Global Procurement Solutions (GPS) Manager of Business Development Final Project, Fall semester December 16, 2000

PAGE- 2 Presentation Agenda Part 1: The Process 4Vision & Mission Statements for GPS……………..…... 4Goals and Strategies of GPS………………………….... 4General Criteria for GPS………………………………. 4Description and Diagram of the New Product Process... Part 2: The Product 4The New Product Concept……………………….….... 4The Specific Criteria for the New Product………….…. 4Business Evaluation of the New Product………….…... 4Next Steps……………………………………………... A GENDA

PAGE- 3 P ART 1 - T HE P ROCESS Vision & Mission of GPS Vision To introduce innovative cost management solutions in order to distinguish American Express card products from that of competitors while committing to the highest level of customer service. Mission Our focus is to continually add value to our customer relationships by enhancing cost management tools for our customers, with the development of value-added services that help them achieve cost reductions. We will work with our strategic business units to maximize customer service and maximize company efficiencies to increase shareholder value

PAGE- 4 Goals & Strategies of GPS 1...Obtain at least a 95% Customer service satisfaction for all products and services  Establish customer service metrics  Track customer service through follow-ups with clients quarterly  Continually improve processes to simplify customer experiences  Select dissatisfied customers and provide retributions or adjustments  Offer customer feedback cards and provide incentives for feedback 2... Achieve an acceptance rate of 25% or better for first year of new product or service launch  Implement a database to track client progress and client enrollment  Provide incentives for the sales force to sell new products and services  Train and educate the sales field and clients about new products and services P ART 1 - T HE P ROCESS

PAGE- 5 Goals & Strategies of GPS 3...Develop a communication plan to coordinate customer service issues across strategic business units  Share organization charts for each strategic business unit  Produce a monthly newsletter to inform SBUs of new product/service developments  Train and educate sales field about new products/services 4... Introduce new products and services that return at least a 18% return on investment  Develop new concepts through brainstorming and fuzzy front end thinking  Evaluate new concepts using a standard template. New concept should return at least a 18% ROI  Test pilot the new product/service and use focus group  Launch new product/service through established communication channels P ART 1 - T HE P ROCESS

PAGE- 6 General Criteria for GPS 4Products need to be Procurement related (cost management solutions) 4Products need to support existing American Express products 4Products need to be derived using core competencies of American Express 4Products need to provide a direct or indirect financial value to the Corporation 4Quality cannot be sacrificed 4At least 100 new concepts will be sought, 10 scoped, 3 should reach the BE stage, and 1 launched P ART 1 - T HE P ROCESS

PAGE- 7 The New Product Process P ART 1 - T HE P ROCESS

PAGE- 8 The New Product Description P ART 1 - T HE P ROCESS Gate 0 Based on the Corporate Goals, Business Unit Goals, and the Goals of GPS a strategic direction will guide the development of ideas and concepts. GPS criteria will also help guide the direction of idea generation

PAGE- 9 The New Product Description P ART 1 - T HE P ROCESS Idea Exchange Bank 4Ideas filter into the bank from four main sources 4Quarterly surveys of customers 4Quarterly cross-functional team meetings between Marketing, Sales, GPS, and Purchasing

PAGE- 10 The New Product Description P ART 1 - T HE P ROCESS Gate 1 Ideas are measured against the Broad Criteria 4Products need to be Procurement related (cost management solutions) 4Products need to support existing American Express products 4Products need to be derived using core competencies of American Express 4Products need to provide a direct or indirect financial value to the Corporation 4Quality cannot be sacrificed 4At least 100 new concepts will be sought, 10 scoped, 3 should reach the BE stage, and 1 launched

PAGE- 11 The New Product Description P ART 1 - T HE P ROCESS Stage 1- Scoping Preliminary Investigation 4Low Cost 4Relatively Quick Ideas may return to the Idea Exchange Bank if the scoping determines that timing is not appropriate or that modifications to the idea may be necessary

PAGE- 12 The New Product Description P ART 1 - T HE P ROCESS Gate 2- Specific Criteria 4Product should be flexible and easy to use for the client 4Cycle time for implementation should be less than 6 months –Product should encourage customer loyalty through high customer satisfaction 4The product should save the client money based on their current situation 4Customers should be able to maximize resources using this Product 4Customers should have someone to turn to for help 4Quality should be very apparent to the customer

PAGE- 13 The New Product Description P ART 1 - T HE P ROCESS Stage 2 More extensive research is conducted to examine the six key elements of the BE 4Corporate Environment 4Product Definition 4Potential Market 4Marketability 4Finance 4Legal

PAGE- 14 The New Product Description P ART 1 - T HE P ROCESS Gate 3 Information from BE is once again measured against Broad (General) Criteria and Specific Criteria Ideas that have potential although do not proceed to the next step will return to the Idea Exchange Bank

PAGE- 15 The New Product Description P ART 1 - T HE P ROCESS Stage 3 4Product Definition to Test Pilot 4Business Development is completed 4Product tested- cross functional team (internally) 4Product tested- Test group 4Modifications are made, if necessary 4Marketing plan and Budget are developed- then tweaked

PAGE- 16 The New Product Description P ART 1 - T HE P ROCESS Gate 4 If the pilot returns at least a 25% acceptance, then the new product/service will continue to the product launch If not, the idea may be sent to the Idea Exchange Bank for investigation at a later point

PAGE- 17 The New Product Description P ART 1 - T HE P ROCESS Stage 4 Marketing Plan carried out Scaled to entire market Continuous competitive analysis Adjustments to profit and cost estimates from Business Plan

PAGE- 18 The New Product Description P ART 1 - T HE P ROCESS Post Implementation Review Metrics are used to determine success 495% customer service levels 425% acceptance rate in targeted market 418% ROI A final business evaluation will ensure that the product fits the customers’ needs as best as possible and that all possible market opportunities are maximized

PAGE- 19 The New Product Concept P ART 2 - T HE P RODUCT The Concept GPS will develop a set of desktop procurement tools (along with AMEX Technologies) for Middle and Large Market clients which will allow procurement personnel within the client company to automate the RFQ & RFP processes. Preferred payment for this set of procurement tools will be through the American Express Card Products. The Procurement Tools will be marketed through existing sales channels and via MarketMile and AMEX web site.

PAGE- 20 The Specific Criteria P ART 2 - T HE P RODUCT 4Product should be flexible and easy to use for the client 4Cycle time for sell should be less than 6 months âProduct should encourage customer loyalty through high customer satisfaction 4The product should save the client money based on their current situation 4Customers should be able to maximize resources using this Product 4Customers should have someone to turn to for help 4Quality should be very apparent to the customer

PAGE- 21 The Business Evaluation P ART 2 - T HE P RODUCT Six Key Elements 4Corporate Environment 4Product Definition 4Potential Market 4Marketability 4Finance 4Legal The New Product Scored 112 Points Only 100 points needed to pass

PAGE- 22 Next Steps P ART 2 - T HE P RODUCT Develop a pilot of the product and service 1 Test pilot with a cross-functional team Metrics (Post-Eval) 2 3 Test pilot with a focus group 4 Product Launch 5