Outsourcing companies, particularly in India, are in the process of expanding their verticals to accommodate the changes in the market. The financial services and IT services are two of the most common areas in which outsourcing companies are now focusing; however, there is one area that Indian companies have been slow to tap and that is healthcare outsourcing. Healthcare outsourcing, such as medical billing and medical coding, is an area that is expanding rapidly.
It was reported earlier this May that healthcare advisory firm Healthcare Informatics released a list of their top 10 healthcare service providers and that no Indian company appeared on the roster. IT companies working the global sphere have seen the advantages of tapping the healthcare sector as they have seen an increase in their revenues. But before a company can stretch its presence into the healthcare sector, it is important for them establish expertise in this particular domain as healthcare requires a deeper understanding of the nature of business, not to mention various credentials and qualifications. Such an investment has a huge return as the healthcare market is current worth $100 billion. Some global IT companies like Cognizant (NASDAQ:CTSH), which is headquartered in the United States, have a background in healthcare outsourcing since its parent company owns IMS Health. CSC (NYSE:CSC), on the other hand, has been providing healthcare IT outsourcing for over ten years already.
As the month of May began, Indian IT company Infosys Technologies Ltd. (NYSE:INFY) expressed interest in acquiring companies in Europe and Japan. Also, the company’s interest towards the healthcare and public services sector has been raised. Infosys Technologies Ltd. aims to perform acquisitions, not solely for the reason of growth but for strategic purposes. Companies are now realizing the importance of healthcare outsourcing and how they can benefit from them.
Other IT companies that have shown interest in the same areas as Infosys are Tata Consultancy Services (TCS.NS) and Wipro Limited (NYSE:WIT). IT companies are somewhat pressed to make strategic choices as competition between Indian IT companies and global IT service providers are becoming tighter.
An IT solutions and service provider coming from a different region in the globe, SCIOinspire, recently expanded to India to capitalize on the current healthcare expansion in the country. The IT company, which has anticipated the booming of the healthcare industry, acquired three healthcare companies in the United States and it has helped boost their revenues in the most recent fiscal year. However, a challenge that is being faced by the SCIOinspire is human resources. As the industry that they currently service requires an extensive knowledge of the ins and outs of healthcare processes, it is highly suggested for IT healthcare companies to perform a more targeted recruitment.
The healthcare outsourcing sector may have gained traction from other kinds of companies in the past years, but Indian IT companies today are exerting twice as much effort just to be able to remain competitive against other outsourcers.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.