Rent-A-Center Saves Millions through Cloud Procurement InnovationMarch 26, 2013 No Comments
SOMERS, N.Y. and SAN MATEO, Calif. – March 22, 2013 – IBM (NYSE: IBM) and Coupa Software today announced that Rent-A-Center, Inc. (NASDAQ: RCII), the nation’s largest rent-to-own operator, has achieved millions in savings by optimizing and centralizing its purchasing process in the cloud.
With approximately 4,000 locations and 20,000 employees, Rent-A-Center was challenged with a highly de-centralized and manual purchasing process with low employee adoption. In addition, the onboarding of suppliers was extremely time-consuming and complicated. As a result, the company was not efficient at consolidating purchasing to influence pricing or optimizing its contract, invoicing and supplier management processes.
Tasked with revamping the entire procurement process for greater efficiency and savings, Rent-A-Center relied on the combined power of procurement solutions offered by IBM Smarter Commerce and Coupa to streamline its spending.
As a result, between 2010 and 2012, the $3 billion rent-to-own retailer increased visibility into spending by automating how it sources – or finds and secures materials – for 90 categories of indirect spending (items not related to production). From 2011 to 2012, the company consolidated its supply base, reducing it by 10 percent, and decreasing the number of invoices by 5 percent. Rent-A-Center is currently saving, on average, 10 percent on the categories it has automated.
Mike Wilding, senior vice president of accounting, global controller and CPO for Rent-A-Center, commented on the company’s success in transforming its procurement processes, “The IBM and Coupa integration has been fundamental in driving our positive results as we revamped our procurement efforts. A major part of our transformation focused on increasing productivity by automating manual processes like invoicing and contracts. We are very pleased with our savings to date, and we are on track to achieve our savings targets over the next few years.”
Using IBM Emptoris capabilities delivered via a software-as-a-service (SaaS) model, Rent-A-Center has quickly reduced sourcing costs and cycle times and increased accounts payable productivity. By subscribing to a SaaS model, the company was able to accelerate its cost savings and return on investment, and easily increase capacity for large sourcing events and peaks in activity.
The IBM Emptoris procurement suite is part of IBM’s Smarter Commerce initiative, which is designed to help companies manage their supply and demand processes through intelligent automation. The solutions, which can be deployed either on premise or via SaaS or Cloud delivery, are components of IBM’s growing SmartCloud portfolio of more than 70 SaaS and Business Process-as-a-Service (BPaaS) solutions.
Through Coupa’s intuitive application, Rent-A-Center immediately captures spending without having to install software at each of its thousands of locations. The consumer-like online experience helps ensure broad adoption by letting employees easily enter spending into the system. This provides management with clearer visibility and control over spending across all its locations.
“IBM and Coupa have helped Rent-A-Center streamline and control supplier management and reporting in one central solution,” said Pat Quirk, vice president, IBM procurement solutions. “Rent-A-Center is an example of how SaaS can speed delivery of services and eliminate technical complexity found with other solutions.”
“Our No. 1 focus is customer success,” said Rob Bernshteyn, CEO of Coupa. “The results that Rent-A-Center achieved are concrete examples of what can be done when there is a common vision between our customers, our partners and ourselves. Rent-A-Center reached all the goals we collectively hoped for – better visibility into indirect spend, substantial cost savings and increased business efficiencies. We look forward to seeing more customers unlock the value of spend optimization with IBM and Coupa.”
Rent-A-Center is expanding into other countries and has opened 90 new stores in Mexico between 2010 and 2012. The company uses Coupa and IBM’s procurement software for local supplier sourcing and procurement in Mexico as well, which helps minimize costs.
About Rent-A-Center, Inc.
Rent-A-Center, Inc., headquartered in Plano, Texas, is the largest rent-to-own operator in North America, focused on improving the quality of life for its customers by providing them the opportunity to obtain ownership of high-quality, durable goods such as consumer electronics, appliances, computers, furniture and accessories, under flexible rental purchase agreements with no long-term obligation. The Company owns and operates approximately 3,098 stores in the United States, Canada, Mexico and Puerto Rico, and approximately 966 RAC Acceptance kiosk locations in the United States and Puerto Rico. ColorTyme, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 224 rent-to-own stores operating under the trade name of “ColorTyme.” For additional information about the Company, please visit www.rentacenter.com.
More information on IBM can be found at:
IBM Smarter Commerce www.ibm.com/smartercommerce
IBM SmartCloud Solutions www.ibm.com/SaaS
IBM Procurement solutions http://www-142.ibm.com/software/products/us/en/category/SW111