Indian IT Vendors aggressively targeting US Healthcare Outsourcing Market for growth.

1. Analysis & Outlook
Healthcare Outsourcing2013-2020 – Indian IT Vendors current scenario& Outlook 2020
Cognizant Technology has a far lead in this regard as they moved into healthcare long before and
for them Healthcare is the second largest vertical after BFSI. Cognizant is the largest IT services
provider in healthcare, earning $1.97 billion from the segment in the year to 31 March 2012,
more than three times the $602 million healthcare and life sciences revenue of India’s largest
software services provider TCS. Infosys earned $680 million from healthcare, Wipro $615.5
million and HCL $500 million. As on 31 March 2012, healthcare was the second-largest source
of revenue, behind only financial services, for Cognizant. It made up 25.2% of the company’s
revenue, compared to 11.3% for HCL Technologies Ltd, 5.2% for Tata Consultancy ServicesLtd
(TCS), 9% for Infosys Ltd and 9.9% for Wipro Ltd. Cognizant ranked sixth in the 2013
‘Healthcare Informatics 100’ list of healthcare IT services providers by revenue in the US, while
Infosys Public Services Inc. a subsidiary of Infosys, ranked 15 and was the only Indian IT
services provider to figure in the list.
HCL Technologies has also seen growth in its healthcare revenue, which grew 55.8% in the 12
months to 31 March, and at a compounded annual growth rate of 37.66% in the last three years.
The company acquired UK-based SAP consulting company Axon Group Plc., in December
2008, which enabled it to position itself as a system integrator to its life sciences and healthcare
clients globally. The company also announced that it will actively engage in new business
(accountable care) and technology business models by 2014. The focus areas include healthcare
reform and member experience management and testing. Infosys and Wipro are also sharpening
their focus on healthcare capabilities. Infosys over the last three years has invested in building
several key capabilities in healthcare in the US. Infosys is assisting several clients in multiple
opportunity areas: setting up state exchange, onboarding health insurers to public exchanges,
end-to-end testing etc. according to Eric Paternoster, chief executive officer and president,
Infosys Public Services.
Sangita Singh, senior vice-president and head, healthcare and life sciences, Wipro said Company
strategy is to focus on select few customers to co-create solutions that can drive patient-centricity
and reduce costs. There is, therefore, a huge thrust on domain-specific solutions, combined with
Wipro’s strongholds of infrastructure services, BPO (business process outsourcing) and custom
apps. Indian outsourcing companies have mostly focused on presence in the health insurance
sectorbut not in the provider (hospital) market. There has been a significant slowdown in health
insurance sector which forces Indian vendors to look at healthcare provider market where they
have not been able to make a dent in the provider market, which is growing rapidly. The
established players make $50- 60 million from each large EMR implementations in the provider
segment. Healthcare outsourcing in India is growing at about 31% and is expected to reach USD
280 billion by 2020 and the global healthcare BPO market is growing at a CAGR of over 21%.
Healthcare BPO offers tremendous opportunity to companies in India, according to Talent
Neuron blog post.
Rajesh Prabhakar
Analyst Bio @ http://itbizcharts.blogspot.com/