Complete replacement of Microsoft will require more than 1.5 billion rubles: How Lamoda imported substitutes ERP

Speaking at the TAdviser conference "IT Retail Day 2025" on March 12, the director of the department of business applications and platforms Lamoda Stanislav Gotz spoke in detail about the import substitution project ERP in the company. A little earlier, he briefly mentioned this project, speaking at the TAdviser conference "Import Substitution 2025: Real Experience," and he aroused great interest from the audience.

At the beginning of 2022, the company was in the project of upgrading its imported ERP - Microsoft Dynamics 365 - to a new release in the cloud. Lamoda implemented the SaaS version of ERP, but in view of the subsequent events of 2022, it was necessary to think about what to do with what had already entered the cloud from Microsoft. First of all, it was necessary to minimize the risk of disconnecting the cloud solution. To do this, the company moved everything as it was from the cloud to the on-premium version, deployed it on its servers and launched ERP in its infrastructure.

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Фото: TAdviser

Then it was necessary to make longer-term decisions: in particular, what to do with the part that has not yet reached the upgrade. One possible option was to carry out a full upgrade, as originally planned. But then the risks of problems with obtaining updates were high, says Stanislav Gotz. And in general, continuing to use ERP based on an import solution was fraught with high risks.

The second option is to "forget about what we were doing" and launch migration to some kind of domestic solution, starting essentially all over again. But in this case, it was a pity for the time, effort and resources already spent by the team. In addition, it was not obvious how suitable domestic solutions would be, including in terms of performance for the implementation of the operational commodity accounting that was previously conducted on the basis of Microsoft Axapta.

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Фото: From the presentation of Stanislav Gotz

Here there were concerns due to the large volumes of business: for example, as of March, there are 14 million items in ERP Lamoda with an approximate growth of 3.5 million SKU (Stock Keeping Unit, a unique warehouse identifier of goods) per year. Also, over the year, the company generates more than half a billion lines of accounting documents, which, in turn, generate more than 1.5 billion warehouse commodity transactions.

As a result, they decided to take the entire operational framework, that is, commodity accounting, to Dynamics, and import substitution of the remaining part related to accounting, finance, etc. This is more convenient, given the volume of Lamoda's business, Stanislav Gotz explained. Another reason for such a decision is the complexity and volume of changes and customization already made in the operating loop: I did not really want to redo the same on the new domestic ERP system.

At the stage of choosing a domestic solution, Lamoda considered "1C: Accounting," "1C: Holding Management," "1C: ERP." Migration was subject to the processes of regulated accounting, tax accounting, treasury, and development was considered to leave what is related to IFRS and corporate procurement management. As a result, we settled on the decision "1C: Management of the holding."

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Фото: From the presentation of Stanislav Gotz

During the project, the company faced a number of challenges. Firstly, Lamoda did not have a ready-made team that could carry out this project. Therefore, a contractor was chosen who, together with Lamoda, could implement migration. In addition, Lamoda hired a small core team in order to have an expertise on "1C" and inside.

Another challenge was the difference in the approaches of regulated accounting in Dynamics 365 and 1C and the phased launch with the subsequent implementation of IFRS and procurement management. Here, minimizing risks was helped by attracting a third party from the Big Four to the project to check the project solution in the field of accounting and tax accounting.

In addition, it was necessary to combine with the current IT landscape on fundamentally different systems. As a solution, Lamoda maximally distributed business processes across systems without overloading integration. At the same time, there were still 36 integration flows between the operational and financial contours.

The challenge was also the timing of the project: they began it in March 2023, and it was required to launch it by January 1, 2024, based on the peculiarities of accounting processes. The hard prioritization of all changes and automation helped to cope with it, postponing everything else to "after launch."

At the same time, in fact, it turned out that for accounting to launch on the new system from January 1 was not too joyful, since at that time they had the closing of the year and a lot of their problems. However, the project could not be postponed either. Stanislav Gotz calls this a lesson for the future.

In addition, quite simple things like NSI migration took a lot of time, resources and effort. This is partly due to completely different data structures and the need to combine them in one system.

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Фото: From the presentation of Stanislav Gotz

Stanislav Gotz also shared what the team would do right away if they went to the project taking into account the experience gained. For example, they would conduct load testing. It was already in the plans, but they did not have time to carry it out in full due to the extremely tight project deadlines. As a result, they were faced with the fact that the system based on "1C" even on the current data volumes somewhere "did not take out," and something had to be rewritten and radically redone on the go.

Also, from the very beginning, they would provide a single window for working with users during the primary support, because if messages are received on the first support line in different channels, chaos begins, and the management of these problems becomes very problematic.

Stanislav Gotz clarified that while the solution remains as it is - that is, Microsoft ERP is also present for operational, commodity accounting. But since this system is in a completely isolated loop, the risks to the company are minimal. And the potential project of its replacement in Lamoda is estimated at more than 1.5 billion rubles and about 3 years of work, and so far there is no point in such investments.

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