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Healthcare Outsourcing Market Report: September 2014 – Preview Deck
Topic: IT Outsourcing in Life Sciences Industry – Service Provider Profile Compendium 2014
Copyright © 2014, Everest Global, Inc. EGR-2014-12-PD-1219
Copyright © 2014, Everest Global, Inc. EGR-2014-12-PD-1219
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Custom research capabilities Benchmarking | Pricing, delivery model, skill portfolio Peer analysis | Scope, sourcing models, locations Locations | Cost, skills, sustainability, portfolio – plus a tracking tool Tracking services | Service providers, locations, risk Other | Market intelligence, service provider capabilities, technologies, contract
assessment
Finance & accounting
Procurement
Human resources
Recruitment process
PricePointTM
Global sourcing
Locations InsiderTM
Contact center
Transaction Intelligence
Healthcare information technology
Information technology
Cloud VistaTM
BFSI1 business process
BFSI1 information technology
Market VistaTM
Global services tracking across functions, sourcing models, locations, and service providers – industry tracking reports also available
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Background and scope of the research
Background of the research The healthcare industry is witnessing an unprecedented churn and transformation, leading to a surge in IT and business process outsourcing adoption. Driven by regulatory reforms, tenets of consumerization, market consolidation, and emergence of next-generation digital avenues, outsourcing has accelerated in the space. Service providers across the spectrum have beefed up their capabilities to cater to this growing market. With healthcare companies stepping up adoption of outsourced delivery, there is an uptick in demand for relevant research and market intelligence on demand and supply trends in healthcare outsourcing across the three major market segments – payer, provider, and life sciences. The need is more pronounced for the vertical-specific IT outsourcing 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 ITO in the healthcare vertical. In this report, we analyze the capabilities of 18 ITO service providers specific to the global life sciences 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 life sciences ITO Assessment of the service providers on a number of capability-related dimensions Characteristics of Leaders, Major Contenders, and Emerging Players on the Everest Group PEAK Matrix Profiles for the 18 life sciences ITO service providers Scope of this report Industry: Life sciences (pharmaceuticals, medical devices, biotechnology, and other life sciences1) Services: Large (TCV > US$25 million), multi-year (>3 years), and annuity-based application outsourcing Geography: Global Sourcing model: Third-party ITO transactions; excludes shared services or Global In-house Centers (GICs)
1 Includes healthcare data & information services and medical products distribution
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This report examines the service provider landscape for large annuity contracts in the life sciences ITO market
Private health plans Public health plans
Payer
Pharmaceuticals Medical devices Biotechnology Others1
Life sciences
Large health systems Stand-alone hospitals/clinics Pharmacists Physician practices Diagnostic labs
Provider
Healthcare
Services industry
Traditional IO Remote Infrastructure
Management (RIM) Infrastructure Management
Services (IMS) Cloud
IT Infrastructure Outsourcing (IO)
Applications development Applications maintenance Independent testing Package implementation ERP services Business intelligence / data
warehousing
IT Application Outsourcing (AO)
BFSI-specific BPO HRO FAO PO Contact center Knowledge services
Business Process Outsourcing (BPO)
IT strategy / operations consulting
Business consulting Infrastructure consulting Infrastructure roll-outs
Consulting
This report assesses ITO service providers in the life sciences vertical with a focus on large (TCV > US$25 million), annuity-based, and multi-year (>3 years) relationships
NOT EXHAUSTIVE Focus of report
1 Includes healthcare data & information services and medical products distribution
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Service provider landscape and capability profiles
Each report provides: Mapping of service providers on Everest Group’s PEAK Matrix
for the specific subsegment Capability profiles of service providers capturing their ITO
services experience in specific subsegments. This includes: – Service provider overview: Details of ITO services capabilities,
key investments, proprietary solutions, and technological expertise
– Functional / Line of Business (LoB) focus – Transactions overview for ITO services – Delivery footprint
Annual report
Each report provides an overview of the ITO market for the specific healthcare subsegment
Analysis includes the following content in the specific healthcare subsegment: – Trends in ITO in the overall healthcare industry – Market trends and activity for large ITO relationships – Emerging themes driving ITO – Future outlook for ITO
Payer
Life sciences
Provider
This report is a part of Everest Group’s series of six reports focused on ITO in healthcare in 2014
Focus of report
Payer
Life sciences
Provider
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Everest Group’s healthcare outsourcing research is based on two key sources of proprietary information
Everest Group’s proprietary database of 1,000+ large, multi-year ITO contracts within healthcare (updated annually)
The database tracks the following elements of each large ITO relationship: – Buyer details, including industry, size, and signing region – Contract details, including TCV, ACV, term, start date, service provider
FTEs, and pricing structure – Activity broken down separately for healthcare payer, life sciences, and
provider, and by business subsegment (for example, pharmaceuticals and medical devices)
– Scope coverage of functional activities and buyer geography – Global sourcing leverage, including delivery locations and level of
offshoring
Note: We continually monitor market developments and track additional service providers beyond those included in the analysis Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any information that is contract-specific, will be presented back to the industry only in an
aggregated fashion
Service providers covered in the analysis 1
Everest Group’s proprietary database of operational capability of major healthcare ITO service providers (updated annually)
The database tracks the following capability elements for each service provider: – Overall revenue, total employees, and healthcare employees – Major healthcare ITO clients and recent wins – Recent healthcare-related developments – Healthcare ITO delivery locations – Healthcare ITO service suite – Domain capabilities, proprietary solutions, and intellectual property
investments
2
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Table of contents
Introduction and overview 5 Section I: PEAK Matrix for life sciences ITO 11 Summary of key messages 12 Service provider landscape 14 Life sciences ITO PEAK Matrix 2014 19
Section II: Profiles of life sciences ITO service providers 23 Accenture 24 CGI 30 Cognizant 34 Dell 42 Fujitsu 47 HCL 52 Hexaware 59 HP 63 IBM 67 IGATE 73 Infosys 77 L&T Infotech 84 Syntel 89 TCS 93 Tech Mahindra 101
Topic Page no.
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Table of contents
Section II: Profiles of life sciences ITO service providers (continued) Unisys 107 Virtusa 111 Wipro 114
Appendix 121 Glossary of key terms 122 Healthcare IT outsourcing research calendar 124 References 125
Topic Page no.
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This report provides a comprehensive assessment of the service provider landscape for IT Outsourcing (ITO) services in the life sciences industry, and maps the leading service providers on Everest Group’s PEAK Matrix. It also includes segment-wise analysis incorporating enterprises’ feedback about service providers.
Overview and abbreviated summary of key messages
Some of the findings in this report, among others are:
In 2013, offshore majors outperformed other service provider groups in terms of average ITO revenue accrued from life sciences and FTE strength
However, global majors retained marginally higher revenue productivity per-FTE on account of their solutions-driven portfolio, across applications and infrastructure services
Pharmaceuticals continues to remain a major share of service providers’ life sciences portfolio, with increasing traction in medical devices and biotechnology
Life sciences ITO service provider landscape
Analytics will be a core lever of operational efficiency going forward Fuelled by consolidation, big data, and next-generation technology imperatives, infrastructure
outsourcing in life sciences represents a US$3 billion opportunity over 2013-2020 Among service providers assessed on the PEAK Matrix, Leaders need to evolve into strategic
partners by bringing through leadership to engagements, Major contenders need to ramp up capabilities in next-generation IT avenues, and Emerging Players need to address staff augmentation issues as well as build domain expertise
Implications for key stakeholders
Analysis of the service provider landscape for life sciences ITO leveraging the Everest Group’s PEAK Matrix reveals three distinct categories of service providers: Leaders, Major Contenders, and Emerging Players
The average revenue and headcount of Leaders is over four times that of Major Contenders Leaders accounted for over three-fifths of the new deal activity over the last three years, with nearly
one-fifth deals based in Europe
PEAK Matrix for life sciences ITO
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Everest Group's Life Sciences ITO PEAK Matrix
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for large life sciences ITO relationships1
1 PEAK Matrix specific to large (>US$25 million TCV), multi-year (more than three years) application outsourcing relationships within the life sciences sector; the evaluation this year (2014) is weighted more on Application Outsourcing(AO) as a majority of large deals have application outsourcing in scope
Source: Everest Group (2014)
High
Low Low High
Mar
ket s
ucce
ss
(Tra
nsac
tion
activ
ity)
Delivery capability (Scale, scope, domain investments, and delivery footprint)
75th percentile
75th
per
cent
ile
25th
per
cent
ile
25th percentile
Leaders
Major Contenders
Emerging Players Fujitsu
Virtusa
Hexaware Unisys
Wipro
Dell Services
TCS
Cognizant
HP
CGI
HCL Technologies
Syntel L&T Infotech
Tech Mahindra
Infosys
IGATE
Leaders Major Contenders Emerging Players Star Performers
IBM Accenture
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Summary dashboard | Delivery capability assessment of service providers for large life sciences ITO relationships (page 1 of x)
Scale Scope Domain
investments Delivery footprint
Market success
Service provider 4
Measure of capability: High Medium-high Low Medium
Service provider 3
Service provider 1
Service provider 2
Service provider 5
Service provider 6
Source: Everest Group (2014)
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Company description: Company X is a global Information, Communications, and Technology (ICT) company. It offers enterprise solutions, client relationship management, business intelligence, business process quality, operations management, engineering solutions, digital convergence, product lifecycle management, and infrastructure management services Headquarters: xx Website: www.companyx.com
Services offered for the healthcare vertical: IT services across the healthcare payer, provider, and life sciences segments. Offerings for the life sciences segment span drug discovery and development, pharmacovigilance, manufacturing & supply chain, sales and distribution, marketing, regulatory compliance, and general administration, and include application development and maintenance, data analytics, testing, and other IT and BPO services
Major healthcare clients: Pharmaceutical firm A, medical devices company B, biotechnology company C, biopharmaceutical major D
Scale of healthcare subverticals Payer Life sciences Provider
>US$500 million US$100-500 million <US$100 million
Company X | Life sciences ITO profile (page 1 of 6) Corporate and healthcare overview
Geographical mix
FY 2014; US$ million Service mix
FY 2014; US$ million
Key financial parameters Revenue figures in US$ million
Revenue from the healthcare Revenue from other verticals Operating margin
FY 2012 FY 2013 FY 2014
% % %
100% = xx
Europe
Americas
100% = xx
SI/Consulting
AO
IO
BPO LATAM
APAC
Source: Everest Group (2014)
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Headline assessment Life sciences is the largest subsegment within Company X's healthcare portfolio, with a focus on serving ITO requirements of U.S.- and U.K.-based pharmaceutical and biotechnology clients
Scope Demonstrated success in delivering ADM, testing, ERP, DWBI, and
end-user computing services to life sciences clients Large-sized life sciences ITO deals spread across North America and
Europe, with a certain degree of BPO services bundling
Delivery footprint Life sciences ITO clients are served primarily from India, representing a
high offshore leverage Some delivery resources are also based out of client offices in United
States and United Kingdom
Domain investments Proprietary solutions in the life sciences domain include physician
information tools, risk-based clinical trials monitoring, social media solutions, clinical data management, and SCM solutions
Alliances with German, American, and Indian companies across electronic submissions, biostatistics, and integrated clinical systems
Scale Healthcare portfolio exceeds US$XX million in revenue, with more than
YY FTEs for healthcare ITO Life sciences accounts for the majority of healthcare clients, ahead of the
payer and provider subsegments, comprising over ZZ FTEs Around XX active life sciences ITO clients
Transaction success Life sciences ITO deal activity, primarily, with pharmaceutical and
biotechnology clients based in United States and United Kingdom Large life sciences ITO deals exhibit robust characteristics, with an
average TCV of over US$XX million and average deal duration exceeding zz years
Company X | Life sciences ITO profile (page 2 of 6) Life sciences ITO capability assessment and market success
North America EMEA Latin America APAC
Geographic scope Life sciences subsegments Success dashboard1 High Medium Low
Pharma Biotech
Medical devices Others
Everest Group PEAK Matrix for life sciences ITO
High
Low Low High
Mar
ket s
ucce
ss
(Tra
nsac
tion
activ
ity)
Delivery capability (Scale, scope, domain investments, and delivery footprint)
Leaders Major Contenders
Emerging Players
Company X
1 Transaction success for large-sized deals; assessment relative across service providers Source: Everest Group (2014)
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Proprietary solutions (representative list)
Line of business Solutions
Life sciences Clinical services – Solution A: Pre-packaged electronic data capture solution that helps accelerate clinical trials and
improves clinical data management – Risk-based clinical trials monitoring: Service offering based on Oracle CDMS AND CTMS platforms
Discovery – Tool B helps scientists register research entities uniquely, track inventory efficiently, and manage entity
transactions Sales and marketing
– Solution C : A solution to provide complete 360 degree view of physicians to enable best utilization of sales resources
Social media – Framework D: Helps in identifying the right Key Opinion Leaders (KOL) from the industry for specific
areas and provides insight into how industry leaders are perceiving products Cloud
– Cloud solutions helps enterprises build, manage, and govern a unified hybrid cloud environment Compliance
– Drug safety as a service: An integrated IT-BPO offering in the space of pharmacovigilance Supply chain and distribution
– Tool E: A solution in the serialization and ePedigree space to meet regulatory mandates, reduce drug counterfeiting, increase efficacy of recall management, and enhance patient safety. Enables each individual unit of a drug to be tracked and traced along its journey from the manufacturing plant to patients
– Solution F: Integrated IT-BPO offering in the space of pack artwork management and pharmacovigilance
Company X | Life sciences ITO profile (page 3 of 6) ITO domain investments and transaction activity
Source: Everest Group (2014)
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Company X | Life sciences ITO profile (page 4 of 6) ITO domain investments and transaction activity
Key alliances (representative list)
Alliance partner Purpose of alliance
Partner A To develop a dedicated innovation lab for the healthcare and life sciences vertical
Partner B To establish presence in areas such as bioassays, biomarkers, and genomics-based products
Partner C For providing Oracle clinical products integration services
(Several) Alliances with German, American, and Indian companies in the areas of electronic submissions, bio statistics, CDISC standards, integrated clinical systems, discovery informatics, customer experience, artwork & pack management, serialization & ePedigree, and pharmacovigilance
Source: Everest Group (2014)
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Company X | Life sciences ITO profile (page 5 of 6) ITO domain investments and transaction activity
Recent transaction activity1
Buyer’s name Announcement date
TCV estimate (US$ million)
Duration (years) AO/IO/both Contract details and services
Pharmaceutical firm A
May 2013 XX Y AO Application development, testing, project management, communications, and training to support the design, build, and deployment of IT lifecycle services
Medical devices company B
January 2013 YY Z Both Legacy modernization and implementation of cloud-based infrastructure
Biotechnology organization C
December 2012 ZZ X IO Global infrastructure management services including provisioning, maintenance, and upscaling
1 Publicly-announced life sciences ITO transactions during 2010 to 2014 Source: Everest Group (2014)
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Company X | Life sciences ITO profile (page 6 of 6) Key ITO delivery locations
India
NOT EXHAUSTIVE
U.S.
UK
Confirmed location for life sciences ITO 500-1,000 ITO FTEs
>5,000 ITO FTEs 100-500 ITO FTEs
1,000-5,000 ITO FTEs <100 ITO FTEs
Australia
China
Brazil
Source: Everest Group (2014)
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2014 healthcare IT outsourcing research calendar
Topic Release date
IT Outsourcing (ITO) in the Life Sciences Industry: Analytics Driving the Innovation Engine – Annual Report 2014 June-2014
Published Current
State of the Healthcare & Life Sciences ITO Market: 2014 January-2014
IT Outsourcing in Healthcare Payer Industry – Annual Report 2014 Q3-2014
IT Outsourcing in Healthcare Payer Industry – Service Provider Landscape with PEAK Matrix™ Assessment 2014 Q3-2014
IT Outsourcing in Healthcare Payer Industry – Service Provider Profile Compendium 2014 Q3-2014
IT Outsourcing in Healthcare Provider Industry – Annual Report 2014 Q4-2014
IT Outsourcing in Healthcare Provider Industry – Service Provider Landscape with PEAK Matrix™ Assessment 2014 Q4-2014
IT Outsourcing in Healthcare Provider Industry – Service Provider Profile Compendium 2014 Q4-2014
IT Outsourcing in Life Sciences – Service Provider Profile Compendium 2014 September-2014
June-2014 Webinar Deck: What’s Driving the Surge in Life Sciences IT Outsourcing?
IT Outsourcing in Life Sciences Industry – Service Provider Landscape with PEAK Matrix™ Assessment 2014 July-2014
Viewpoint: Consumerization strategies in Healthcare Q3-2014
Viewpoint: Opportunities in the focus segments of HLS: Pharmaceutical and Mid-tier payers Q1-2015
State of the Healthcare & Life Sciences ITO Market: 2015 Q1-2015
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Additional healthcare research references
The following documents are recommended for additional insight on the topic covered in this report. The recommended documents either provide additional details on the topic or complementary content that may be of interest 1. IT Outsourcing in Life Sciences Industry – Service Provider Landscape with PEAK Matrix™ Assessment 2014
(EGR-2014-12-R-1147); 2014. This report provides a comprehensive assessment of the service provider landscape for IT outsourcing (ITO) services in the life sciences industry. It maps 18 leading service providers on the Everest Group PEAK Matrix, which is a composite index of a range of distinct metrics related to a service provider’s capability and market success
2. IT Outsourcing (ITO) in the Life Sciences Industry – Annual Report 2014: Analytics Driving the Innovation Engine (EGR-2014-12-R-1144); 2014. This report provides an overview of the ITO market for the life sciences industry. Analysis includes market size & growth, forecasts (up to 2020), demand drivers, adoption & scope trends, key areas of investment, and implications for key stakeholders. The report focusses specifically on how analytics has emerged as a core enabler of operational efficiency and will be a primary tool for life sciences firms looking to drive key strategic initiatives
3. IT Outsourcing in Life Sciences Industry – Service Provider Landscape with PEAK Matrix™ Assessment and Profile Compendium 2013 (EGR-2013-12-R-0970); 2013. This report provides a comprehensive assessment of the service provider landscape for IT outsourcing (ITO) services in the life sciences industry. It maps 14 leading service providers on the Everest Group PEAK Matrix and includes detailed profiles of these service providers. This evaluation categorizes the service providers into Leaders, Major Contenders, and Emerging Players. It also identifies top three service providers as Star Performers, based on their year on year movement on the Matrix
For more information on this and other research published by Everest Group, please contact us: Jimit Arora, Vice President: Abhishek Singh, Practice Director: Nitish Mittal, Senior Analyst:
Phone: +1-214-451-3110 Email: [email protected]
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