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Topic: IT Application Outsourcing (AO) in the HealthcareProvider Industry – Service Provider LandscapeHealthcare Outsourci...
Our research offerings for global servicesSubscription information             Market Vista   The full report is included...
Background and scope of the researchBackground of the research The healthcare industry has witnessed a rapid increase in ...
This report examines the service provider landscape for largeannuity contracts in the healthcare provider AO market       ...
A number of service providers deliver AO services tohealthcare providers; Everest Group analyzed the capability ofeight se...
Table of contents                     (page 1 of 2)Topic                                                                  ...
Table of contents                        (page 2 of 2)Topic                                                               ...
Overview and abbreviated summary of key messagesThis report provides a comprehensive assessment of the service provider la...
This study offers four distinct chapters providing a deep diveinto the healthcare provider AO service provider landscape;b...
This report also features detailed profiles of the serviceproviders featured on the Everest Group PEAK Matrix forProvider ...
Healthcare outsourcing research agenda                                                                                    ...
Additional healthcare research referencesThe following documents are recommended for additional insight on the topic cover...
Everest GroupLeading clients from insight to actionEverest Group is an advisor to business leaders on the next generation ...
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IT Application Outsourcing (AO) in the Healthcare Provider Industry - Service Provider Landscape

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The healthcare industry witnessed a rapid increase in the IT and business process outsourcing adoption in recent years. Regulatory reform, consumerization of healthcare, market consolidation, and emergence of new technologies accelerated outsourcing in the healthcare market.

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IT Application Outsourcing (AO) in the Healthcare Provider Industry - Service Provider Landscape

  1. 1. Topic: IT Application Outsourcing (AO) in the HealthcareProvider Industry – Service Provider LandscapeHealthcare OutsourcingReport: February 2013 – Preview Deck Copyright © 2013, Everest Global, Inc. EGR-2013-12-PD-0818
  2. 2. Our research offerings for global servicesSubscription information Market Vista The full report is included in Global services tracking across functions, sourcing models, locations, and the following subscription(s) service providers – industry tracking reports also available – Healthcare Banking, financial Healthcare Finance & accounting In addition to published services, insurance research, a subscription may include analyst inquiry, data Information cuts, and other services Procurement Cloud Vista technology If you want to learn whether your organization has a Human resources Recruitment process Global sourcing subscription agreement or request information on pricing and subscription options, Service provider Transaction PricePoint please contact us: Intelligence Intelligence – info@everestgrp.com – +1-214-451-3110 Custom research capabilities  Benchmarking | Pricing, delivery model, skill portfolio  Peer analysis | Scope, sourcing models, locations  Locations | Cost, skills, sustainability, portfolio  Tracking services | Service providers, locations, risk  Other | Market intelligence, service provider capabilities, technologies Copyright © 2013, Everest Global, Inc. 2 EGR-2013-12-PD-0818
  3. 3. Background and scope of the researchBackground of the research The healthcare industry has witnessed a rapid increase in IT and business process outsourcing adoption in recent years. Regulatory reform, consumerization of healthcare, market consolidation, and emergence of new technologies has accelerated outsourcing in the healthcare market. A number and variety of service providers have developed capabilities to cater to this growing market Healthcare companies are stepping up adoption of outsourced delivery. There is an uptick in the demand for research and market intelligence on trends in healthcare outsourcing across the three major market segments – payer, provider, and life sciences. The need is more pronounced for the vertical-specific Application Outsourcing (AO) function, where business challenges are driving greater adoption. Everest Group’s healthcare outsourcing research program addresses this market requirement by analyzing outsourcing trends and service provider capabilities specific to IT AO in the healthcare verticalIn this report, we analyze the capabilities of eight AO service providers specific to the global healthcare provider sector.These service providers are mapped on the Everest Group Performance | Experience | Ability | Knowledge (PEAK)Matrix, which is a composite index of a range of distinct metrics related to a provider’s capability and market success.We focus on: The landscape of service providers for healthcare provider AO Assessment of the service providers on a number of capability-related dimensions Characteristics of the Leaders, Major Contenders, and Emerging Players on Everest Group PEAK Matrix Implications for healthcare provider AO buyers and service providersScope of this report Industry: Healthcare providers (large health systems, standalone hospitals/clinics, pharmacists, physician practices, and diagnostic labs) Services: Large (TCV >US$25 million), multi-year (>3 years), and annuity-based application outsourcing Geography: Global Sourcing model: Third-party AO transactions; excludes shared services or Global In-house Centers (GICs) Copyright © 2013, Everest Global, Inc. 3 EGR-2013-12-PD-0818
  4. 4. This report examines the service provider landscape for largeannuity contracts in the healthcare provider AO market NOT EXHAUSTIVE Healthcare Focus of reportPayer Life sciences Provider Private health plans  Pharmaceuticals  Large health systems Public health plans  Medical devices  Standalone hospitals/clinics  Biotechnology  Pharmacists  Others1  Physician practices  Diagnostic labs Services industryIT Infrastructure IT Application Outsourcing Business ProcessOutsourcing (IO) (AO) Outsourcing (BPO) Consulting Traditional IO  Applications development  BFSI-specific BPO  IT strategy / operations Remote Infrastructure  Applications maintenance  HRO consulting Management (RIM)  Independent testing  FAO  Business consulting Infrastructure Management  Package implementation  PO  Infrastructure consulting Services (IMS)  ERP services  Contact center  Infrastructure roll-outs Cloud  Business intelligence / data  Knowledge services warehousingThis report assesses IT AO service providers in the healthcare provider segment with a focus on large (TCV >US$25 million), annuity-based, and multi-year (>3 years) relationships1 Includes healthcare data and information services and medical products distribution Copyright © 2013, Everest Global, Inc. 4 EGR-2013-12-PD-0818
  5. 5. A number of service providers deliver AO services tohealthcare providers; Everest Group analyzed the capability ofeight service providers with success in large transactionsService provider outreach (partial list) Service providers assessed Criteria for inclusion in the assessment  Success in large provider AO relationships, i.e., – Over US$25 million TCV – Over 3 years relationship duration – Active as of Assessment based on: December 31, 2011  RFIs submitted by service providers1  Everest Group’s  Everest Group Transactions Intelligence experience and RFI database response  Service provider disclosures and interviews  Everest Group’s interaction with healthcare provider AO buyers1 Assessment for Accenture, CSC, HP ES, and IBM is based on Everest Group’s proprietary Transaction Intelligence (TI) database, service providers’ disclosures, and Everest Group’s interactions with healthcare provider AO buyers Copyright © 2013, Everest Global, Inc. 5 EGR-2013-12-PD-0818
  6. 6. Table of contents (page 1 of 2)Topic Page no.Background and methodology 5Summary of key messages 11Section I: Healthcare provider AO service provider landscape 13 Healthcare provider AO service providers 14 Delivery capability assessment 18 – Scale 18 – Scope 19 – Domain investments 22 – Delivery footprint 24 Market success assessment 25 – Transaction activity 25Section II: PEAK Matrix for healthcare provider AO 26 Service provider capability summary dashboard 27 Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for provider AO 28 Key characteristics of service providers on the PEAK Matrix 29 Copyright © 2013, Everest Global, Inc. 6 EGR-2013-12-PD-0818
  7. 7. Table of contents (page 2 of 2)Topic Page no.Section III: Implications for key stakeholders 34 Implications for buyers 35 Implications for service providers 36Section IV: Healthcare provider AO service provider profiles 37 Accenture 38 CGI 43 Cognizant 48 CSC 54 Dell Services 60 HP Enterprise Services 67 IBM 72 Mahindra Satyam 78Appendix 83 Glossary of key terms 84 Healthcare research calendar 86 References 87 Copyright © 2013, Everest Global, Inc. 7 EGR-2013-12-PD-0818
  8. 8. Overview and abbreviated summary of key messagesThis report provides a comprehensive assessment of the service provider landscape for application outsourcing (AO) services inthe healthcare provider industry, and maps the leading service providers on Everest Group’s PEAK Matrix. It also includesdetailed profiles of the service providers featured on the PEAK Matrix.Some of the findings in this report, among others, are:Provider AO service  Despite a large number of service providers catering to the global healthcare market, there are onlyprovider landscape a handful of players that have achieved success with large-sized (TCV >US$25 million), multi-year (deal duration >three years) AO contracts with healthcare provider clients  The assessed service providers’ AO activity with healthcare providers is largely concentrated in North America, particularly the United States  All examined service providers have more mature AO relationships with hospitals and large health systems as compared to other provider subsegmentsPEAK Matrix for  Analysis of the service provider landscape for provider AO leveraging the Everest Group’s PEAKprovider AO Matrix reveals three distinct categories of service providers: Leaders, Major Contenders, and Emerging Players  Leaders account for a majority of industry revenues from large provider AO deals; they have an extensive suite of proprietary solutions spanning ICD-10 transformation, Health Information Exchange (HIE), Electronic Health Record (EHR), and health portals  Major Contenders and Emerging Players have a relatively smaller scale; their proprietary solutions include compliance tools, solution accelerators, and health information management toolsImplications for key  In addition to leveraging IT service providers for earning the IT adoption-linked incentives,stakeholders healthcare providers need to put in place a robust technology strategy and forge effective, long- term partnerships for executing their IT roadmap  IT service providers need to stay abreast of the rapidly evolving demand and regulatory scenario in the healthcare provider industry in order to remain relevant in an increasingly competitive market Copyright © 2013, Everest Global, Inc. 8 EGR-2013-12-PD-0818
  9. 9. This study offers four distinct chapters providing a deep diveinto the healthcare provider AO service provider landscape;below are four charts to illustrate the depth of the reportAO services scope coverage Provider AO technology capability Measure of activity High Medium Low Measure of capability Very high High Medium Low Functional scope of provider AO contracts ADM Testing ERP and SI Other AO Service Strength provider assessment Examples of technology investments / proprietary solutions Service provider 1  Service provider 1’s proprietary solutions in the provider space include: Solutions for Health Information Exchange (HIE), Electronic Health Service provider 2 Service Records (EHR), e-health, and framework for ICD-10 migration provider 1  Service provider 1 acquired XYZ company’s clinical decision support Service provider 3 platform in 2010, enhancing its technology capabilities in the healthcare provider space Service provider 4 Service provider 5 Service provider 6  Service provider 2’s proprietary solutions in the payer space include: ICD-10 transition solution, HIPAA 5010 compliance tool suite, hospital Service Service provider 7 performance management solution, and healthcare portal solution provider 2  Service provider 2 has an alliance with ABC to jointly develop Service provider 8 healthcare predictive analytics solutionsProvider AO market success Provider AO PEAK Matrix Measure of activity High Medium Low Everest Group Performance | Experience | Ability | Knowledge Large active provider AO deals Provider AO revenue growth (PEAK) Matrix for large provider AO relationships Number of deals 2009-11; CAGR (percent) High Leaders Dell Services Service provider 1 Service provider 1 (Transaction activity) >20 Service provider 2 >20% Service provider 2 Major Contenders Accenture CSC Market success Service provider 3 Service provider 3 IBM Service provider 4 Service provider 1 Cognizant HP ES 5-20 Service provider 5 10-20% Service provider 2 CGI Service provider 6 Service provider 3 Mahindra Satyam Service provider 7 Service provider 1 <5 Service provider 8 <10% Service provider 2 Emerging Players Low Service provider 9 Service provider 3 Low Delivery capability High (Scale, scope, domain investments, and delivery footprint)Source: Everest Group (2013) Copyright © 2013, Everest Global, Inc. 9 EGR-2013-12-PD-0818
  10. 10. This report also features detailed profiles of the serviceproviders featured on the Everest Group PEAK Matrix forProvider AOSource: Everest Group (2013) Copyright © 2013, Everest Global, Inc. 10 EGR-2013-12-PD-0818
  11. 11. Healthcare outsourcing research agenda Published CurrentTopic Release date “IT Application Outsourcing (AO) in the Healthcare Payer Industry –€ Annual Report 2012 July-2012IT Application Outsourcing (AO) in the Healthcare Payer Industry – Service Provider Landscape July-2012IT Application Outsourcing (AO) in the Life Sciences Industry – Annual Report 2012 September-2012IT Application Outsourcing (AO) in the Life Sciences Industry – Service Provider Landscape November-2012Application Outsourcing (AO) in the Healthcare Provider Industry – Is IT the Cure? – Annual Report 2012 December-2012IT Application Outsourcing (AO) in the Healthcare Provider Industry – Service Provider Landscape February-2013Consolidation in the Healthcare Payer-Provider Industry Q1-2013IT Application Outsourcing (AO) in the Healthcare Payer Industry – Annual Report 2013 Q2-2013IT Application Outsourcing (AO) in the Healthcare Payer Industry – Service Provider Landscape Q2-2013Regulation and Reforms in Healthcare Q2-2013IT Application Outsourcing (AO) in the Life Sciences Industry – Annual Report 2013 Q3-2013IT Application Outsourcing (AO) in the Life Sciences Industry – Service Provider Landscape Q3-2013Consumerization in Healthcare Q3-2013Application Outsourcing (AO) in the Healthcare Provider Industry – Annual Report 2013 Q4-2013IT Application Outsourcing (AO) in the Healthcare Provider Industry – Service Provider Landscape Q4-2013SMAC in Healthcare – Drivers and Implications Q4-2013 Copyright © 2013, Everest Global, Inc. 11 EGR-2013-12-PD-0818
  12. 12. Additional healthcare research referencesThe following documents are recommended for additional insight on the topic covered in this report. The recommendeddocuments either provide additional details on the topic or complementary content that may be of interest:1. IT Application Outsourcing (AO) in the Healthcare Provider Industry – Annual Report 2012 (EGR-2012-12-R-0808); 2012. This report provides an overview of the AO market for the healthcare provider industry. Analysis includes key trends in market size & growth, demand drivers, adoption & scope trends, emerging themes, key areas of investment, and outlook for the coming year. The report also provides an introduction to the service provider landscape for the healthcare provider industry2. IT Application Outsourcing (AO) in the Healthcare Payer Industry – Service Provider Landscape (EGR-2012-12-R-0721); 2012. This report provides an in-depth analysis of the service provider landscape for AO in the healthcare payer segment. It includes PEAK Matrix for Payer AO, analysis of service providers in terms of their delivery capability and market success, and detailed profiles of the service providers featured on Payer AO PEAK Matrix3. IT Application Outsourcing (AO) in the Life Sciences Industry – Service Provider Landscape (EGR-2012-12-R-0782); 2012. This report provides an in-depth analysis of the service provider landscape for AO in the life sciences segment. It includes PEAK Matrix for Life Sciences AO, analysis of service providers in terms of their delivery capability and market success, and detailed profiles of the service providers featured on Life Sciences AO PEAK Matrix For more information on this and other research published by Everest Group, please contact us: Jimit Arora, Vice President: Jimit.arora@everestgrp.com Mridul Gupta, Senior Analyst: Mridul.gupta@everestgrp.com Service Provider Intelligence Team: SITeam@everestgrp.com Everest Group Two Galleria Tower 13455 Noel Road, Suite 2100 Phone: +1-214-451-3110 Dallas, TX 75240 Email: info@everestgrp.com Copyright © 2013, Everest Global, Inc. 12 EGR-2013-12-PD-0818
  13. 13. Everest GroupLeading clients from insight to actionEverest Group is an advisor to business leaders on the next generation of global services with a worldwide reputation for helpingGlobal 1000 firms dramatically improve their performance by optimizing their back- and middle-office business services. With afact-based approach driving outcomes, Everest Group counsels organizations with complex challenges related to the use anddelivery of global services in their pursuits to balance short-term needs with long-term goals. Through its practical consulting,original research, and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent andsourcing models, technologies, and management approaches. Established in 1991, Everest Group serves users of globalservices, providers of services, country organizations, and private equity firms in six continents across all industry categories. Formore information, please visit www.everestgrp.com and research.everestgrp.com.Dallas (Corporate Headquarters) Toronto India / Middle Eastinfo@everestgrp.com canada@everestgrp.com india@everestgrp.com+1-214-451-3000 +1-416-865-2033 +91-124-496-1000New York Londoninfo@everestgrp.com unitedkingdom@everestgrp.com+1-646-805-4000 +44-207-129-1318Stay connectedWebsites Twitter Blogswww.everestgrp.com @EverestGroup www.sherpasinblueshirts.comresearch.everestgrp.com @Everest_Cloud www.gainingaltitudeinthecloud.com Copyright © 2013, Everest Global, Inc. 13 EGR-2013-12-PD-0818

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