L’Oréal extends higher performance and supports sustainability goals with SAP on Azure within the Americas

L’Oréal is now extending the successful migration of the company’s SAP business applications to Microsoft Azure, which has already reduced its operating costs in Mexico, Brazil, and Argentina. With SAP on Azure, L’Oréal’s US and Canada teams can cut costs, help support sustainability goals, and further improve supply chain technology to get products to consumers faster.

Flexibility never looked so good

SAP has been at the heart of L’Oréal operations within North and South America for 15 years. Used for essential tasks like invoicing, reporting, shipping, and point of sales, SAP is the company’s system of record and single most important application suite. The L’Oréal IT Americas team began implementing a cloud-first strategy in 2020, prioritizing the migration of its five on-premises SAP environments as an essential first step. The company hoped to solve SAP-related performance challenges and build greater flexibility.

L’Oréal commenced its SAP cloud journey within the Americas as a proof of concept (POC) for its Mexico instance. The success of the Mexico POC led to the migration of its Brazil and Argentina SAP environments in mid-2020, and by the middle of 2022, L’Oréal had completed the migration of its Canada and US SAP modules. Its SAP on Azure environment consists of SAP ERP Central Component and SAP S/4HANA for databasing and reporting. It uses Azure Virtual Machines to run its SAP workloads, Azure ExpressRoute to connect to Azure in a highly secure way, and Azure NetApp Files to boost the performance of its huge database.

L’Oréal credits part of its migration success to its close collaboration with Microsoft, which provided ongoing guidance and support. Susannah Greenberg, Chief Information Officer at L’Oréal Americas, recalls, “Microsoft was with us throughout the entire journey—it was the one constant. Our migration wouldn’t have been as successful without the Microsoft partnership value add.”

Better performance, lower costs, and reduced emissions

Migrating to SAP on Azure greatly enhanced performance. In the past, reporting was incredibly time-consuming, which at month’s end caused delays and other headaches. But after the migration, “We were able to speed up lengthy transactions by 10 and even 25 times with SAP on Azure,” says Greenberg. “Something that previously took 3 hours now takes 5 or 10 minutes.”

With faster transaction times and flexible cloud resourcing, L’Oréal can quickly adapt to internal needs and rapid changes in the market. It can scale up its environment in a matter of minutes during critical times like holidays and key selling periods, then scale back down easily afterward. Before, L’Oréal would have had to build a system to accommodate peak volume and then have it sit idle most of the time.

The migration helped the company decrease its costs. By converting from CAPEX to OPEX with SAP on Azure, L’Oréal has gained at least 19 percent in savings, and it’s getting more value from its investment with the increased flexibility it now has. “L’Oréal is absolutely committed to carbon neutrality, and we’re making huge investments company-wide to have the most eco-friendly infrastructure possible,” says Greenberg. “Our move to Azure means we can take advantage of the investments Microsoft is making.”

The company’s ability to adopt new cloud-based tools also helps its business partners lower their emissions. Since migrating to Azure, L’Oréal can support supply chain tools it could not have run on-premises to enable more efficient transportation and supply chain management practices—a benefit it can pass on to downstream partners so they too can reduce emissions. By enhancing its supply chain capabilities, L’Oréal’s US and Canada teams can better ensure products get to market and customers are better served.

The beauty of innovation

L’Oréal has positioned itself for accelerated innovation by moving to Azure. Now that its environment performs so well, the company’s IT staff spend less time fixing issues and more time creating and delivering valuable solutions. Business stakeholders are requesting more innovative solutions as they understand how flexible and scalable the new environment can be. L’Oréal has seen a 40 percent increase in its SAP user experience since its migration to Azure. And it’s noted enthusiasm from employees across the business about the possibilities offered by the new environment. L’Oréal can now better support innovation efforts and move faster than it could before, accomplishing things in hours or days that used to take weeks or months. Technology is no longer an inhibitor to innovation for the company, it’s the driver.

L’Oréal plans to continue optimizing its SAP on Azure environment within the Americas and identifying opportunities to integrate SAP with other business technologies. The company is considering the full potential of the Microsoft Cloud and how it can connect its Azure-based SAP data with Microsoft Teams and Microsoft Power Platform to unlock future innovation opportunities. Notes Greenberg, “We had an incredible fourth quarter last year, and our systems were stable despite business being heavier than anticipated. I’m excited to continue supporting business growth as L’Oréal gains market share, and through the scale and innovation we gain with Azure, we can help enable that success.”

When asked what advice she’d give other leaders who are contemplating moving their SAP estates to Azure, Greenberg concludes, “It shouldn’t be a question of, ‘Shall we do this?’ because I think it’s imperative to do it. It’s just a question of how.”

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