Sobeys is a Nova Scotia business success story, and we can all only wish to have the entrepreneurial spirit that the Sobey fouders had. It's just too bad those founders could not have been around for the debaucle/gong show/SAAS nightmare/waste of 85 million dollars. After a failed attempt to implement SAP software at a cost of a cool ~80 million dollars, Sobey's executives are pulling the plug on the project. Most news articles reference the fact that Sobey's DB2 database failed (which it did, and IBM has publically apologized for) as the reason they had to scrap the money losing technology project. 

 

 "It was a situation where we had a business disruption. We looked at an evaluation of our enterprise-wide software and that resulted in the decision, so I would be surprised if there was a change in conclusion," said Stewart Mahoney, vice-president of treasury and investor relations for Empire Company Ltd., which owns 62 per cent of Sobeys.

  

As a guy who has been PM, Dev, Business Manager, and financial backer for a number of "3rd part technology" projects in the past, I can honestly say that I feel Sobey's pain on this one. I've found that vendors just don't give a damn beyond the initial implementation process. For a firm as large as Sobeys, SAP project managers should have spoon-fed the Sobey's IT and implementation team the whole way along.

 

It's kind of funny in that when you seach the term "sobey" on the SAP website, you get 4 outdated articles about how "sobeys chose SAP" - it's the classic press release premature ejaculation. In fact, I'll bet Sobey's led SAP on by saying they'll participate in case studies and press releases for a deep discount in the SAP software to run it's Atlantic Canada based grocery supply chain.

 

"We indicated we plan to move ahead without SAP and Mr. McEwan and the Sobeys' board of directors were quite clear in terms of Sobeys coming to that conclusion," he said.

 

Mahoney added the project will cost the company $89.1 million and Sobeys is predicting the interruption of business will cut its quarterly operating profit by 16 cents a share.

 

"We're through with that period. But there was an opportunity cost there because that's a busy period for us leading up to the Christmas period," Mahoney said.

 

SAP has been working with the company prior to this project, implementing a human resources and financial system. In fact, SAP and IBM were using Sobeys as an example of a satisfied customer.

 

Sobeys has not said what they will use to replace the SAP system but will continue to use the software for its financial and human resource needs. In a statement issued after a meeting on Jan. 26, SAP said it "agreed to continue discussions with Sobeys in private."

"It is true we have had discussions with Sobeys about various aspects of its projects that needed to be resolved," said Wohl.

 

Angela Carmichael, an IBM Canada Ltd. spokesperson said there was a problem with Sobeys' DB2 database but it was addressed and Sobeys remains a customer. "We put our best people on it and fixed it as fast as we could," she said, "They're still using DB2 in other parts of their business."

 

Wohl suggested a change in leadership at Sobeys may have precipitated the decision to dump the project. He pointed to McEwan's arrival Nov. 25, just as the crash occurred.

 

Derek Prior, SAP research director with Stamford, Conn.-based Gartner Group Inc., said SAP is ahead of other ERP software vendors at sizing the infrastructure for their applications, but said ongoing assessment of an ERP life cycle is also needed.

 

"You don't hear of these failures frequently. The successes are much higher, but successes aren't news," said Prior.

 

"Overall, SAP has a good record of getting sizing performance right. But within the retail sector there have been projects which run into problems due to the very high volumes and narrow time windows involved."

 

Prior also questioned why Sobeys waited so long into the project to reject SAP.

 

Mahoney said the system has been problematic since its launch a year ago. "We had been behind our timeline and there had been a number of issues," he said.