Living Proof is serious about the science of hair care. Its innovative solutions have revolutionized the prestige hair-care market and resulted in rapid company growth. It’s also serious about running its business with leading-edge technology. That’s why it switched from spreadsheets to SAP Business ByDesign as business bloomed.
Founded in 2004 by world-class biotech scientists and beauty experts, Living Proof has invented and patented many molecules never before used in beauty. These break-through products are sold through multiple channels. High-end retailers such as Sephora, Ulta Beauty, and Nordstrom carry its products, as do prestige salons across the country. In addition, it has a loyal following on livingproof.com, where it sells direct to consumers. The company is also expanding distribution internationally into salons and retail spaces.
In its early days Living Proof was running the business like most small companies on the rise. Lots of orders were coming in and the business was being managed with spreadsheets. There wasn’t much time to build the sophisticated business applications it would need to keep things running smoothly in the future.
“We were facing a number of challenges because were essentially a startup. We really didn’t have a lot of infrastructure. We were doing all of our work in spreadsheets, and that was okay because we only had one or two products and only one or two channels that we were selling into. But we realized very quickly that was not sustainable,” said Terry Rice, director of finance at Living Proof.
Living Proof needed a software solution that was strong in supply chain management and manufacturing that would allow it to scale business quickly. It also wanted a cloud-based solution because it didn’t want to have to create an IT department.
A cloud solution
The company looked at a number of solutions and selected the SAP Business ByDesign solution, a cloud-based business management suite. Designed for upper medium-sized business, SAP Business ByDesign actually had more functionality than Living Proof needed at the time, but the company knew it would grow into the solution.
“When we found SAP Business ByDesign we knew we had the right answer,” said Rice. “As we expanded our revenue, distribution channels, and manufacturing capacities we really didn’t have to increase headcount because we had the structure, the framework, in place.”
Living Proof can run its entire company on SAP Business ByDesign. Everything, including finance, human resources, supply chain, and production, is integrated. Real-time analytics and reporting are powered by the SAP HANA platform and are available on almost any mobile device. “One of the great things about SAP Business ByDesign is that the information that is available is all standardized, and you know where to go quickly to get what you need,” said Rice.
For example, if someone in sales wants to know what sales program spending has been in the last month or year, the information can be provided in a few clicks. If the R&D team asks how development is going on a new product line, Rice can quickly bring up the data in project accounting and show exactly where the spend is happening.
Revenue jumps 300%
As the business has grown, SAP Business ByDesign has helped to simplify the workload. “It’s much easier to run the business. We don’t wonder what is going to happen when we book a transaction,” said Rice. Production planning is much simpler than when it was done on spreadsheets. When forecasts are entered into the system it figures out when a product needs to be produced and which manufacturing sites and warehouses to use.
And if Living Proof wants to add a new distribution channel or product line to the system, there is a standardized and consistent set of steps to go through. The structure and reliability of the system gives Rice and his team more time to focus on future investments and profitability. They can analyze existing business channels more closely and be more discriminating of the new ones they may enter to ensure maximum profit in the future.
Business ByDesign has been a great investment for Living Proof. Since the implementation, revenue has grown 300%, the number of different items produced has increased by over 200%, and the volume of items produced and distributed is up over 400%. And the company only had to increase its headcount by 30 people to support all that growth. “I really don’t think that we could have achieved that level of success without a system like SAP Business ByDesign,” said Rice.
Watch this interview with Rice to learn more: