach, SAP can continue to thrive and deliver value to its customers. For a more in-depth analysis of these issues, please refer to my white paper: [Concerns from ERP veterans over SAP's current strategy] https://lnkd.in/eXz7hQWG Disclaimer: The views and opinions expressed in this blog post are my own and do not necessarily reflect the official policy or position of any company or organization.