Video Transcript

Hello, everyone. David Lane from Rent-A-Center. I'm going to talk a little bit about our history at Rent-A-Center and kind of how we got here specifically a lot of it's around tool selection. But a little over 3 years ago, we started a journey to create a strategic sourcing group bringing in tools and processes along that path. So if you indulge I'll tell you a little bit about who we are and what tools we did. Ultimately I'll give you some of the considerations that we've made or may not have given consideration to in looking at cloud base solutions. I will tell you we do have two cloud based solutions for source of contract and P2P. So a little bit about Rent-A-Center, we're based in Dallas, Texas. A little over 20,000 employees. Effectively we have 20,000 buyers and a little over 4000 locations just north at $3 billion. We operate under a number of brands. We have a new line of business that's in store, inside of the store for besides Ashley's Furniture, Rims 2 Go, those types of location. So we support a number of different locations that from the store supplies and office supplies, etc. So a little bit about our approach in what we did and these talks a little bit about our assessment of coming together with coming up with an approach and so I will tell you we did engage Deloitte back in late 2009 and they did help facilitate some of this. I joined the company in May 2010 at the same time we're just finalizing our tool selection. So this took place a little over 6 month period of time but we did and as this assessment I'll talk to you a little bit about that, show you some more details. Put together a strategy, got alignment at the C Suite level for looking at different tools to help us with delivering value put together some more wise scenarios and ultimately went through a selection process and again I'll spend some more time at the latter part of the presentation of the things we did consider, things I would give you guys suggestions to give thought to if you already haven't and then really I'll talk a little bit about implementation approach.

So a little bit about where we were, again we spend on the indirect side a little more than $600 million or we're spending more than $600 million. Almost 30,000 active suppliers in a given year supporting those locations very little of that was concentrated, very, very long tale. Extremely long tale. And we had a lot of challenges with our procurement. This is similar to the previous presentation. Lack of adoption. A lot of working around the system. So again 20,000 buyers effectively everyone at our store could buy products or buy services. So our challenge was try to make it as easy as possible. So that was the key thing as we looked at our requirements and we didn't have a lot of requirements. We had nothing outsource to contract so we are Greenfield. So somewhat easy to do and looking at evaluating tools whether they are cloud based or hosted. A lot of ... over 1 million non-PO, non-backed invoices a year. So pretty much all over the board as far as it goes and again just tons of risk. We didn't have commercial terms, didn't have any repository of contracts. When we did do an assessment of a contracts we identified at around 60 contracts. So certainly didn't have a lot of control of the spend.

So again a lot of opportunities, lots of low hanging fruit. So from that perspective we did put together kind of a business case as I noted about from the technology perspective. I'd go back, it should be one more. Maybe not. Can you advance it backwards? Hold on, I'll see if we got it here. All right, so we put the business case together. Again there was nothing in place from source and contracting so that was Greenfield. From eProcurement, we certainly knew we didn't like what we had and on the TNE side, we had nothing. We are literally using Excel. So from a technology scope perspective that's how we divided it up and I'm missing part of that slide, so we'll go ... but effectively, what I can tell you is we've broken up into those components, three components looking at TNE separately. That was a quick fix again just implementing we brought and concur for that.

So from our selection process and I'll take and put it all up here so you guys can look at it. I want to talk to the final points. Deloitte helped with this selection process, again very limited requirements. We did have requirements on the P2P side, we did not have requirements effectively on the source of contract but we were looking for an end to end solution. So we went through the research we looked at effectively down selected to 11 suppliers, did the RFP and effectively from that standpoint it was the typical Oracle revisit. We actually did eliminate Emptoris from that selection process. Coupa was never in that selection process. Emptoris went out and got Coupa because they didn't have the P2P side. So we were there the first customer that they had integrated and the unique thing here and it's got its own challenges but we have two web based suppliers that are talking to each other. The other thing is that I'll just note to you here because I know I don't have it in the back, the vendor master. That's going to come back into play because again it's back to integration. Where do you put that? So when you talk about you know you are hosting this in the cloud well some point, somebody's got a piece of that equation whether that's sitting in your ERP or sitting in your procure to pay component.

In any time if you guys have questions I'm going to again try to get through a number of these materials pretty quickly and try to get a little bit back to more of the drivers as far as an assessment. I'm looking at cloud based versus hosted and ultimately if they from our opinion, do they bring more value? So as we went through this, again we're going through a major transformation as a company. From an executive level we made the investment to look at strategic sourcing and bring it in. So we'd went through a couple of wave scenarios with wave one and two having Deloitte that at the same time. We started building a sourcing team as well as going through this selection process. So as you can see in the bottom, we put TNE right away back in Q1 of 2010 and then we implemented source of contract and procure-to-pay. Ultimately we had to have all those talk. There are all three of those are all web based systems so as more and more and integration at that level respectfully. I also put on there again talking about the value and I'll give a lot of the value to my team on the sourcing side. You can see that how many categories we source, the amount of savings that we identified through that process. Double digit really effectively the first couple of years we had some degradation in that first half but obviously a little bit more challenging categories and then this year we've expanded a team utilizing the different tool sets that we've put in place.

So this is what our landscape today and how it all talks. So in the P2P side note that Coupa is the source of contract is Emptoris. We have last since our legacy URP system and then we have a PCAR program and so that all comes back together. We do use Emptoris' IBM solution for the spin analytics and I think that's been a big part of at least from my perspective setting that strategy and helping us deliver the value ultimately. We had to know where to go. So we are trying to focus on the 1820 type of rule as far as what categories we evaluate, what does the methodology look like. So effectively we put together an end to end solution. I'll point out to you guys and it's similar to again the last presentation, we didn't actually have a target on the front end which is why did we want enable? So we have a challenge with the locations having a lot of local suppliers, a lot of services that are not national based or regional. They're very localized. How do we enable that at the same time going through this transformation?

Today what we're looking to target is at 60 to 70% as far as either being contracted or PO based. Today I can tell you we are only about 25% PO based. So we have a long ways to go. There's going to be a large percentage because of our service contracts that were direct import to our URP fuels in example we spent $35 million. We don't put that through Coupa. We don't put that in our Procure-to-pay. It's got its own program set up for that. So as you start taking the spin that's 5% just right off the top.

So the way we're structured just to give you some visibility to that and talk a little bit about our score cards and what our responsibilities include. But the way we structured our organization was setting up a P2P. So we already had an ANP department, we had an expense major department that was handling our travel. We did set up the source of contract and that's the site of the organization that I manage. And so what we put together are the metrics and so we do have monthly report outs and KPIs and then we've been able to enable supplier relationship management. We certainly have contract management. Now we are north of 300 contracts in the last three years and we actually do actually have NDAs, we have over 300 NDAs so that's kind of a so we have about 600 active agreements in our system. So long ways away from the 65 that we couldn't find really when we got started and I will tell you most of those are net new. They're not and we found them. They are just new contracts. So the team has been very diligent over the last three years putting this together and again utilizing the tools that we do have.

So this is the methodology. I'll go through this pretty quick. We adapted the Deloitte's model which is the 6 step versus your ATK 7 step but we go through the same gates and the same type of structure and again we're pushing hard again. This is about keeping our sustainability. We are not about RFPs. RFPs are just a component other process for us very much driving to continuous tracking of that category even after it's sourced. Keeping track of the suppliers. Enabling supplier relationship management, we didn't do that as a whole. It just didn't exist across our department. It's very ad hoc based. If at that but we got governance models in place. We have a great tracking model. It is excel driven but effectively we've been able to deploy this and I will show you if we have time at the end just kind of the results because not only have we taken the cost down. We've been able to sustain it over the last couple of years while we've grown our business fairly significantly. We went from a $2.8 billion company in 2010 to now we're going to be north at 3.3 this year.

So this is a little bit how the tools impacted our business. We kind of took out the numbers in between but I'll let you do the math. Effectively we started with 55 people in the organization back in Q1 of 2010. We're down to 45 ... actually I'll take it back for a couple. We've added two more head count within this sourcing organization. So now the sourcing organization has a total of 11 and we've been taking out ... the big block is our AP department and they went down almost 20 headcount and we're working on some efficiencies there with some other technology to reduce that even further. The expense management has state study our respect but as you can see as we implemented the technology in 2010 is that decline went in and as we toured as our organization.

So this is kind of what we think are some of the contributing factors. The biggest one that I would put up there is we had executive buy in. Our CEO, COO and CFO were very much critical to the process. I will say that and again I'm somewhat selfish in saying it the tools enabled it. They didn't do it. At the end of the day software doesn't solve the problem, it only allows you that process. We are very fortunate. We are Greenfield on the sourcing side so we get adopt to whatever process we wanted. And so when we went through a selection process and some fairness unlike as you get larger and larger enterprise, you run into more constraints. We didn't have very, we had no constraints. We got to optimize and use the tools to their best capability and I'll talk a little bit about this as far as selecting assess based solutions versus a hosted but having IT and security in there was critical. We have PII data. We have a lot of data moving if you recall in that slide. We're moving in on secure FTP sites but we have a lot of PCAR data. We have, we do our social security numbers that have to be I'll think of a word here in a second but not shown.

Again just trying to keep information from being public but really with Deloitte's help on the first one, they helped define the project and we've been executing to it. It has been all internal resources since May of 2010. Rolled it from my side we couldn't get them out quick enough and we've been able to have the ability to continue to grow the business. But really having security and IT and audit being there they are just were enablers to the whole process. They all were about getting contracts in place and making sure that our information was protected. The master data elements again when you go through this we came off the wrong category structure that was another big lesson learned. Early on we developed our own taxonomy that aligned with our stake holders and aligned with the industry and so again that's one of those decisions in doing that. Whether it's a SAS solution or not, to me it was still a key thing of being able to identify your spin.

So again we've categorized all but like 3% of our spin. So each month I've got a report that comes out that tells us where all of our money is going. So we're very fortunate then really the challenges had to go address it but as a whole we've been able to address it and so from that perspective we are very fortunate that we have tools that helped us show that from that standpoint and again the adoption from the field. So similar to the prior presentation, we killed the legacy tool. They had nothing else. If they want that good, go here. The beauty of Coupa and that was probably the and it was a differentiator between selecting over Ariba or Oracle usability. We have high school educated co-workers in the field. They are not going into SAP. It's never going to happen. It won't work. So the UI was just so user friendly for us. So you know again part of the challenge I was with left with only a host RA SAS based solution. So at some level, it narrowed it down and then again in the last point there really just establish your KPIs. The one number I showed you guys earlier, we didn't have a target. I think it would have been beneficial to have it because you'll see it in a minute we have had tremendous success as a company and again the tools have enabled that process. We did do a lot of due diligence in selecting the tools. We didn't go visit anybody's site but we certainly looked at a lot of customer environments. We asked them to pull it up. We wanted to see how they were using it and I think that would be the same whether it's a hosted solution or not.

So I wanted to give some thoughts as it relates to what the topic really is and so as far as selecting cloud and so forth. So we as a company already made the decision. We're going to invest in tools. I would argue there was very little due diligence as it relates to what was that cost going to look like. The one thing I can tell you is we've continued to buy a software in behalf of the business whether it's a SAS or a hosted, internally hosted solution, I'm going to tell you it's OPEX and CAPEX. It's the biggest thing that we see and we see the business continuing to steer towards SAS solution primarily because of financials. They have to go get approval for CAPEX. They don't need to necessarily get approval if they can work it within their budget. So that's it's a piece I think that brings in to play. But the one thing that we do see whether it's sourcing tools for SAS solutions or hosted, the one thing that I will say that we've struggled with is do you really benefit on the headcount side? And what I mean by that is you still have to operate the system. You still need the system admin. I may not need a DBA in the background but that DBA is also managing 25 other servers or 50 servers. So am I really changing the headcount?

So these are things that if you're really looking at the cost attributes, then dig into that deep. Certainly you have to buy the hardware. There's a time to market and that is my next bullet. When we sign the contracts the systems were up that same day that's how they get revwrecked. So there's no secret to it but we have enable it. With the sourcing tools, we signed them on June 30th. The systems were active and ready to use the first week of August and that's after spending a week in Boston doing UAT and training. Very quick has our colours, all of our logos and set up and configure the way we wanted but again we are Greenfield so I got to know that configuration is much easier when you're not trying to work around old processes. But I doubt if we had bought a hosted solution, we would head up and running. Just knowing our IRT staff. It might have took them a little bit longer to procure a server. If it needed a dedicated server and I would doubt that it did getting web addresses. So we have public web addresses that we have to buy and maintain relative to our solutions. But it does, the integration does come to be a critical thing. So if you recall we have a full 360 as far as the data loop and I will say the web solutions it causes another challenge there's no doubt about it. I'm fighting one right now. We got finger pointing. We have and it's their passwords, it's their gateway and it can't be a little bit of a challenge you know certainly I would love to have it inside our firewall and we don't have to worry about sending data. It will take away some security attributes but on the flip side I can tell you on the spin or spin analytics tool what they do on their enrichment process and we have a, it's a business objects interface. We can look at $10 billion. We have all legacy spin back to 2009. You can sort it any which way you want. It's how we set it to dimensions.

On the prior slide I talked about knowing your data. You can't do this if you don't know your data and I will tell you that Deloitte lead part of that process, we have to unwind it and it took us almost a year to unwind it. So again make sure you have the right partners integrating it and also know it. And so we did. We did major change management with multiple SAS solutions in a very short period of time when we stretched our resources probably too thin and at some point we leaned on third parties that ultimately may or may have known our information for such a large transformation.

The one thing that I'll put on here that again one of the challenges with the SAS solution that you don't had to read benefits since it's really hosted. What about the end? What about your data? So we're we did five year contracts for three years in. Two years from now what are we going to do? I've got to think by how well you're going to actually extract that information. I can tell you at least a few years ago the suppliers we're dealing with, they don't have that in the agreements. We didn't contemplate it. So it's another variable, you can get it up and running but think about you got to think about the full life cycle as it relates to it. Something that we definitely give enough consideration or thought to and I put it in here, we as a company are certainly from a procurement standpoint, we're buying anywhere from 5 to 10 new applications a year on behalf of HR, Marketing, IT, name your department, do we actually have a strategy? And so it goes beyond just our procurement tools and resources and this is something we're trying to figure out how to develop but they're certainly back to the TCO model. Is its an enterprise base system. How many users? Single sign on is a challenge for us.

We have a very legacy LDAP system. Samuel is very common, we don't have. It integrates very quickly with SAS solutions. It doesn't with RLDAP, its custom code had to be written. Nothing preferred methodology. You have to do that if you have a SAS solution. So again some of the trade offs but ultimately I will say this, the suppliers we selected, they've bend over backwards to help get them integrated. We had Coupa up and running in October. We did three phases because our business doesn't believe in Big Bang anymore. We don't push out in one application to 20,000 people in NME business. It could get distract our operations. We did it in three different phases. One each week. No issues, the training was so simple. Just a couple minute videos that we created ourselves and we've put it through our LMS system to deliver it to our users but that was kind of a bigger challenge to us because we're touching 20,000 people and we trained them all in three weeks. And we did it all remotely. We never travelled. We didn't do any of that and I don't think it was ever needed respectfully. But those are some of the thoughts as it at least relates to things would probably should have been given consideration to. Again this was such a fast moving process in light of we had no sourcing people and we really did made some major changes in the procurement side. I do want to show you, I just grabbed these. Sorry for the formatting but I did want to kind of give you what we've seen as far as results.

So in the indirect spin we are responsible for at one point it peaked almost at $650 million. Again we've grown our business. We went from 3000 locations up to 4000. We've added a couple of thousand employees during this process. We hire about 11,000 people a year but it takes a while to see the savings be realized, right. We saw that yesterday. It's not just identifying the savings, it's actually seeing it. Oh, this is proof in the pudding. We got to actually see it come down. We kind of level off. I'm very keen about keeping that pipeline full. I keep identifying additional value to deliver to the business. My CFO cares about this. That's why he want to hit the bottom line and we've seen it hit the bottom line. So our little team of now 11 has to understand a fantastic drop. It's to me the tools have enabled the people who have done it.

Our DPO, we took a focus to that. Back in the beginning of 2011 once we did have Coupa in place. Coupa was just a piece of it because again a lot of our spin is going outside, outside of Coupa directly into our laws and our ERP but we have seen just dramatic improvement there. I don't have the number at the top of my head but its worth in the neighbourhood of about $40 or $50 million of cash flows as it relates to improving our DPO and it's really just paying the terms. So same issue. We had locations sending in invoices late, past due, we paid late fees but we had no way to quantify it. The baseline was not really quantifiable. We used spin radar that didn't work so well. That was what Deloitte used. It was pretty easy to adapt. The spin management tool within Emptoris. All right. So I spoke a lot, I didn't allow to you time to talk, I'll ask questions, is there any questions? I'll go back and slide this one.

Q: Mr. David, a couple of questions and this maybe for hiring to. First of all, did you, for you specifically, did Deloitte have any impact on you getting up and running that quickly? I mean can you attribute in to the fact that you brought in a third party to help you get there or was that truly just the way that you structured it and we're able to set up the system that quickly?

David Lane: I would say Deloitte had little impact with the system. So they'd certainly did partake in it. We used Emptoris, we use Coupa. They were pretty integral. It was their first time integrating so they both actually talked for the first time. Deloitte really didn't play part of that. Like I said as it specifically talks to the spin data it was a nightmare. I mean we literally dealt with it until this year. It was a two year problem unwinding what was done and I don't want to pick on Deloitte but it was problem for us but they set the foundation for sourcing. They proved sourcing's value. Certainly most of the people probably in this room all know sourcing's value. They proved it with a mass doing 20 categories in five months is just, it's surreal. But they left us with contracts. They got deal and execute and implement. So I don't know if I would wish it on any of you all but certainly from a change of management and education they did a great job.

Q: Can you talk a little bit and this is probably the hiring to little bit about the actual experience of the people interacting with the system and you know, there's probably hesitancy at the beginning but was there ease of use impacted?

David Lane: So I'll take, first part I'll talk about sourcing because it's closer to home for me. We actually tried to eliminate anybody touching it. We wanted to be in the background. My small team of at the time, three people. We ran it. We engaged it. We did this. We actually tried to make it as simply as possible scoring RFPs and going through that processes as possible. Go further downstream. The contracting, the tool has every capability that you can ever imagine. It's a Cadillac by all means and we were very fortunate to have some really good people from Emptoris help set it up and we were very much trying to crawl, walk, run. The tool enables you to do red lines in the process, in the tool. I don't suggest that unless you're material. We didn't have contracts. We didn't have paper. You're not going to do redlining in the tool. So again just being realistic, we did do the electronics signature. We have a delegation of authority challenge if you will. All of our stakeholders sign contracts at a VP level and above. We thought it would be really great to have them, I thought it would be great, I'll admit it to have them sign it up through and now I have like you know this chain of approval. We added steps to the process, it was not well received. They got into the tool and Emptoris' even noted it wasn't easy for them to figure out what put them to push the hit, by the way they've already signed the contract. So again you know having come from like EDS where it's global and you need approvals from ME and AP. We don't need that. We're all on North America. So again it's partially our environment, it's partially our legacy of our culture but we actually try to keep people out as it relates to Coupa, we needed everybody to use it. It's not used in our corporate office very much just because there's not that many purchases, our purchases are in the field but the adoption I mean it was just welcomed as possible.

Q: And I guess the one thing that some of these SAS providers discuss and kind of advocate is the fact that your dependency for changes to the system and system support reside within your organization instead of IT, do you see any benefit for that? I mean you mentioned that you touched on it a little bit about the database but really how simple is system administrative of this SAS based versus you know somebody that might already have one where you have to go for IT for any changes?

David Lane: So on the sourcing side, we've done one upgrade. There was no impact to us. So there would have been a requirement on IT with us doing some UAT respectfully. We didn't even do UAT so that was, they did it for us. So that was so they consider if you're building your contracts, make sure you put who's going to do the UAT certainly you might want to actually go and validate it yourself. So that's a benefit. I will tell you and it's a note I actually made my own copy here. We haven't had this retail. We have a lot of old, old hardware, ten year old teen clients. Guess what? We haven't had the issue with Coupa but we've had it with other suppliers. We had it with Taleo. You can't run their application on it. Internet Explorer compatibility. We only go up to eight in our company. We're very behind the times and but I don't ... I actually I can tell you in the retail world, we're not. We're right with everybody else. You lose some of that flexibility, I'm not upgrading. I would prefer not upgrading at times. Right now I can tell you they got some really neat features and the new Emptoris IBM version. We're not going to take advantage of them, why would I even bother? Now but that's the challenge with the hosted solution, right? You got to go through that process. It's going to take some resources. We don't have to worry about that. Coupa does the upgrades whether we want them to or not. So that's something to give consideration to some SAS suppliers you have some control over that. We do have that control with a lot of other SAS suppliers that we utilize. So it's something that you give consideration to but compatibility to your legacy hardware and explorer browsers, it's a big deal.

Q: ... implementation process comparing to SAS supplier versus the cloud solution.

David Lane: So I can't speak to it on the sourcing tools. All companies I've had we've already had them and again when we brought them in here, I can tell you we buy a software all the time. A lot of it goes back to do you have a project management group? How disciplined are they in change management? I will tell you as a general rule and we're trying to again I told you we're going to try to build it out as far as a process but if it's an enterprise application, then you got users logging in and you're going to use this from more than a few years. I would definitely give a lot of consideration to internally host it but it goes back to what's your appetite for upgrades and so forth. I don't see us needing upgrades often but you know Coupa is coming out with the latest and greatest all the time. So but they're catching up too. The good news about software today, it's very configurable, you go back a decade or 15 years ago is very customized. Software is changed from my point of view. So that's changing a little bit of that and so they can ... I think they can make those improvements but Coupa is maturing they're not where Ariba is it or Oracle. They don't have some of that functionality. Today they've made tremendous progress in just the three years that we've been with them. But there's resources to the question and to your question. There's resources that takes the major but from the system admin, we still have to do all the same work about adding users and changing permissions and it's the DBA side that you would get to benefit and I would argue that there's not that much effort. They're going to tell you there's a lot. Our director of IT for infrastructure does not want to host anymore solutions because he actually gets a call if it goes down. He doesn't want the SAS solution. He picks up the phone and says "call IBM." Selfish I think, maybe, I don't know.

Q: Yeah. I'm kind of in a similar place as far as implementing a new system and replacing an old P2P system. I think you said you cut yours off and went live with the new and just like you did. So any lessons learned about that transition from the old P2P and going to the new one? I mean the timing, is it midnight? You know you just throw out the old one, put in the new one. Is it?

David Lane: We did it on midnight on Saturday. Most of our locations are closed on Sunday. So that was a little bit of a benefit for us but we did it so it came out on Monday. We changed the URL location. They didn't get to see the old one anymore. We literally cut it off and when they went to go to so we did it all through our internet. They clicked on it, we called at the same thing. It's starting to be a procurement system but now they get a different screen. We did, I would say this was and Deloitte came up with this idea and it was great. We did prices for the district or the region that got all their training done first where we got a 100%. That was brilliant.

Q: The what?

David Lane: We gave them prizes for getting their training done. So we're in the business we rent you know TV's and washers and dryers, we just gave out TV's. That was easy which was with our suppliers they gave us some TV's and it was a brilliant idea as far as getting training. The training I think was we heard that we over did it. We gave them I think about seven minutes of total training in two different modules, they said that was too much.

Q: Wow! So how far in advance did you do that? And what did you do with your live PO's that were on the old system?

David Lane: So with that follow-through and so on and when that end, great question. They had to be approved in the system. And so there was, there is that period of time where a few days where we'd actually go in and let different levels of leadership make their approvals as necessary but so we didn't kill them and there was that cycle through and we did not transfer them over and so we just did a cut over at that point. Any new PO's are over here. They didn't have access to it and then we just approved them automatically. It was a risk that we took.

Q: Yeah.

David Lane: That you know.

Q: So how long did you have to leave the old one up to get all the approvals done and get them paid. So did you do the matching in the old system?

David Lane: It was less. We did.

Q: When you.

David Lane: So again we at the corporate side had full visibility. The field loss visibility, so we eliminated their acceptance but we took that as a risk that we are willing to take in light of them having to deal with it. It's a great question. So we did take that risk on that we were going to accept them in the system irrespective once it was approved. So there was a chance that you know Staples didn't deliver the box of paper. We took that risk because weren't just going to accept that PO after several days.

Q: Okay. But you did still match invoices?

David Lane: We did. Yes.

Q: With the old PO?

David Lane: Yes, we did. So we still went through the three way match but we just did not allow them access to the system to accept the PO. That makes sense?

Q: Okay, yeah.

David Lane: So we forced the acceptance at a corporate level and again it was a calculated risk. I mean we don't have a real issue with that as a company. We weren't doing them any PO's either.

Q: Yeah.

David Lane: We were doing very little PO's. It was truly only our office and store supplies. And so what we've been trying to do is build that catalog since then.

Q: Okay.

David Lane: That's a good question as far as transition.

Host: We can do one more question.

Q: Hey, David. On the spin cube that you guys had built, was it as far as the taxonomy that was used, was that leverage from third party perspective or did you guys kind of build your own or a little combination of both?

David Lane: We build our own.

Q: Okay.

David Lane: It was ground up. Just again, just prior knowledge. I was very fortunate you know I had a team member that was from ex-IBM-Eli Lily blockbuster. So I had brought in some people that had some working knowledge of categories and we just built it out. I would say that that's the one thing I'm glad we invested in and it was a smart decision. The vendor master was another critical decision that we had to make. Where are you going to host it because you can have that in Coupa you can have it in Emptoris, you could have it our ARP and that's ultimately where we let it reside but the taxonomy that were big decisions to make but we've refiner. We have actually 160 categories at resource. So that was kind of a key to us, just trying to figure out what does that life cycle look like? What is that source of frequency? What to spend? And so forth. So that to me was a big deal to avail to ultimately when the data comes back when we see the category spin, what's it look like?

Q: David, one more quick question. The SAS providers that were professed that they integrate to Oracle and SAP better than SAP and Oracle. Did you find that to be the case?

David Lane: So we didn't have Oracle or SAP. We have Lawson. But we did challenge them on their routines. I believe they were actually there. I would challenge you and because we buy other software whether it's in the Oracle house for our inventory management, I think the integrations with the API's, the way they're structured today, it is not that easy. I really do. I think it's you're will build a few more hours into the process I think it's manageable. I think they do have it. Again it goes back to how do you set up your data? And again I'm going to tell you it's much more on your side of the house of how you structure your data sets than anything. You got to decode that for them. It's a good question. I will tell you we took a big gamble putting Emptoris and Coupa together and they talk you know we actually that the contract data sits down to Coupa, theoretically should build a catalog if you were to do the line items. We haven't done that. I mean our sourcing process has been not as much price driven as it had been demand and spec driven. That's where our values come from. Again the tools, they help us gather a lot of marketing information from an RFP perspective. But I give the kudos to the team of being thinking outside the box. That's where we're getting our guide. The tools are enabling it. We're fortunate that we have the company invested in it to do it. We didn't have to fight for it you know it's been really a great you know organization from that standpoint to work for.