I saw an interesting post in my LinkedIn feed this morning. It was about the author’s thoughts on Lidl and their decision to abandon their SAP project after spending 500M Euros and 7 years.
This isn’t the first time a big initiative has been undertaken and abandoned – and it certainly doesn’t only happen in IT projects. I’m sure we can all think of construction projects, expansion plans or other efforts that have been derailed or cancelled even after a great deal of effort and investment.
Heck, I’m sure you know at least one person that spent a lot of time and money on college and bailed before the diploma. While that wouldn’t cost 500M Euros, if we look at the impact from a scaled perspective, Billy’s time and tuition was probably equally devastating to his parent’s.
When I hear about things like this, my first thought is usually “Why did this happen?” That thought is quickly followed by “What are you going to do about it?”
Obviously, my line of thinking isn’t unique. There were many comments on the post, and other stories about this project, that identified who was to blame, made assertions as to what must have happened and stated what Lidl should have done instead. In case you weren’t aware, social media can be a bossy, opinionated place.
Since I wasn’t a part of the project and don’t have visibility to the details, I can only look for the lessons that I see from my perspective and experience. So as a project manager who has been implementing core business systems for nearly 20 years (yikes), here are some of the questions that come to mind (for any project, really):
Do you know where you’re going? Before starting, did you clearly define your current state, your needs and expected outcomes? You’d be surprised (or if you’re a PM, maybe you wouldn’t) how many teams will launch into a project without clearly defining current processes, status and metrics – and what is expected after implementation. Your definitions must be clear and measurable.
It can be like pulling teeth to get this information sometimes. But if you don’t know where you’re going, how will you know when you get there? “I want better visibility to financials” is a good start, but not measurable. Take the time to get clear definitions and measurable expectations up front and you can save yourself a lot of time and money – and Excedrin.
Do you have buy in? Are you sure? Just because you have an executive sponsor does not mean you have full buy-in. That executive sponsor is critical. However, you need to make sure you have everyone impacted by this new solution on board – throughout the project. I know it can be an enormous communications challenge, but you will experience resistance, delays and sometimes even sabotage if you don’t maintain buy-in.
Do You Have the Right Team? I would put money that the cause of the failure of this project was not the software. SAP has been successfully implementing solutions all over the world for years and if there were product flaws big enough to cause this catastrophe, we would have heard about it.
But solid product components won’t prevent failure. You can have the perfect software and the perfect hardware for your solution – and the whole project can tank if you don’t have the right team. In my experience, human factors are, by far, the biggest contributors to the success – or failure – of a project.
You need a solid team that is comprised of experts in the components of your solution (the software and the hardware), key subject matter experts that can represent your company (and advance the company’s project tasks), possibly process consultants or other strategic experts (depending on what you’re trying to accomplish with the solution), and strong implementation experts to bring everything together.
The Right Team will work together as professionals (any politics, rivalries or personal feelings are set aside – unfortunately, I’ve seen this problem more than a few times). They will conduct their work thoroughly – under the quality, time and budget set at the project definition. And they will communicate – consistently and transparently.
Project execution is a team sport. And every player on the team must play their position to the best of their ability. When individual players have a weak performance or fail, the whole team suffers and the game is at risk for loss. And yes, I’m starting to get excited/distracted by the start of football season.
Did you pick the right project methodology? I’m not a PM that is religious about only using one methodology for managing projects. Many will evangelize the benefits of Agile or Waterfall or others. I’ve never had the luxury of operating in an environment with a pure approach. My projects have all used a blend. Many comments on the article pointed to wrong methodology as being a cause of failure. I disagree.
In my experience, the key is to select a methodology that will work for your organization and culture. If you need frequent, iterative results – go with agile. If your team needs a more traditional approach, then waterfall may be a better selection. Maybe, like my clients, you need a blend. Regardless – identify what will work best for your team and corporate culture.
Did you follow the plan? Once you agree on it – the key to success is to follow the project plan. I’m making the assumption that the plan was complete addressing cost, scope, quality, risk, etc. that comprise a professional project plan according to us PMI folk.
If you didn’t follow your plan – or if your plan has had so many changes that it no longer resembles the original – then your plan wasn’t complete. Or one of the earlier questions wasn’t addressed positively (project definition, function requirements, etc.). If you aren’t following your plan, you will fail on scope, time or money – if not all three.
What are you going to do about it? Honestly, that should be in your project plan too. Risks and contingencies are critical part of plans. If things start going wrong, you should have a plan to address it – before you lose 500M and 7 years.
I’m guessing that there were issues on the Lidl project that cut across many of my questions here (and likely more). Again, I don’t have all the facts of what happened for them. But as one who has stepped in to help failing or failed projects, I would hope there would be a way to avoid going back to their old system and salvage at least some of their initiative investments.
This isn’t the first massive investment lost in the quest for system improvement. But there are many, many ways to avoid such a loss in the future. My questions here are really very basic, and it would be arrogant of me to assume that I can determine what happened or what should be done next without a far more detailed understanding of that project. But in my humble opinion, when you’re faced with cleaning up a failing project, back to basics is often a good place to start.
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Anne Hale is the Director of Client Services at HL Group, Inc., a premier provider of mobile inventory management, RFID and supply chain solutions. She manages our client engagements, helps with sales and marketing and has led the clean-up crew on more than a few failed projects.
