L'Oréal drives performance and sustainability with SAP on Azure by extending the successful migration of its SAP business applications to Microsoft Azure across the Americas. This has significantly reduced operating costs in Mexico, Brazil and Argentina, and has allowed L'Oréal teams in the United States and Canada to benefit as well, making it easier to cut costs, support sustainability goals and improve supply chain technology.
SAP has been at the heart of L'Oréal's operations in North and South America for 15 years. Used for essential tasks such as invoicing, reporting, shipping and point of sale, SAP is the company's system of record and its most important application suite. The L'Oréal Americas IT 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 expected to resolve SAP-related performance challenges and build in greater flexibility.
L'Oréal's digital leap
L'Oréal began its SAP cloud journey in the Americas as a proof of concept (POC) for its instance in Mexico. The success of the POC drove the SAP migration in Brazil and Argentina in 2020, followed by Canada and the US in 2022.
L'Oréal's SAP environment on Azure includes SAP ERP and SAP S/4HANA for data management and reporting. It uses Azure Virtual Machines for its workloads, Azure ExpressRoute for secure connectivity and Azure NetApp Files to optimize database performance.
L'Oréal credits part of its migration success to its close collaboration with Microsoft, which provided guidance and ongoing 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 would not have been as successful without the added value of the partnership with Microsoft."
The impact of migrating to SAP on Azure
Better performance, lower costs and reduced emissions.
Migrating to SAP on Azure significantly improved performance. In the past, reports were incredibly slow, which caused delays and other headaches at month end. After the migration, "We were able to speed up long transactions by 10 to 25 times with SAP on Azure", says Greenberg. "Something that used to take 3 hours now takes 5 or 10 minutes."
Thanks to fast transactions and flexible cloud resources, L'Oréal adapts quickly to internal and market changes. It can scale up capacity at key moments, such as peak demand seasons, and scale back down afterward, avoiding oversized, idle systems.
The migration helped the company lower its costs. By shifting from CAPEX to OPEX with SAP on Azure, L'Oréal has achieved at least 19% in savings, and it is getting more value from its investment with the greater flexibility it now has. "L'Oréal is absolutely committed to carbon neutrality, and we are making major investments across the company to have the greenest possible infrastructure", says Greenberg. "Our move to Azure means we can take advantage of the investments Microsoft is making."
L'Oréal's adoption of cloud tools is also helping its partners reduce emissions. With Azure, it can support more efficient logistics solutions that were not previously viable on premises. This improves supply chain management, making sure products reach the market and customers receive better service.
The beauty of innovation
L'Oréal has positioned itself to accelerate innovation by moving to Azure. Now that its environment runs so well, the company's IT staff spends less time troubleshooting and more time creating and delivering valuable solutions. Business stakeholders are requesting more innovative solutions because they understand how flexible and scalable the new environment can be. L'Oréal has seen a 40% improvement in the SAP user experience since its migration to Azure. And it has noticed enthusiasm among employees across the company about the possibilities the new environment offers. L'Oréal can now better support innovation efforts and move faster than it could before, accomplishing in hours or days what used to take weeks or months. Technology is no longer an inhibitor to the company's innovation; it is the engine.
L'Oréal's vision for the future
L'Oréal plans to keep optimizing its SAP environment on Azure across the Americas and to identify opportunities to integrate SAP with other enterprise technologies. The company is considering the full potential of the Microsoft Cloud and how it can connect SAP data on Azure with Microsoft Teams and Microsoft Power Platform to unlock future innovation opportunities. Greenberg comments: "We had an incredible fourth quarter last year and our systems were stable even though business was heavier than anticipated. I am excited to continue supporting business growth as L'Oréal gains market share, and through the scalability and innovation we get with Azure, we can help enable that success."
When asked what advice she would give to other leaders considering moving their SAP estates to Azure, Greenberg concludes: "It should not be a question of 'Should we do this?' because I think it is imperative to do it. It is only a question of how."
