Infotech Lead America: IBM’s cloud offerings enabled Rent-A-Center, a rent-to-own operator, to consolidated its supply base, reducing it by 10 percent, and decreased the number of invoices by 5 percent.
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 spend, such as store office supplies.
IBM says its procurement solutions — IBM Smarter Commerce and Coupa — have streamline its spending. In addition, Rent-A-Center is currently saving, on average, 10 percent on the categories it has automated.
With 4,000 locations and 20,000 employees, Rent-A-Center was challenged with a de-centralized and manual purchasing process with low employee adoption.
In addition, the onboarding of suppliers was time-consuming and complicated. The company was not efficient at consolidating purchasing to influence pricing or optimizing its contract, invoicing and supplier management processes.
Mike Wilding, senior vice president of accounting, global controller and CPO for Rent-A-Center, said: “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.”
Leveraging IBM Emptoris capabilities delivered via a software-as-a-service (SaaS) model, Rent-A-Center has reduced sourcing costs and cycle times and increased accounts payable productivity.
By subscribing to a SaaS model, the company has been able to accelerate its cost savings and return on investment, and easily increase capacity for large sourcing events and peaks in activity.
Through Coupa’s intuitive application, Rent-A-Center 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.
Quirk, VP, IBM procurement solutions, said: “Rent-A-Center is an example of how SaaS can speed delivery of services and eliminate technical complexity found with other solutions.”
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.