IBM Makes Deal “Fashionable” With L’Oréal Deal

NEWS: IBM L’Oréal Deal

It is wiser to find out than to suppose.”

                                                              – Mark Twain (1835-1910), legendary author and humorist.

There was once a time when businesses were done through intelligence guesswork – you guessed what your customers would like and you provided it, you guessed what the demand will be and you procured accordingly, so and so forth. Now, “estimating” may have been the word used instead of “guessing”, but it was still an art, and an imperfect and error-prone one at that, until analytics emerged as a science.

With the use of analytics, businesses could predict the future with a greater degree of accuracy, resulting in lesser wastage, faster turnarounds and improved performance – thereby affecting both the top line and the bottom line. Now, with cloud analytics as offered by IBM, all this is possible at a lower cost than ever before.

This is where L’Oréal, the world’s largest cosmetics and beauty company, has seen value. Always a leader in the beauty industry, L’Oréal now stands as a leader among companies looking to leverage the tremendous power of cloud analytics in everyday operations. It made its intentions known by signing a major three-year agreement with IBM for expert procurement services using an advanced cloud analytics solution that will transform the way L’Oréal USA, the cosmetics giant’s wholly-owned subsidiary, buys from its network of North American suppliers.

With this agreement, L’Oréal will gain access to 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. This will completely revolutionize the entire supply chain management system in the cosmetics industry and may well see L’Oréal’s competitors following suit with similar initiatives. At the end of the day, while the company will benefit from cost efficiencies, L’Oréal’s loyal customers will benefit from new products appearing faster on the shelves.

Explaining the rationale of this agreement, Rich Ullrich, Vice President Indirect Procurement at L’Oréal USA said, “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. 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.”

IBM, understandably, is quite pleased at this high-profile development. Lori Steele, General Manager IBM Global Process Services, commented, “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 “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.”

With this deal, L’Oréal has shown its appreciation of the “beauty” of IBM’s cloud analytics solution; others should soon follow.

By Sourya Biswas

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