Japanese cosmetics giant Shiseido has embarked on a journey to becoming a “leading data-driven organization” by deploying a single instance solution on the SAP platform to drive global standardization.
While the COVID-19 pandemic has had a noticeable and well-publicized impact on sectors such as healthcare and education, it is also advancing the transformation of less visible markets including the beauty industry. In the Asia-Pacific region particularly, the beauty and personal care products market was worth USD 163.92 million in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 6.38{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22} over the next five years (2021 – 2026).
Some of the major key players in the market in APAC are Shiseido Company Ltd., Avon Products, Inc., L’Oreal Group, Procter & Gamble, and The Estée Lauder Companies Inc. Shiseido is one of the most active companies in the region, with a diverse range of brand offerings and cosmetic products.
Founded in 1872 in Ginza, Tokyo, Shiseido was once a family business that started as Japan’s first Western-style pharmaceuticals firm. It then turned into a premium beauty innovation company that currently operates across 120 territories around the world. Currently, it has more than 40 global brands spanning Elixir, Laura Mercier, bareMinerals, Ipsa, and several others.
During the recently concluded Mastering SAP OnAir online conference, Francois Keet, Vice President, Head of Global Business Transformation at Shiseido Company Ltd., has highlighted the company’s strategy towards raising overall business performance and profitability to globally competitive levels. Keet was joined by Alex Andrenacci, Partner at EY, in the Perspectives session titled “Developing a Data-Driven Organization to Leapfrog the Competition.”
Keet shared that the company has made a commitment to its investors that it will increase its operating profit from 10{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22} to 15{aa282f308afcc222aaa21b0478c79e01a8fedd01972e2180867097bd93930f22}, based on the 2019 results before COVID-19. Recognizing the lack of optimized processes in the company, Keet further detailed:
“As a global company today and specifically with the COVID (situation) where you have to transform and you have to really accelerate into the digital era, it was really imminent for us that we need to look at our data, our processes.”
One of the keys to realizing its vision, according to Keet, is the company’s “Think Global” mindset. In 2019, Shiseido established a business-led and sponsored transformation program called FOCUS which stands for “First, One, Connected and Unified Shiseido” to kick start its journey into becoming a data-driven organization. Just like its fellow Japanese companies that have implemented SAP solutions, Shiseido also aims to unlock the true business potential of an intelligent enterprise.
FOCUS: Running a Global Single Instance Solution on the SAP Platform
Expounding on the FOCUS program, Keet went on to say that the company shifted all the global systems from a regional focus to a global focus. He explained:
“So, the whole governance sits with our global team. The global team consists of a global project management office. We have transferred our existing IT people that were working on our systems into the business process leads that we created under this function.”
Moreover, the beauty giant also built a master data organization that takes care of standards, integrity, and ongoing maintenance of data objects.
In addition to working with EY and Accenture on certain projects, Keet said that Shiseido has a “very strong” partnership and even executive sponsorship all the way to the SAP Boardroom. He stated that each partner has a specific role to play in the company’s digital transformation journey which includes strategy and governance.
Shiseido now basically runs its core business processes on SAP as it has the full suite of solutions with the latest technology. To drive standardization and optimization, the Japanese firm deployed the following in a single instance on the SAP platform:
- SAP S/4HANA Enterprise Management
- SAP Integrated Business Planning (IBP)
- SAP Ariba
- SAP Concur
- SAP SuccessFactors
- SAP Analytics Cloud
Keet explained that they wanted to take the best practices and quality of Japan everywhere, reflecting the Japanese phrase “Kaizen” which means “continuous improvement.” Still, he admitted that implementing a single instance solution globally is not easy and that no SAP implementation is perfect. Therefore, one always needs to improve, Keet stressed.
“And the one that makes me very, very excited is the SAP Analytics Cloud because that’s really where we will drive to become a data-driven organization. By empowering each and every manager in our organization to run the business on facts and data,” he added.
Furthermore, one attendee used the “Ask the Speaker” feature of the Mastering SAP OnAir digital event, curious about Shiseido’s approach and the role of IT project versus business specifically relating to business intelligence (BI) and ensuring the availability of data for analytics. Keet answered:
“It is my responsibility to provide standardized data, the data sources, the technology that is, in our case, the SAP Analytics Cloud or other BI solutions. It is the business’ responsibility to take that, to use those tools and develop their own KPIs and their reporting.”
“In terms of processes around the S/4HANA side, we are really driving standardization, we want to be unified,” he further said.
Shiseido’s Collaboration with SAP on Sustainability
Aside from working with the German enterprise software giant on deploying a single instance solution on the SAP platform, Shiseido has other projects underway. Just like SAP, sustainability is also very high on Shiseido’s agenda. Recently, the Japanese cosmetics giant published its second global report on its sustainability progress after laying out its medium-to-long-term targets in 2020.
Among its updates, Shiseido acknowledged that it had begun licensing its environmental technologies through the WIPO GREEN platform, which is operated by the World Intellectual Property Organisation to share sustainability solutions.
“We are working very, very closely with SAP on that (sustainability). Responsible design, responsible procurement that is really, really part of it. In fact, it was one of the key drivers as well to get our data standardized in the organization,” Keet concluded.
