Friday, 27 July 2018

What can we learn from this: Lidl cancels SAP after 500M Euro and 7 years

I highly recommend the postings which caught my eye and caused me to think about lessons to learn.

What is really interesting to read is the previous positive news story (May 2015)

What changed?

My first point to check what to see if the IT person at Lidl had left. He hadn’t. But the fact that he arrived March 2015 suggests there was already a review ongoing when the positive news story (May 2015) was being planned.

So what happened?

In short I don’t know. But it is interesting to speculate not necessarily about Lidl or SAP, but about the circumstances when you should pull the plug.

1. Projects should be future focussed: All project should be forward looking to the benefits ahead rather than nostalgia or loyalty for the past.

2. Projects should align to measurable benefits: The purpose of a project should be to achieve a measurable outcome (time, cost, quality, reputation, market share etc.) If the circumstances change affecting the outcome it is simply foolish to press on regardless.

3. Projects should have key performance indicators for progress: It is important to know that projects are progressing forward and not just consuming cash and resource. I have seen too many projects where the wheels are spinning but there is little traction and less progress.

4. Projects should be small or phased: I have long argued that monolithic projects fail and the key to success is momentum. A series of smaller projects or discrete phases reward success, create confidence and capacity and provide agility.

All entrepreneurs argue that it is better to fail fast, fail early and fail forward. This means if you can see something is not going to work pivot or abandon but don’t madly plough on regardless.

I broadly accept the entrepreneurs’ argument, but I would first say that before you pivot or abandon make sure you have genuinely tried. Too many projects fail for a lack of ownership, planning, priority or resource. Maybe you project isn’t a bad one, maybe you just have not properly committed what is necessary to achieve it.

Of course internal competence or capacity may be grounds to pivot or abandon: But be clear whether the issue is that the project is ill conceived, the benefits are simply not there, or you don’t have the wherewithal to do it properly. Each provides a different lesson even if the outcome is the same.

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