Rent-a-Center Partners with ICG Commerce on Comprehensive Procurement Business Process Outsourcing Initiative
Nation's Largest Rent-to-Own Operator Looks to Procurement Outsourcing as Key Vehicle for Combating Rising Operating Costs and Achieving Performance Improvement Goals
PHILADELPHIA - Tuesday, September 20, 2005 - ICG Commerce, a leading procurement services provider, today
announced a multi-year engagement to provide procurement business process outsourcing services (BPO) to
Rent-A-Center Inc. (Nasdaq: RCII), the nation's largest rent-to-own operator.
ICG Commerce will provide Rent-A-Center with a complete suite of procurement services that will enable the
company to reduce costs, improve processes and maintain consistent and efficient operational practices. Rent-A-Center
will leverage ICG Commerce's comprehensive procurement infrastructure including category experts and process
specialists, a best practice-driven Buying Center, and flexible tools and technology to manage a broad spectrum of
processes including strategic sourcing , savings implementation, transaction processing , and ongoing
category management across a wide array of indirect goods and services.
"After considerable research into different operational areas, procurement outsourcing has been identified as a key
vehicle for enabling the company to obtain sustainable cost reductions and process improvements," stated Robert
Davis, chief financial officer and senior vice president of finance at Rent-A-Center. "The ICG Commerce team
emerged as a natural partner for Rent-A-Center in this initiative due to their understanding of the procurement function,
as well as their demonstrated success with other companies."
Aberdeen Group's July 2005 "Procurement Outsourcing Handbook" reveals that leading companies are incorporating
outsourcing as a method to augment and accelerate their procurement transformation, not in lieu of creating a world-
class capability. Tim Minahan, vice president at Aberdeen and author of the report, states, "Firms are outsourcing
(procurement) to leverage economies of scale and improve execution and control of underperforming or non-core tasks
and poorly managed spend categories, while focusing internal resources on high-value activities such as the strategic
sourcing of direct materials."
The primary benefit of BPO in most other functional areas such as customer service, human resources and finance &
accounting is cost savings through labor reductions, which has traditionally been accomplished through offshoring. The
procurement outsourcing value proposition, however, is much more impactful and rooted in acquiring better
capabilities to materially and continuously lower the costs of goods and services purchased externally to run the
business. These costs can represent up to 80 percent of a company's revenue and thus just a five to 10 percent cost
reduction can have a material earnings impact. Leading companies like Rent-A-Center view procurement outsourcing
as a vehicle to quickly achieve and sustain these savings across a much broader scope of expenditures.
ICG Commerce will work closely with representatives in the finance, procurement, store operations, IT, and service
center areas. The engagement will initially focus on strategic sourcing and supplier enablement activities, along with
the implementation of a transaction platform to drive savings. ICG Commerce's Philadelphia-based Buying Center will
be leveraged for miscellaneous purchasing and spot buys beginning in the second phase of the implementation.
Ongoing management of specific buying categories will be initiated then for continuous improvement on the savings
opportunities identified over the life of the partnership.
"Rent-A-Center's commitment to procurement outsourcing at a very senior level is a testament to the growing
recognition of this functional area's ability to impact the bottom line," said Edward H. West, chairman and CEO of
ICG Commerce. "ICG Commerce is honored to collaborate alongside industry leaders such as Rent-A-Center."
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About Rent-A-Center
Rent-A-Center Inc. (Nasdaq:RCII), headquartered in Plano, Texas, currently operates more than 2,800 company-owned
stores in the United States, Puerto Rico and Canada. The stores generally offer high quality, durable goods such as
home electronics, appliances, computers, furniture and accessories to consumers under flexible rental purchase
agreements that generally allow the customer to obtain ownership of the merchandise at the conclusion of an agreed
upon rental period. The Company also owns ColorTyme, Inc., a wholly owned subsidiary and national franchisor of
291 rent-to-own stores. For more information about Rent-A-Center, visit www.rentacenter.com.
About ICG Commerce, Inc.
ICG Commerce (www.icgcommerce.com) is a leading Procurement Services Provider
exclusively focused on helping companies buy more effectively and efficiently in order to reduce
costs significantly and continuously. The company offers an unmatched combination of process
and category expertise, market insights and benchmarks and a world-class operational Buying
Center to deliver Sourcing and Procurement Outsourcing Services. ICG Commerce Inc., a
privately held company founded in 1992, is a member of Internet Capital Group's (Nasdaq:
ICGE) network of partner companies. For four consecutive years, ICG Commerce has been as a
Forbes Best of the Web: B2B honoree, and the company also has had multiple executives
recognized in Supply & Demand Chain Executive magazine's annual "Pros to Know" listing.
Contacts:
Kristen Knouft
ICG Commerce
484-690-5000
kknouft@icgcommerce.com
Melissa Boehning
Ruder Finn
312-329-3975
boehningm@ruderfinn.com
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