Global player IMS Health has acquired Baring Private Equity-backed PharmARC Analytics Solutions Ltd, a Bangalore-based knowledge process outsourcing (KPO) firm focused on pharma and healthcare verticals, for an undisclosed sum.

This acquisition strengthens IMS Health’s business process outsourcing capabilities and complements its suite of proprietary technology and software applications, the company said on the acquisition.

IMS Health is owned by private equity major TPG Capital and the CPP Investment Board, who acquired it for $5.2 billion in 2009. Founded in 1954, IMS Health (formerly Intercontinental Marketing Services) provides analytics, commercial services and business intelligence platforms to its healthcare clients in more than 100 countries. The company is based in Norwalk, Connecticut, with offices across Japan, China, the Middle East, the Asia-Pacific, North and South Europe, Canada, Latin America and Africa.

Bangalore-headquartered PharmARC was founded by Siraj Dhanani and Amit Sadana in 2003. The KPO has offices in Basel (Switzerland) and New Jersey (USA), and provides sales & marketing analytics and business consulting services across pharmaceutical and healthcare industry. It claims to cater to 15 of the top 20 pharma companies, as well as over 50 life sciences companies in the USA, Europe, the Middle East and the Asia-Pacific region.

Baring India Private Equity Fund II invested $10 million in PharmARC in 2006.

“Life sciences companies are looking for partners that can pull together the right market and technology expertise, information assets and resources to help them optimise commercial operations worldwide,” said Chris Nickum, president of IMS Commercial Effectiveness Services while commenting on the acquisition.

The healthcare KPO space has recently seen considerable action in terms of merger and acquisition. While US software services firm Cognizant Technology Solutions acquired marketRx, Inc., for $135 million (Rs 537 crore) in an all-cash deal, New York Stock Exchange-listed BPO major WNS acquired another Bangalore-based analytics firm Marketics for an estimated $65 million. In fact, smaller companies with specialised expertise in niche areas have always been targeted by big technology companies. For instance, in the past three years, Wipro acquired more than a dozen firms at prices ranging from $20 million to $600 million.

Source:http://www.vccircle.com/500/news/ims-health-acquires-baring-india-backed-kpo-pharmarc-analytics

For advertising executive Govind Nair, working in India’s outsourcing industry for a California telecoms firm means burning the candle at both ends for his customers.

“They try to be considerate. They know there’s a 12-and-a-half-hour time difference between India and San Francisco but we still end up getting up early and going to bed late,” Nair, 30, says.

Such hours are becoming increasingly routine for many young Indian professionals as they liaise with counterparts in the United States and other Western countries on high-end “smart work” projects.

India, known as the world’s largest back office with its cheaper, educated English-speaking workforce, is expanding its “knowledge processing outsourcing”, offering market research, statistical analysis, legal, health and a host of other services.

The sector — familiarly known as KPO — “is the next wave of global sourcing for India”, Som Mittal, head of the National Association of Software and Services Companies (Nasscom) told an industry conference last week.

Performing “value-added tasks” such as writing equity reports and legal work can mean 40 to 50 percent higher billing rates than for lower-value jobs in call centres fielding inquiries about bank accounts, industry officials say.

KPO revenues have been growing at 26 percent annually according to research house Crisil, outpacing the overall expansion of the flagship outsourcing industry that has helped make India an emerging market powerhouse.

The country now has 70 per cent, or $2 billion, of the $2.9 billion global KPO industry, Crisil says. North America provides 65 per cent of the sector’s revenues, Britain 20 per cent and continental Europe 10 per cent.

Nasscom believes the fresh economic troubles in Europe and the United States may accelerate KPO sector growth as Western firms seek to harness the technical and financial expertise of India’s supply of university graduates, lawyers, accountants and MBAs.
“India has a tremendous advantage in its technical, analytic and managerial skills,” Matthew Vallance, chief executive of one of India’s biggest back office companies, Firstsource Solutions, told AFP.

The $2 billion is still a fraction of India’s overall outsourcing revenues, expected to total $68 to $70 billion this year. But Crisil forecasts in a new report that revenues from outsourcing knowledge-intensive skills will nearly triple to $5.5 billion by the end of 2015.

“India is moving up the value chain,” said Crisil chief executive Roopa Kudva, noting Indian lawyers now research case law and put together arguments to be presented in court in the United States, Britain and elsewhere.

Bankers prepare papers for acquisitions, while nurses monitor the condition of housebound patients in the West.

Doing value-added work has become increasingly important for India as it seeks to preserve its overall global outsourcing dominance, especially after ceding its crown as the world’s leading call centre hub to the Philippines.

Last December, the Philippines, which also has a trained, English-speaking workforce with a strong service culture, edged past India to become the largest call centre operator in the world, logging $5.5 billion in annual revenues compared with India’s $5.3 billion.

“India is still ahead (in total offshoring), although other offshoring sites like the Philippines and Indonesia are emerging,” said Tervinderjit Singh, a research director at global consultancy Gartner.

“But these countries are still not mature enough in high-level professional work which India can provide,” he said.

Source:http://timesofindia.indiatimes.com/tech/news/outsourcing/Outsourcing-cos-seek-revenue-from-KPOs/articleshow/9893954.cms