Given that the collapse of IBS-STL UK has largely been attributed to its failed SAP implementation, the following timeline (which undoubtedly has a few gaps) may prove helpful in formulating the questions that should now be asked in order to ensure that a disaster like this doesn’t happen again. The fact that SAP was intended to be a global roll out but stopped here in the UK also raises questions: I reflect briefly upon some of these at the end.
October 2007: Groupsoft announces the start of SAP implementation in the UK, the first phase of a proposed “multi-country” roll out:
IBS-STL is one of the largest Bible and Christian literature ministries in the world – they translate the Bible into world languages that have 1 million or more speakes and distribute the Bible—and evangelism and discipleship literature—to people who might never learn about Christ any other way.
Groupsoft is implementing SAP Retail ECC 6.0 – across their multi-country distribution systems – in US, UK, South Africa, India and China.
23 October 2008: STL UK website and order processing suspended for SAP installation.
28 October 2008: SAP goes live.
3 November 2008: STL Blog: Apologies are offered as problems rapidly become evident. Delays in order despatch and tracking are acknowledged:
As planned the system went live last Tuesday and we were able to despatch some orders. Orders continued to be despatched everyday last week, although it wasn’t until Friday that we experienced a relatively trouble free day and were operating at anything near full capacity. We do continue to experience some issues which may cause some inconvenience, e.g. the interface with Fed Ex is not yet operational and we are unable to advise you exactly where your order is once it has left our Warehouse.
5 November 2008: STL Blog: “some technical difficulties with a small number of orders” acknowledged. Problems with carriage charges on backorders noted.
6 November 2008: I report briefly on the situation from a retailer’s perspective: STL: Back Online but not Back Up to Speed
14 November 2008: Timing isn’t the issue – Mark Hurley: Decision to ‘Go Live’ with SAP in the run up to Christmas 2008 is defended as having been taken “at the highest level”. Trade customers express dismay as orders remain unfulfilled.
19 November 2008: Steve Mitchell presents SAP Go Live to the Booksellers Association Christian Booksellers Group (BACBG). In an open letter to trade customers, Graham Sopp apologises for ongoing problems, although problems are attributed to “business process bottlenecks” rather than to the software itself:
We originally planned to implement the new system in August. However as the date approached, it became apparent that further testing of the new system was necessary before we could commence training people in how to use the system. We were faced with a choice of going live in late October or waiting until January 2009. Unfortunately, we would have faced immense difficulties in standing down our external project team of consultants for three months while we prepared to go live and then to re-assemble that team in January. After extensive testing of the system we were confident we could start with, at most, minor disruption. So we took the decision to go live in October.
Most of the problems we have encountered over recent weeks are related to business process bottlenecks and are not directly related to software and, in fairness to the system team, could not have been anticipated by the extensive testing we carried out.
22 December 2008: STL Blog: In the face of continuing difficulties faced by trade customers, a detailed explanation and defence of the SAP implementation is offered: Why SAP and why now??
19 January 2009: Trade customers receive further apologies for delays in despatch along with the following explanation:
The reason for this is our team of consultants are still working on solving a number of bedding down issues in SAP where orders can get stuck in the system.
Asked about the recent difficulties which the trading arm of the charity had been experiencing in the UK, following the introduction of new systems at its warehousing operations in Carlisle, Danby said, “SAP has been a very big investment for IBS-STL. We made this investment because we believe this will ultimately give us a Global Enterprise System.”
With regards to the timing of the implementation he commented, “When we embarked on this project we wrote into the contract that we would not ‘go live’ during the autumn trading period. Originally, it was to be launched in the spring. Like all major computer projects, there was slippage and the revised date was then end of August which slipped to September and the finally to October. At one time we had over 20 SAP consultants working to keep deadlines.” He also stated, “It is important that you know that Graham [Sopp] was not asked to step down as CEO because of the SAP problems.”
Danby also made the point that had the system not gone live in October then the launch would have had to be held back to March 2009. “Delaying to March would mean the SAP consultants having to leave for 4-5 months … as they are all freelance consultants, getting them to come back as a team was regarded as unlikely.” The SAP software was successfully installed “and it works” said Danby, “but we encountered significant operational procedure problems”. He admitted that more time was needed for testing it with their operating procedures than had been anticipated.
“We have spent 21 years being committed to serving the UK Christian Retail trade”, he said. “We take failures like this very seriously and I say again we are deeply embarrassed and sorry.”
25 February 2009: STL Blog: Update given on returns, receiving and backorders:
Single line backorders are still occuring; however we have seen a substantial reduction in the incidence. Our team along with consultants from SAP are continuing to work on resolving the residual issues.
8 April 2009: STL Blog: Message from Keith Danby acknowledges ongoing unresolved issues “with the new IT system” and announces the appointment of Andrew Clyde as Director of IT with specific responsibility for SAP development work.
1 May 2009: STL Blog: Problems with SAP blamed for Invoices with 0% discount:
If for a new product a product group is selected on a discount matrix where no value is maintained then SAP will apply no trade discount to the order – the result on your invoice is 0% discount. So how could this happen? Well, SAP is not able to automatically check that for say a particular Authentic book the combination of product group and customer group is correct.
14 August 2009: STL Blog: Trade Announcement from Keith Danby states:
A number of factors including the SAP implementation have caused STL Distribution serious Supply Chain difficulties, which have resulted in severe cash flow problems.
16 November 2009: Biblica announces the sale of its UK operations and lays much of the blame for the crisis upon the problems with SAP. This is perhaps best summarised in Tania Mason‘s report for Civil Society, Top-250 Christian charity to close, 18/11/2009:
David Young, the charity’s UK general manager, said the charity had been struggling financially for some time but the failed attempt to install an Enterprise Resource Planning (ERP) system in October 2008, that should have integrated all its warehousing, sales and customer services, was the nail in the coffin.
“We installed the accounting software a year earlier and on its own it worked fine, but the implementation of the ERP caused all kinds of problems with inventory and it was just as the recession hit. Those two things together gave us serious problems.”
They resulted in significant cashflow pressures, excess stock, and supply chain and service difficulties in the charity’s distribution and retail units. […]
[…] SAP is yet to respond to IBS-STL UK’s criticism of its ERP system. A spokeswoman told Civil Society: “They are still talking about and trying to get to grips with the problem.”
18 November 2009: STL Distribution USA issues a statement — cited at Christian Book Shop Talk — to counter rumours that its operations are also under threat, advising customers (amongst other things) that
The US organization has not attempted to install the SAP software, and our systems are not affected by the attempted installation in the UK.
The fact that the USA division (and presumably the other international divisions mentioned in Groupsoft’s October 2007 announcement) has not attempted to install SAP raises at least two questions:
- At what point was the decision made to discontinue the global roll out?
- Why, at that point, was the UK implementation not halted?
To an outside observer — judging purely by the extent to which the blame for STL UK’s crisis has been placed on the SAP implementation failure — it appears that IBS-STL UK, its employees and trade partners seem more than anything else to be paying the price for drawing the short straw: for being unfortunate enough to be first in a roll out that was part of a much grander scheme. If the implementation had first been attempted in the USA, South Africa, China or India, would it now be one of those divisions fighting for survival instead of the UK?
Clearly other factors have been at play, not least the state of the economy, but the SAP implementation had to start somewhere and it is a tragedy that Biblica, in the end, did not have the necessary resources to support the division that drew that terrible short straw.