TAIL MAVERICK SPEND WHAT YOU DONT KNOW CAN

TAIL & MAVERICK SPEND: WHAT YOU DON’T KNOW CAN HURT YOU This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 1

What is Tail Spend? Tail spend is that spend for any firm, which is not actively managed in all the spend categories and may have an impact on the firm's financial performance due to its impact on SG&A and COGS. it contains a small portion of the spend (10– 20% under each spend category) but large number of suppliers accounting for it. This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 2

“Automating B 2 B payments…can create an interconnected, automated world that provides financial prowess and deep intelligence, turning B 2 B payments into a strategic business process. ” —Andrew Bartolini, Ardent Partners “The State of B 2 B Payments 2015: Emerging Business Value” This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 3 3

Source: Mc. Kinsey Global Payments Map 2014 This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 4 4

B 2 B SUPPLIER PAYMENTS Direct $ Indirect ~10 s 1, 000 s 100 s Source: CAPS Research 2016 This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 5

MULTIPLE SOURCES OF TRUTH SUPPLIER BUYER CRM B A Procurement Systems Order to Cash (O 2 C) C D PURCHASE PROCESS Invoicing Systems (EIPP) E Factoring, Discounting F G Credit Rating/Scoring Buyer’s Bank KSupplier’s Bank Supplier Directory Vendor Master SWIFT L I H Buyer’s Bank PAY Credit Cards Collections K PCI Compliance & Tokenization This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE L Escrow Services INVOICE PROCESS Credit Line Financing Supply PAYMENT Chain PROCESS Financing 6

THE B 2 B GAP TO SOLVE AP Automation Procurement ERP/Accounting INVOICE PROCESS PURCHASE PROCESS NOT INTEGRATED Payments Financing Currencies This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE Cash Flow Management 7

THE IMPACT TO BUYERS/SUPPLIERS VISIBILITY CFOs report poor VISIBILITY into payments COSTS DELAYS CONTROL 60%+ 30% 78% payments are handled manually due to mismatches B 2 B invoices are paid AFTER the due period companies cannot forecast CASH FLOW accurately Source: Hackett Group 2015 This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 8

ANATOMY OF INDIRECT SPEND 35% 65% Strategic Sourcing Spend 28% Spot Buying $ 37% Maverick/Rogue Spend Strategic Sourcing Spend Spot Buying ~10 s 1, 000 s 100 s Number of Suppliers Source: Hackett Group This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 9

A 65% OPPORTUNITY Spot Buy Unclassified / Misclassified Off-contract, non-PO Low Value Non-Compliant Fragmented This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 10

LOTS OF IDEAS Build a Buying Desk Create Tail Spend Analytics Consolidate Suppliers Outsource Buying This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE Leverage Your Purchasing Card Program Forced Employee Compliance 11

IT’S NOT SO SIMPLE… Build a Buying Desk Create Tail Spend Analytics Too Many Categories Multiple Systems Consolidate Suppliers Leverage Your Purchasing Card Program Outsource Buying Forced Employee Compliance Limited Data Too Much Effort Disconnected Payments This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 12

CONNECTING THE DOTS IT’S NOT SO SIMPLE… Spot Buy Off-Contract, Non-PO Unclassified / Misclassified Low Value PURCHASE PROCESS Non-Compliant INVOICE PROCESS PAYMENT PROCESS Too Many Categories Expanded Catalogs Fragmented Enhanced Data Limited Data Consolidated Systems Multiple Systems Platform Too Much Effort Minimal Effort Disconnected Payments Integrated Payments This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 13

FROM PRODUCTS Purchasing Card Buyer Initiated Payments ACH/EFT Card Processing v. Payment Underwriting Checks Transaction Data Fraud & Risk Management AML/KYC Wires Servicing Corporate Account Reconciliation Banking & Compliance This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE Merchant Financing On-Card Lending Predictive Analytics Foreign Exchange Supply Chain Solutions 14

TO PLATFORM& ECOSYSTEM AP Automation Procurement PAYMENTS WORKING CAPITAL ERP/Accounting INSIGHTS COMMERCIAL PAYMENTS GATEWAY ACH/EFT Underwriting Checks Card Processing Transaction Data Fraud & Risk Management AML/KYC Wires Servicing Banking & Compliance This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE Merchant Financing On-Card Lending Predictive Analytics Foreign Exchange Supply Chain Solutions 15

PROGRESS Global Partners Engaged Digital Platform Multiple B 2 B Platform Deployments This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE Tail & Maverick Spend Solutions 16

American Express Spend Analytics Our unique Spend IQ analysis delivers customized, actionable insights for execution of your strategy. PROCESS METHOD ANALYSIS AP SPEND FILE Understand your current mix of procurement and payment methods to assess progress in electronic payment migration INVOICE ASSESSMENT Identify opportunities to enhance process efficiencies. Gain insight into your invoice frequency and invoice size to strike a balance between process efficiency and control SPEED-OF-PAY ANALYSIS Develop a plan to manage working capital by leveraging our experience in cash management This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE SUPPLIER SEGMENTATION Leverage our proprietary process to target best-fit suppliers that can help you to realize hard dollar savings ACTIONABLE PLAN WITH INSIGHTS 17

Opportunity Overview Unlocking Financial Value from your Tail Spend $$$ EFT Wire Strategic Vendor Relationships (Early Pay Discounts) # Txn Size ($)/ Control Dynamic Discounting $$ Buyer Initiated Payments Larger Non Strategic Vendor Relationships (Catalogue Spend & Invoices) ## Single-use v. Payments $ Corporate Card / Purchasing Card ### Non-Strategic Vendor Relationships (Tail Spend) # of Vendor Relationships This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 18

Impacts Unsecured Capital Manage & Improve Working Capital Incremental Revenue Process Improvement & Efficiencies This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 19

QUESTIONS? This material contains information that is proprietary and confidential to American Express. It cannot be shared with third parties without American Express’ written consent. AMERICAN EXPRESS PROPRIETARY & CONFIDENTIAL. DO NOT COPY. DO NOT DISTRIBUTE 20