it application outsourcing (ao) in the healthcare provider industry - service provider landscape
DESCRIPTION
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.TRANSCRIPT
Topic: IT Application Outsourcing (AO) in the Healthcare Provider Industry – Service Provider Landscape
Copyright © 2013, Everest Global, Inc. EGR-2013-12-PD-0818
Healthcare Outsourcing Report: February 2013 – Preview Deck
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Background 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 vertical
In 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 providers Scope 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)
Background and scope of the research
Copyright © 2013, Everest Global, Inc. EGR-2013-12-PD-0818
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This report examines the service provider landscape for large annuity contracts in the healthcare provider AO market
Private health plans Public health plans
Payer
Pharmaceuticals Medical devices Biotechnology Others1
Life sciences
Large health systems Standalone 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 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) relationships
NOT EXHAUSTIVE Focus of report
1 Includes healthcare data and information services and medical products distribution
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A number of service providers deliver AO services to healthcare providers; Everest Group analyzed the capability of eight service providers with success in large transactions
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
December 31, 2011 Everest Group’s
experience and RFI response
Service provider outreach (partial list)
Assessment based on: RFIs submitted by service providers1
Everest Group Transactions Intelligence database
Service provider disclosures and interviews Everest Group’s interaction with healthcare
provider AO buyers
1 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
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Table of contents (page 1 of 2)
Background and methodology 5
Summary of key messages 11
Section 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 25
Section 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
Topic Page no.
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Table of contents (page 2 of 2)
Section III: Implications for key stakeholders 34 Implications for buyers 35
Implications for service providers 36
Section 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 78
Appendix 83 Glossary of key terms 84
Healthcare research calendar 86
References 87
Topic Page no.
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This report provides a comprehensive assessment of the service provider landscape for application outsourcing (AO) services in the healthcare provider industry, and maps the leading service providers on Everest Group’s PEAK Matrix. It also includes detailed profiles of the service providers featured on the PEAK Matrix.
Provider AO service provider landscape
PEAK Matrix for provider AO
Overview and abbreviated summary of key messages
Analysis of the service provider landscape for provider AO leveraging the Everest Group’s PEAK 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 tools
Some of the findings in this report, among others, are:
Despite a large number of service providers catering to the global healthcare market, there are only 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 subsegments
Implications for key stakeholders
In addition to leveraging IT service providers for earning the IT adoption-linked incentives, 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
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This study offers four distinct chapters providing a deep dive into the healthcare provider AO service provider landscape; below are four charts to illustrate the depth of the report
AO services scope coverage
Provider AO PEAK Matrix Provider AO market success
Provider AO technology capability Functional scope of provider AO contracts
ADM
Service provider 1
Service provider 2
Service provider 5
Service provider 3
Service provider 4
Service provider 6
Service provider 7
Service provider 8
Testing ERP and SI Other AO
High Medium Low Measure of activity
Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for large provider AO relationships Large active provider AO deals
Number of deals Provider AO revenue growth 2009-11; CAGR (percent)
>20
5-20
<5
Service provider 1
Service provider 2
Service provider 3
Service provider 4
Service provider 5
Service provider 6
Service provider 7
Service provider 8
Service provider 9
>20%
10-20%
<10%
Service provider 1
Service provider 2
Service provider 3
Service provider 1
Service provider 2
Service provider 3
Service provider 1
Service provider 2
Service provider 3
Service provider 1’s proprietary solutions in the provider space include: Solutions for Health Information Exchange (HIE), Electronic Health Records (EHR), e-health, and framework for ICD-10 migration
Service provider 1 acquired XYZ company’s clinical decision support platform in 2010, enhancing its technology capabilities in the healthcare provider space
Service provider 2’s proprietary solutions in the payer space include: ICD-10 transition solution, HIPAA 5010 compliance tool suite, hospital performance management solution, and healthcare portal solution
Service provider 2 has an alliance with ABC to jointly develop healthcare predictive analytics solutions
Service provider Examples of technology investments / proprietary solutions
Strength assessment
Service provider 1
Service provider 2
Very high High Low Medium Measure of capability
High Medium Low Measure of activity
High
Low Low High Delivery capability (Scale, scope, domain investments, and delivery footprint)
Leaders
Major Contenders
Emerging Players
Mar
ket s
ucce
ss
(Tra
nsac
tion
activ
ity)
Mahindra Satyam
Dell Services
CSC Accenture
HP ES CGI
Cognizant IBM
Source: Everest Group (2013)
Copyright © 2013, Everest Global, Inc. EGR-2013-12-PD-0818
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This report also features detailed profiles of the service providers featured on the Everest Group PEAK Matrix for Provider AO
Source: Everest Group (2013)
Copyright © 2013, Everest Global, Inc. EGR-2013-12-PD-0818
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Healthcare outsourcing research agenda
Topic Release date
IT Application Outsourcing (AO) in the Healthcare Payer Industry –�� Annual Report 2012 July-2012
IT Application Outsourcing (AO) in the Healthcare Payer Industry – Service Provider Landscape July-2012
IT Application Outsourcing (AO) in the Life Sciences Industry – Annual Report 2012 September-2012
Application Outsourcing (AO) in the Healthcare Provider Industry – Is IT the Cure? – Annual Report 2012 December-2012
IT Application Outsourcing (AO) in the Healthcare Provider Industry – Service Provider Landscape February-2013
IT Application Outsourcing (AO) in the Life Sciences Industry – Service Provider Landscape November-2012
Consolidation in the Healthcare Payer-Provider Industry Q1-2013
IT Application Outsourcing (AO) in the Healthcare Payer Industry – Annual Report 2013 Q2-2013
IT Application Outsourcing (AO) in the Healthcare Payer Industry – Service Provider Landscape Q2-2013
Regulation and Reforms in Healthcare Q2-2013
IT Application Outsourcing (AO) in the Life Sciences Industry – Annual Report 2013 Q3-2013
IT Application Outsourcing (AO) in the Life Sciences Industry – Service Provider Landscape Q3-2013
Consumerization in Healthcare Q3-2013
Application Outsourcing (AO) in the Healthcare Provider Industry – Annual Report 2013 Q4-2013
IT Application Outsourcing (AO) in the Healthcare Provider Industry – Service Provider Landscape Q4-2013
SMAC in Healthcare – Drivers and Implications Q4-2013
Published Current
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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 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 industry
2. 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 Matrix
3. 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: Mridul Gupta, Senior Analyst: Service Provider Intelligence Team:
Phone: +1-214-451-3110 Email: [email protected]
Everest Group Two Galleria Tower 13455 Noel Road, Suite 2100 Dallas, TX 75240
[email protected] [email protected] [email protected]
Additional healthcare research references
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