L’Oréal Americas streamlines operations and boosts sustainability by moving to SAP on Azure

Global brand with a purpose

Beauty is universal—but it varies by person, style, culture, definition, and preference. With a rich history and unique expertise acquired over 110 years, L’Oréal understands in precise detail the desires and aspirations of consumers around the world. As the world’s leading beauty company, it has more than 35 brands in 150 countries.

People are the foundation of the way L’Oréal works. The company values the consumer and considers the needs of technology across all geographic regions. L’Oréal divides its business into seven geographic zones and Travel Retail. “We have a global IT strategy that serves all L’Oréal markets while balancing delivery of capabilities in a way that meets unique local and enterprise needs,” says Michael Kingston, Deputy Group Chief Information Officer and Chief Information Officer L’Oréal Americas at L’Oréal.

The company already uses many SAP business applications and wanted to maintain continuity while increasing scalability and flexibility of its IT environment. It wanted to move its SAP environment to the cloud to support agility and innovation, and to reduce its use and cost of resources.

Sustainability is a key priority for L’Oréal, and each business entity is responsible for contributing to this mission. One reason the company considered the cloud was to switch to a consumption-based format, so it would only consume exactly the resources it needs.

Careful choice, methodical migration

The L’Oréal IT Americas team spearheaded the cloud provider evaluation. The team completed a proof of concept (POC) in Mexico before deciding to adopt Microsoft Azure. “After considering three different cloud providers, we found that Azure fit best based on our interests and goals,” says Kingston.

The company uses SAP applications for financial accounting, HR, materials tracking, sales management, and warehouse distribution. With so many critical applications on SAP, L’Oréal took careful steps to ensure a seamless transition to SAP on Azure. “Azure is enterprise-ready and high-performing,” says Kingston. “We chose SAP on Azure because we run such critical workloads on SAP. We couldn’t risk disruptions to the business, and we trusted the stability and robustness of the Azure services.”

The L’Oréal team also used Azure ExpressRoute to quickly connect Azure to its on-premises infrastructure. Thanks to the Mexico POC, the team had learned how to properly test the environment performance and ensure that production workloads could continue expanding. They also determined the level of effort and communication best practices from the POC. The Microsoft account team supported the L’Oréal Americas team every step of the way, and the migration went smoothly.

After Mexico, the L’Oréal team migrated Brazil and Argentina to SAP on Azure in mid-2020. The process blended a mix of re-platforming, rearchitecting, and lift and shift across workloads. The business unit operated briefly in a hybrid environment as the transition was underway. It has now completed all environments in Latin America with plans to expand to other markets.

Increased performance, decreased costs

L’Oréal has met and at times exceeded its goals to improve performance, scalability, and reliability, particularly for disaster recovery. For example, the company reduced its disaster recovery testing time by at least half and can do upgrades in a fraction of the time that it used to spend spinning up the multiple environments to test and perform upgrades. L’Oréal now completes the entire upgrade process in less than a day instead of multiple weeks.

According to Kingston, the improvement in scalability and increased speed in IT tasks have led to cost savings. “We’ve definitely seen a reduction of our operating costs as a result of moving to Azure,” he says.

Even though most of the improvements are operational, the team believes this also translates into tangible improvements for customers. “Our platform has greater availability and performance in Azure than it did on-premises, which not only boosted how much value we got out of SAP, but has a positive impact on the supply chain and getting products to market, which benefits our consumers,” says Kingston.

Delivering on sustainability

L’Oréal delivers on its mission to stay on the leading edge of technology while also holding true to its values of sustainability and customer centricity. The L’Oréal IT team notes that the market has changed considerably due to technology in the last five years, especially with the evolution of e-commerce. The company wanted to focus on the tasks that generate value and help it make the right decisions at the right time.

L’Oréal will continue to increase automation, rely on cloud-based innovations, and consider emerging capabilities in AI and machine learning. Concludes Kingston, “The technology transformation that we've seen from moving to Azure is like the first mile of the marathon, and a catalyst for business transformation. We believe that using Azure will help us better understand where there are opportunities to create greater sustainability across our entire ecosystem and lower our footprint on the environment. We’re learning how to reach more customers, grow our business, and be more efficient.”

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