Vertical focus is the key for survival in BPO

NEW DELHI: As the BPO industry moves into a phase of consolidation, the imperatives of the industry have also changed. From projecting India as a destination of low-cost services, BPO companies today have to project as a vertical specialist and prove to the client how best the company can deliver value. The only way under the circumstances is to expand the folio of services in the vertical in which the company is operating.

Coming from Anurag Jain, the Founder and CEO of Vision Healthsource, the Chennai-based company, which has recently been acquired by Perot Systems, this ought to carry weight. Jain is an industry veteran being one of the earliest Indians to enter the BPO space as early as 1997 and start medical billing services. Today the company has the distinction of being valued at about five times its turnover because of the niche it has carved in the offshoring industry for US medical billing services.

With a turnover of $ 2.4 million, the company has been acquired for $10 million by Perot Systems of which $3 million is in cash and the additional $ seven million is to be paid if certain performance targets are met by 2006.

The second part of the transaction deal has been inserted because Perot Systems, impressed by the team of Vision Healthsource, wanted to find a way to sustain the interest of the team in the management of the company.

Vision Healthsource is unique in its space because it is providing billing, follow-up and payment retrieval on the health provider’s side. It started its services in 1997 providing billing services for a group of doctors. Today it has 25 clients in the health provider’s side. Most of the Indian BPO companies are operating in the payer’s side of the healthcare industry.

In the US healthcare industry, billing for patients is done by either the health providers, which include hospitals, organizations, associations or groups of doctors or by the payers, which mostly comprise the insurance industry.

Perot Systems has operations in the US focused on the payer’s side. Therefore Vision’s business model perfectly complimented its existing model. Besides, Perot Systems has a strong onshore model while Vision Healthsource has a sound offshore model. With the merger now, Vision Healthsource plans to expand its operations to multiple locations across the globe. The possible locations include near-shoring destinations like Canada or the Caribbean Islands or to locations like Philippines.

Jain said that vertical focus helps the company not only to consolidate its hold on clients by providing value-added service which are possible only after acquiring domain knowledge but that it is the only way to give growth to its manpower.

One of the potential threats for the BPO industry is the exhaustion of the talent pool available to the industry in a couple of year’s time. Vision Healthsource with 500 employees has been able to keep its attrition rates down to as low as three percent. Jain attributes this low attrition to the successful streamlining of operation within the organization bringing in transparency to both clients and employees.

However, Jain acknowledges that it is time to provide something more to employees than just streamlined process. By expanding the company’s profile horizontally within the vertical, by virtue of the acquisition, employees now have more options to move up the value-chain and find growth within the organization.

(CNS)