The confectionery giant decided to implement SAP S/4HANA and regretted. Sales dropped by 25%

In January, 2019 it became known of failure software implementation of SAP by the German confectionery company Haribo. The famous producer of fruit fruit jelly carried out digital transformation, but after transition to S/4HANA of sale failed as the company could not fill the shelf of shops with the goods in time.

According to the German newspaper Handelsblatt, SAP implementation of S/4HANA in IT infrastructure of Haribo began in October, 2018. Thanks to this project the company wanted to refuse diverse schedule systems of resources of the enterprise (ERP) to which 16 confectioneries in 10 countries were connected. On some objects the technologies created in the 1980th years were used. Haribo said that the company had no "alternative" to SAP products.

The confectionery giant Haribo decided to implement SAP S/4HANA and regretted. Sales dropped by 25%

Leaving as writes the TechRepublic portal, demands considerable manual efforts for conversion of business processes and workloads that those corresponded to the modern systems from such outdated developments. Further work with old technologies, is equal as their upgrade promises problems irrespective of the software on which the company migrates. And it turned out in a case with Haribo.

As a result of unsuccessful transition to software of SAP sales of the Gold Bear gummies (in Russia is on sale under the name "Gold Bears") in 2018 were reduced by 25%. The matter is that because of the incorrect work of computer systems connected with updating of IT infrastructure, supply of confectionery to supermarkets was delayed. The Wirtschafts Woche edition confirmed absence in shops of some products Haribo for several days.

In Haribo blame not only the IT project with use of a SAP software. The company as her representative told Handelsblatt, too strongly focused on niche products. Haribo also reported that the worst times connected with violation of deliveries of products to sales points, already behind.^[1]

We see that our opportunities of delivery continue to improve day by day and week after a week" — the representative of Haribo noted.

Except Haribo, in connection with product introduction of SAP also other German companies failed

Haribo is not the first company at which the SAP project failed. In August, 2018 one of the world's largest retailers Lidl announced premature completion of software implementation  of SAP. The supermarket chain in seven years spent about half a billion euro for this project, however this amount appeared insufficiently in order that a system earned properly. Read more here.

The CEO of consulting company Third Stage Consulting Eric Kimberling says that in the course of digital transformation of the company should be ready to changes and possible difficulties. The case with Lidl showed that "even small parts can undermine the project", he noted.

Eric Kimberling

According to Kimberlinga, the companies which among the first began to pass to SAP S/4HANA by the beginning still continue to do to 2019 it, and conversions in the large organizations are more difficult in comparison with small and medium business.

Success of digital transformation depends on people, processes and technologies, and in the latter case planning of conversions can be short-sighted, considers Kimberling, indicating unsuccessful implementation of software of SAP in Lidl and Haribo.

The head of Third Stage Consulting also emphasized that reductions of number of staff in the companies as a result of digital transformation are, as a rule, minimum, but dismissals happen, especially when employees have no skills or interest in use of new software or when they they are threatened by automation perspective.

According to Wirtschafts Woche, except Haribo, in connection with product introduction of SAP also other German companies failed. So, in 2015  Deutsche Bank  stopped the SAP project under the internal name Magellan which the bank wanted to use for integration of the purchased credit institution of Deutsche Postbank. According to some information, Deutsche Bank in vain spent the large nine-digit amount.

In 2012 the Otto Group company (works and in Russia) specializing in remote trade and e-commerce suspended the software implementation of SAP which began three years before. The project had to integrate numerous IT systems of group, but as a result IT infrastructure only became more difficult.

At the end of 2015 postal public service of Switzerland declared Swiss Post officially that after software installation SAP was 308 million euros within the project are written off and 37 million euros for rollback of systems are spent.

As a result of unsuccessful transition to software of SAP sales of the Gold Bears gummies in 2018 were reduced by 25%

The largest German supermarket chain Edeka  according to the results of the project with use of SAP solutions in 2012 called the created system "one of the most difficult in the world in recent years". It was initially supposed that expenses on the project designed to standardize difficult processes of management of purchases and goods will make 200 million euros, however six years during which there was implementation later, costs reached 350 million euros.

According to the IT analyst of consulting company Avispador Axel Oppermann, software implementation of SAP usually represents the large IT project as it covers all activity of the company — from production and inventory management of products to finance and the personnel. SAP S/4HANA is rather new product therefore the companies lack experience for its implementation, the expert believes.

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