Friday 17th May, 2013

A new three-year agreement with IBM aims to push L’Oréal USA's purchasing power to new levels by taking advantage of their advanced cloud analytics solution. The new services will enable the company to bring beauty products to consumers more quickly and efficiently. With this agreement, L’Oréal USA will partner with IBM to undertake a complete transformation of the buying, compliance and management of its vendor and supply process, ultimately leading to lower costs and increased supplier value. The company will tap a powerful portfolio of IBM procurement services, consulting and analytical expertise including a new analytics tool developed by IBM Research, as well as IBM SmartCloud commerce solutions. Together, these will help the marketing and procurement team at L’Oreal gain immediate and broad access to global data to make faster and more insightful decisions, while ensuring purchasing compliance.

“With our rapid growth and expansion, we needed deep category knowledge across all spend areas as well as the assurance of compliance with all buying processes in order to realize true savings,” said Rich Ullrich, Vice President Indirect Procurement, L’Oréal USA. “IBM was unparalleled in its ability to deliver cutting-edge data analytics, the best cloud commerce solution and the strategic sourcing and technology services needed to make it happen.”

L'Oréal USA, headquartered in New York, is a wholly-owned subsidiary of L'Oréal SA, the world’s leading beauty company. Over the years, L’Oréal USA has rapidly grown through both acquisitions, and its existing brands. With the new market advancement, the company's ecosystem of suppliers and vendors has grown exponentially. In order to continue to realize more savings from procurement, L’Oréal USA needed its procurement workforce compliant with its spending processes to attain the best buying advantage.

Powerful Combination of Services, Research, and Cloud Analytics

IBM’s work with L’Oréal USA represents a unique combination of IBM research, services and software. L’Oréal is the first client to purchase IBM global procurement business process and technology services that include a new compliance analytics tool from IBM Research, integrated with strong spending analytics capabilities from the IBM SmartCloud procurement management software.

The IBM procurement management solution will provide spend analytics and program governance in support of all procurement sourcing activities. The IBM Research tool is designed to detect unusual buying problem areas across millions of buying transactions and optimize compliance by evaluating the impact of possible corrective actions to improve spend compliance. This tool will be integrated with IBM software for Smarter Commerce spend analytics, that together forecast data on buyers’ compliance with procurement processes and ultimately help drive increased savings.

“As one of the leading names in the beauty segment of the consumer products goods market, L’Oréal has long understood that attention to detail drives bottom line improvement,” said Lori Steele, General Manager IBM Global Process Services. “We’re pleased L’Oréal USA is able to combine the best of IBM’s research-rich expertise and cloud-based analytics to gain control over total supplier spending, and thereby transform its procurement function from a corporate cost center to strategic company asset.”