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L'Oreal and Leading from the CFO Office in the Digital Era
- 1. FP&A Innovation Summit Boston, MA Sept 2015 Leading from the CFO Office in the Digital Era
- 2. 2 Agenda •Disruption innovation within our lifetime •Disruptive changes in the CFO role •New opportunities enabled by digital •Digital technology impact at L’Oreal •Next steps 2/3/16
- 3. 3 Disruption Innovation within a Lifetime 2/3/16 “You can't connect the dots looking forward; you can only connect them looking backwards” SJ 66 years 1903 1969 1946 Today 1973 Today 1993 2008 50 years 30 years First Flight Moon Landing First Computer (27 ton) First Mobile Phone Palm size (2 lbs) 7.2 billion worldwide Internet born 1 trillion pages indexed 15 years Today Explosion of data, analytics, digital connectivity and cyber attacks • The number of pages indexed by Google is 30 trillion (2014) • Data universe is doubling every two years • Storage devices go from $5k for 10MB in 1980s to <$100 for 1 TB (10,000 bigger!) • Cyber attacks flourished to 300 million a year (with a global cost ~$400 billion)
- 4. 42/3/16 Disruptive Changes in the CFO Role From back-office accountant to front line executive Levers for CFOs Social media - On line community channels for interaction & content-sharing 1 2 5 4 CFO Role (1980 – 2000s) 2010 - 2020 30% more revenue via social 50% retail traffic via mobile 6% productivity gains from data decisions Cloud is CAPEX free 4X better DR via cloud Large& monolithic 2/3/162/3/16 2/3/16 2/3/16 2/3/16 2/3/16 Lean& outsource Financial control Value adding 3 Mobile technology - On line services available to users on-the-go Big data analytics - Large/ complex data sets that cannot be processed by traditional data processing applications Cloud – Resource sharing to optimize performance (pay- per-use model) Cyber security - Information and system protection from cyber attacks
- 5. 5 Reduced R&I cost via crowdso urcing and listening Lower cost of operat ions New prod uct usag e Free adverti sing and brand buildin g CFO Moves Closer to the Customer 2/3/16 On line community channels dedicated to interaction, content-sharing and collaborationWhat it is? SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK Using social media and mobile technology N Y X Cosmetics
- 6. 6 One product model only High price (+$100k) No charging infrastructure No dealership network Significant purchase risk Faster growth than market Highest customer loyalty Best rated car Sensor Customer Analytics CFO Managing Running the Business 2/3/16 On line community channels dedicated to interaction, content-sharing and collaborationWhat it is? SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK Using predictive analytics TESLA CFO’s Survival Dilemma Predictive Analytics Happiness cost Direct relationship Connected sensors Anticipate issues Customer behavior New product features Brand protection Answ er?
- 7. 7 Tesla vs. NY Times Case in Point 2/3/16 On line community channels dedicated to interaction, content-sharing and collaborationWhat it is? SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK In God we trust; all others must bring data John Broader “… the car felt short of its projected range and had to be taken back to the Milford charging station on a flatbed truck.” Elon Musk @elonmusk NYTimes article about Tesla range in cold is fake. Vehicle logs tell true story that he didn’t actually charge to max & took a longer detour. The Power of Analytics
- 8. 8 CFO Driving Profitable Growth 2/3/16 On line community channels dedicated to interaction, content-sharing and collaborationWhat it is? SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK Cloud Computing CyberSecurity Shift IT budget from CAPEX to OPEX Increase business agility and M&A integration Lower cost of ownership Improve mobility and collaboration Security, control and compliance The good and bad… Same story, different day… Million dollars in losses Costly lawsuits Quarter losses linger for a while Brand reputation damage Departure of CEO ü û ü ü ü Using cloud computing with strong cyber security
- 9. 9 SOCIAL MEDIA ANALYTICS MOBILE TECHNOLOGY L’Oreal Project Made Possible by Digital 2/3/16 Virtually try on makeup using augmented reality
- 10. 10 • Needs • Trends • Gaps • Competitors Customer • Data • Tools • Processes • Security Technology • Capabilities • Sourcing • Collaborations • Innovation IP People • Scope • Success metrics • Dashboard • Opportunity cost ROI Roadmap to Success 2/3/16 16m downloads A step-by-step collaboration between CFO and the business
- 11. 11 Big Data Analytics Illustration 2/3/16 A driver for decision making and future investment
- 12. 12 Next Steps for CFOs 2/3/16 Innovation = disruption; you can either bend to the change or be broken by it Leverage the technology changes to disrupt organizational economics1 2 4 3 Look for innovation outside the company Focus the company on data and analytics Champion data security management
- 13. 13 Reflection on the CFO Role 2/3/16 A silent man in life's affairs, A thinker from a boy, A peasant in his daily cares, A poet in his joy. The Peasant Poet Poem, by John Clare CFO as poet and peasant