l'oreal and leading from the cfo office in the digital era
TRANSCRIPT
FP&A Innovation SummitBoston, MASept 2015
Leading from the CFO Office in the Digital Era
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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
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Disruption Innovation within a Lifetime
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“You can't connect the dots looking forward; you can only connect them looking backwards” SJ
66 years
19031969
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 born1 trillion pages indexed
15 years
Toda
y
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)
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Disruptive Changes in the CFO RoleFrom back-office accountant to front line executive
Levers for CFOs
Social media - On line community channels for interaction & content-sharing
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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
Larg
e &
mo
no
lithic
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Lean
&
ou
tsou
rc e
Fin
ancial
con
trol
Valu
e ad
din
g
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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
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Reduced R&I
cost via crowdsourcing and
listening
Lower cost of operations
New product
usage
Free adverti
sing and
brand buildin
g
CFO Moves Closer to the Customer
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On line community channels dedicated to interaction, content-sharing and collaboration What it is?
SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK
Using social media and mobile technology
NY
XCosmetics
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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
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On line community channels dedicated to interaction, content-sharing and collaboration What it is?
SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK
Using predictive analytics
TESLA
CFO’s Survival Dilemma
Predictive Analytics
Happiness costDirect relationship
Connected sensors Anticipate issues
Customer behaviorNew product featuresBrand protection
Answer?
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Tesla vs. NY Times Case in Point
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On line community channels dedicated to interaction, content-sharing and collaboration What 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
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CFO Driving Profitable Growth
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On line community channels dedicated to interaction, content-sharing and collaboration What it is?
SOCIAL/ MOBILE ANALYTICS CLOUD/ SECURITY RISK
Cloud Computing
Cyb
er
Secu
rity
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
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SOCIAL MEDIA
ANALYTICS MOBILE TECHNOLOGY
L’Oreal Project Made Possible by Digital
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Virtually try on makeup using augmented reality
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• 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
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16m downloads
A step-by-step collaboration between CFO and the business
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Big Data Analytics Illustration
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A driver for decision making and future investment
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Next Steps for CFOs
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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
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Reflection on the CFO Role
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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
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Questions ?
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