As Nasik Goes The BPO Way, Mega Pharma IT Off-shoring / Outsourcing Opportunities Arise
posted in Outsourcing News and Top Outsourcing deals |Source: www.business-standard.com
Lake Systems Pvt. Ltd. (LSPL), a Bangalore-based healthcare business process outsourcing (BPO) major, is setting up its first unit in Nashik. Initially, it will employ-100 professionals, and this will be LSPL’s first BPO unit in the Indian state of Maharashtra and it’s second in India. Located in the Satpur area of Maharashtra Industrial Development Corporation (MIDC), it is expected to begin operating by end-April 2007.
Pratibha Nakil, a director in LSPL confirms that as a part of the firm’s expansion plans, a healthcare BPO unit is being set up at Nashik, where a 3,500-sq. ft. property has been leased in the Satpur MIDC area of Nashik. Operations will being with 100-cmployees, gradually increasing the strength of its workforce. With a major focus on medical transcription (MT), LSPL has most of its clients in the US and Australia.
According to Nakil, the business volume of the global MT industry is around $22-billion of which, 20% comes from India, and the size of business generated by the MT industry annually in India is estimated at $5-billion. While, Bangalore, Hyderabad and Delhi are the prominent MT industry centres in India, however, the business is beginning to see a shifting to smaller cities, such as, Pune, Kochi, Coimbatore and Nashik.
Currently, LSPL with a BPO unit in Bangalore employing 150-people, is a leading national outsourcer offering data transcription and document management services to hospitals, multi-specialty clinics and individual physicians in the UK, the US, Germany, and Australia.
This, even as IT firms see potential in the healthcare and pharma business, due to the global healthcare industry being under pressure to reduce research and administrative costs and meet tighter compliance and security mandates, both in Europe and the USA. As margins remain under pressure, pharma companies, health insurance players and health maintenance organisations (HMOs) are looking at alternatives to cut costs and meet the US Food and Drug Administration (FDA) rule mandates. K. Muralikrishna, Managing Director of Helios & Matheson, a Chennai-based information technology firm says: “Healthcare organisations outsource less than 10% of their IT budget.” Thus, this market has begun to represent great outsourcing opportunities for players in the IT industry.
“The global healthcare IT outsourcing market is estimated at around $80-billion and growing by 12% every year,” according to Murlikrishan, adding: “Automation in the industry is extremely low. As pressure from consumers’ increases, players will need to outsource an increasing share of their IT budget. With costs six to seven times lower than in the US, Indian IT firms stand to benefit from this opportunity.”
The pharmaceutical and healthcare industries in the US are experiencing a turbulent patch, as the struggle ensues to replace the traditional blockbuster model of drug development with one that enables development of safer, more efficacious drugs. This means the industry is struggling to cope with rapidly rising costs, inconsistent delivery and inadequate access in many countries.
These pressures have led the two industries in to working closely together, to realise the value of information collected and to provide better products and services. However, it is new technologies like common data standards and security-rich systems that may well play a major role in enabling this convergence.
And, all this while, Helios & Matheson has been building a strong customer base, making four acquisitions in the last five years, and adding to their list of customers, which notably now includes Pfizer, only the world’s largest pharma company and Delta Healthcare. Murlikrishan says: “We hope to be able to improve margins by farming out activities to India.”
Not to be left out of a share in the pharma off-shoring / outsourcing pie, other Indian firms have begun to gear up to the IT outsourcing opportunity in the healthcare industry. Only last month, GlaxoSmithKline (GSK) and Tata Consultancy Services (TCS) announced a new agreement for establishing a global drug development support centre in Mumbai to help meet the demands of a growing GSK pipeline. Under a multi-year, multi-million dollar contract, TCS will provide a variety of services in clinical research, including clinical data management and clinical submissions support.
