Case StudyIBM Global Business Services Consumer Products

The L’Oréal Group is a global leader in beauty products. Present in 130 countries across 28 international brands, including L’Oréal Paris, Garnier, Lancôme, Maybelline and Giorgio Armani, the Group achieved EUR 23 billion of sales in 2013. L’Oréal Group employs 77,500 people and registered 624 patents in 2013.

Global business, local footprintPerceptions of beauty are different the world over, so L’Oréal offers tailored products for each market. Meeting local consumer expectations in this way creates a major internal challenge around managing product information. L’Oréal’s portfolio contains several thousand international products, each described using more than 400 attributes, from general features and dimensions to packaging, ingredients and environmental data, adhering to regulatory and legal requirements.

With product information managed differently in multiple systems, and with varying standards and approaches across four Divisions and three geographic zones, L’Oréal lacked a single source of truth. This hindered internal reporting and planning, and made it harder to prepare statutory reports. Most importantly, it also had a direct impact on L’Oréal’s effectiveness.

Xavier Rodriguez, IS Project Director at L’Oréal, explains: “Inaccurate product information means higher costs for our distribution partners, which impacts L’Oréal in many ways. Another example is our difficulty in accurately reporting on packaging, which means that we are paying additional eco taxes.”

L’Oréal“Our customers expect the highest quality from our products; they should expect exactly the same when it comes to master data”

OverviewThe needL’Oréal wanted to drive business value from consistent and readily accessible product information, to enable new cross-functional strategic initiatives, and to support global optimisation.

The solutionWorked with IBM® Global Business Services® to deploy IBM InfoSphere Master Data Management and IBM Watson Explorer, and to design, build, roll out and support a federated repository of master data on product information.

The benefitSignificant improvements in the quality of product information, driving greater efficiency. A key enabler for strategic initiatives that will deliver significant benefits.

A major challenge was to ensure flexibility. “A central reference implies standardisation, but our global business needs are very diverse. With IBM, we created a master data repository that provides data consistency while facilitating local interpretation. Essentially, it provides the most appropriate information to each specific audience,” says Xavier Rodriguez, IS Project Director, L’Oréal.

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Business transformationL’Oréal needed to improve data quality and to align product information across all parties, from suppliers through to manufacturing, distribution and retail. Doing so ultimately assists the Group to get the right product to the right place at the right time, which in turn drives revenues and profitability.

“As part of our broader program to drive value from product information, we initiated a Master Data Management (MDM) project to provide a single, consistent repository for trusted product reference data,” says Xavier Rodriguez. “This strategic business transformation project is a key enabler for many cross-functional initiatives. It has obvious transformational value for the whole business, and is sponsored by our General Management.”

Credible global partnerAs previously stated, the strategic goal of this program is to drive value from product information. As an enabler, it aims to provide a single source of truth and a consistent point of reference for product information—both upstream to suppliers, and downstream to customers and consumers.

“MDM can be a complex subject, so we needed both expertise and a complementary IT structure in order to deliver the solution,” says Xavier Rodriguez.

Having helped L’Oréal to frame the entire program, IBM Global Business Services was identified as a truly credible consulting and implementation partner. “We needed a partner with global capabilities and deep MDM expertise, and IBM was the natural choice,” says Xavier Rodriguez. “Being able to get everything—business consulting services, MDM software and infrastructure (IBM Power Systems™, IBM AIX®, IBM DB2®)—from a single partner was a major factor in selecting IBM.”

Tackling enormous complexityThe technical enabler is IBM InfoSphere Master Data Management (MDM) software and IBM Watson Explorer. “The technical integration was the easy part; the challenge for IBM was to understand our organisational structure and how it relates to our business processes,” says Xavier Rodriguez. “Product information impacts practically everything we do across Manufacturing, Production, Supply Chain, and ultimately our customer base.”

As the scale of the challenge became apparent—creating a consistent yet flexible reference repository for complex information on thousands of products—IBM drew on its considerable resources to bolster the project team. “IBM brought in very senior MDM experts to deliver the expected value,” comments Xavier Rodriguez.

Solution componentsServices• IBM® Global Business Services®

Software• IBM AIX®• IBM DB2®• IBM InfoSphere® Master Data

Management• IBM Watson™ Explorer

Hardware• IBM Power Systems™

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“The solution needed to reflect the richness of our entire global organisation, which has different ways of working depending on our customers, geographical location, business unit, and so on. The solution is a complex federation of MDM repositories, on a scale that is unprecedented, as far as we know.”

Huge gains in information qualityToday, L’Oréal is continuing to refine the central solution and beginning its rollout across its consumer and luxury divisions in selected European and Asia Pacific countries, with the full global rollout on the horizon.

“The quality of product information is much greater,” says Xavier Rodriguez. “Stakeholders spend much less time resolving missing or incorrect data, and operational interruptions caused by poor information are disappearing.”

He adds, “Synchronisation is much better today, so we can work together more efficiently and effectively. Previously, finding product information meant searching multiple systems, each with their own business rules. Now everything is in one place, and the rules are clear. The benefit is a huge gain in the quality of data, which is a key enabler for strategic cross-functional initiatives in packaging, business controls, and soon in Digital Marketing.”

Unlocking new strategic benefitsBy enabling L’Oréal’s strategic initiatives, this solution will help deliver significant annual benefits. With a clearer understanding of products, L’Oréal will have much greater insight into downstream activities, enabling it to capitalise on a 360° vision of product information for all L’Oréal teams.

“These kinds of strategic initiatives are simply not possible unless the whole organisation speaks a common language,” comments Xavier Rodriguez. “One of the major strengths of IBM has been its flexibility to step outside of the original plan and help us tackle unexpected challenges. That willingness to take risks is a major competitive differentiator, as is the in-house expertise across all the major facets of the project: Architecture, Master Data Management and Change Management. IBM has consistently provided real experts at our expected level: we are satisfied.”

For more informationTo learn more about IBM InfoSphere Master Data Management software, please contact your IBM representative or visit: ibm.com/software/data/master-data-management

“We needed a partner with global capabilities and deep Master Data Management [MDM] expertise, and IBM was the natural choice.”

— Xavier Rodriguez, IS Project Director, L’Oréal

© Copyright IBM Corporation 2015

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Produced in the United Kingdom January 2015

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