Case Study – OpenAI Advisory Services – Estée Lauder Companies – 40% AI Project Cost Cut & IP Protection
Background
The Estée Lauder Companies, a global leader in cosmetics, was piloting generative AI to transform marketing and product innovation. They envisioned GPT-driven solutions to generate product descriptions, personalize customer campaigns, and assist R&D teams by analyzing skincare trends.
To kickstart this initiative, Estée Lauder engaged a prominent AI consulting partner to develop a tailored GPT-powered platform for internal use.
The project promised cutting-edge capabilities, but it also came with a complex services contract and Statement of Work (SOW) governing this GenAI engagement.
Challenges
Estée Lauder’s procurement and legal teams grew concerned as they reviewed the consulting partner’s proposed SOW. The scope was extensive yet vague in some areas, leaving room for scope creep and potential cost overruns. The draft lacked clear milestones or deliverables, making it hard to hold the vendor accountable.
Clauses around intellectual property suggested the firm could retain rights to certain AI techniques or reuse components of the solution for other clients – a direct threat to Estée Lauder’s proprietary content and data.
Liability terms were also one-sided: if the AI outputs failed or costs increased due to changes, Estée Lauder would bear almost all the risk. Lacking in-house experience with GenAI contracts, the company recognized the need for expert assistance to protect its interests before signing this high-stakes agreement.
How Redress Compliance Helped
Redress Compliance was brought in to perform an OpenAI Consulting Engagement Review & Redlining for Estée Lauder. The Redress team of former enterprise negotiators dissected the SOW and contract, identifying every area of ambiguity and risk.
They worked closely with Estée Lauder’s stakeholders to redefine the project’s scope and financials. Ambiguous tasks were converted into concrete milestones with specific deliverables and deadlines, ensuring the vendor’s accountability and preventing scope creep.
In parallel, Redress negotiated strong IP and data protections: the revised contract specified that all models, code, and content from the project would belong to Estée Lauder, with the consulting partner barred from reusing any of the company’s data or deliverables. Strict confidentiality and data handling clauses were also added.
To address cost concerns, Redress trimmed unnecessary services and excessive hours that had been bundled in. Using industry benchmarks and a keen eye for value, they eliminated bloated fees, ultimately cutting the project cost by 40%.
Finally, Redress adjusted risk allocation – adding penalties for delays, capping liability, and securing warranties for the quality of work. Armed with these redlines, Estée Lauder pushed back on the SOW. The consulting partner ultimately agreed to the revamped terms.
Outcome and Impact
Estée Lauder proceeded with its AI initiative under a contract that favored the company’s interests and protected its assets.
Thanks to Redress Compliance, the final SOW was crystal-clear and enforceable, which kept the project on schedule and within budget.
By eliminating vague commitments and overpriced extras, Estée Lauder saved approximately 40% of the originally projected project cost, amounting to several hundred thousand dollars.
More importantly, the company secured full intellectual property rights to the AI solution. All brand-specific data and AI models remained exclusively under Estée Lauder’s control, preserving its competitive edge and preventing vendor lock-in.
With a solid contract foundation, the AI marketing and R&D platform was delivered successfully, providing innovative tools that boosted team productivity across departments.
The engagement concluded with no disputes or overruns, demonstrating that a proactive GenAI licensing review and effective negotiation can transform a high-risk consulting venture into a low-risk, high-value success.
Client Testimonial
“Our AI project could have easily run away from us cost-wise or, worse, compromised our brand IP,” said the Chief Information Officer at Estée Lauder. “Redress Compliance turned the contract into a blueprint for success.
They locked down our rights, cut out bloated costs, and held our vendor to clear, accountable deliverables. We ended up with a great AI solution and complete peace of mind – without overspending. Redress’s strategic guidance made all the difference.”
Call-to-Action
Navigating a complex AI consulting agreement or SOW? Redress Compliance provides the contract expertise to safeguard your interests. Before you sign on an AI project, let our team perform a thorough OpenAI SOW review and negotiation on your behalf. Contact Redress Compliance to ensure your GenAI engagements drive innovation on your terms – with minimized risk and maximum value.
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