The insurance outsourcing industry is moving at a fast pace in response to the need for rapid deployment of digital platforms and offerings, as well as advancements in new distribution models that are emerging via ‘insurtech’ start-ups. Here I take a look at some of the key trends driving the insurance BPS market in 2017, both in terms of delivery and transformation, and by individual service line.

New distribution models, analytics & automation

Health insurance start-ups (Oscar Health, Clover Health, Bright Health, etc.) have been flourishing, followed by property & casualty insurance (Lemonade, Verifly, Metromile, Wrisk, etc.) and life & annuities insurance (Ladder, League, InforcePro, etc.), who are also seeing an increasing amount of investment. Outsourcing vendors will be actively looking to partner with, or potentially acquire, such companies in order to leverage their capabilities on an add-on basis, or using a completely transformative approach. And the insurance start-ups that will be most targeted by vendors are those investing in new distribution models.

Insurtech developments will bring more regulations at federal level in the U.S., as the application of new operational models will overtake the current state-level regulation framework of insurance companies. It is also possible that the new regulations will allow for the fostering of further innovation compared to current state regulatory frameworks.

Big data and analytics in insurance will see further growth, stemming from the vast amounts of data stored by insurance carriers. Vendors will either develop offerings to leverage such information, or will acquire companies in order to do so. It is still commonplace to find old-school insurers who are unable to analyze and leverage their clients’ and prospective clients’ data.

In terms of operating systems, vendors will continue to optimize legacy platforms with add-on proprietary or third party software, as well as retire dysfunctional and costly systems for newer ones that have modern distribution model capabilities. Digital transformation will increase among insurers, with larger numbers of insurance carriers shifting their operational model towards emerging market segments (millennials, middle-market consumers, etc.).

In the area of automation, the insurance sector has been at the forefront of RPA adoption to date, and this will continue in 2017. Meanwhile, AI technology is taking small steps towards greater adoption within insurance offerings, mostly in policyholder-facing applications. Policyholders will continue to request better, more personalized, engagement by their carriers through omni-channels, with a digital approach, with the policyholder engagement market segment seeing growth of more than 10% per annum.

Elsewhere, wider application of telematics offerings among passenger vehicles and industrial devices will allow for more accurate and individualized calculation of premiums.

Trends for 2017 by insurance service line

Property & Casualty BPS trends include:

• Launching new digital products and services in untapped markets for traditional insurers
• Emergence of fully digitally-operating carriers with a Bermuda-style regulatory framework, backed by PE/VC firms
• Emergence of new products for traditional insurers (drone insurance, on demand insurance, etc.)
• Wider application of analytics for process improvement and trend identification among policyholders.

Life & Annuity BPS trends include:

• Insurers outsourcing more responsibility to vendors that are able to provide specialized actuarial and predictive analytics services targeting customer retention
• Insurers requiring guidance on regulatory product adjustment from Solvency II implementations
• The middle-income and millennials market in the U.S. will see increased growth, as investments in digital channel communications expand
• Vendors will continue to improve customer service levels, CSAT scores and customer retention rates.

Healthcare Payer BPS trends include:

• The future of Obamacare and health insurance exchanges in the U.S. is uncertain after the Trump election. There will definitely be changes in the ACA care models and payers will most probably bear some of this cost of change in healthcare policy
• Consolidation among lower-tier healthcare payers will continue its momentum in 2017, creating opportunities for legacy platform retirements and updates from outsourcing vendors, eliminating disparate assets in newly-formed organizations
• Population health management and wellness programs through innovative delivery and distribution models will see significant growth, as well as engaging with patients through omni-channels, improving retention and satisfaction
• Applying analytics that identify opportunities for process improvement, as well as reducing fraud, waste, and abuse will be a top priority for payers
• Distant monitoring of patients and telemedicine will also see increased growth
• Preventive care and wellness offerings, in conjunction with traditional healthcare insurance, will see a rise in demand.

We now turn our attention to Dell Services, which has adopted an automation focus across its life and healthcare insurance BPS processes.

Focusing on healthcare payer & provider and life insurance process automation

In 2016, life insurance accounts for around 30% of Dell Services’ overall BPS revenues and healthcare payer accounts for approximately 35%, with healthcare provider making up the balance. Dell Services takes a platform-led approach to its BPS:

1. It has its own LifeSys platform for life insurance, on to which it migrates a client’s book of business and provides administration services in its own environment; or

2. It partners with a third party supplier for platform capability and tailors it to fit the needs of the book of business, from which it can then provide services, e.g. Dell Services uses partner ikaSystems for its healthcare payer platform needs, on top of which it layers its Dell Business Process Management Suite (DBPMS) tools. The tools include:

3. An enterprise dashboard: including KPI tracking and trend analysis for SLA metrics

4. Client extranet: including an issues log

5. Queue management: including skill-set based routing and priority allocation.

Automation Ideation led by BPS delivery teams

Unlike other providers, who tend to be led by their clients with respect to automation, the process at Dell  Services starts with an internal ‘ideas generation’ stage, achieved either through Dell’s ‘LEAP’ (Listen, Engage, Act, Progress) portal where agents are able to log ideas, together with perceived benefits (and are rewarded if their ideas are selected) or via the Business Process Improvement (BPI) team who carry out a ‘click study’ to identify ways in which the process could be re-engineered or automated. In line with its peers, an internal concern about increasing automation was the inevitable change in job composition; for this reason, the LEAP portal is considered particularly important to ensure employees are involved and engaged in driving the initiative forward. In addition, supervisors are targeted with an annual 5%-15% AFTE target. Once an idea has been selected, a feasibility study takes place before the idea is tested and bots are deployed by the central AFTE automation team. Bot management is then passed to the operations team while the bots are monitored through the central bot command center.

Balancing AFTEs with FTEs

In line with the market, Dell Services has concentrated its efforts on applying automation to high volume processes, which account for ~30% to 35% of its overall book of business. To achieve this, it is targeting the introduction of ~300-400 AFTEs year on year, though this is not a static number since clients are on-boarded throughout the year. The overall aim is to achieve around 6% productivity improvement per annum.

Although Dell Services does use third-party RPA platforms, it has developed its own “AFTE” platform incorporated within the Dell Business Process Management Platform. AFTE bots rather than third-party bots are typically deployed where the Dell BPMS platform is already being used or is to be used.

High volume processes (in which AFTEs are being used to varying extents) within each of Dell Services’ insurance services include:

• Life insurance:
  • Data entry and indexing: freeing up FTEs to carry out other activities such as policy holder services where less work is typically carried out by AFTEs – though this is something that Dell is looking to change and where Dell is investing in automation initiatives
  • Policy issuing: currently, the work is handled 50% by FTEs and 50% by AFTEs, with Dell seeking greater tool maturity before it is able to drive greater automation here
  • Premium accounting
• Healthcare payer:
  • In-bound calls: FTE-led
  • Adjustments: FTE-led
  • Adjudication: 50% AFTE, 50% FTE
  • Claim processing: FTE-led
  • Member enrolment: FTE-led
  • Provider maintenance: 50% AFTE, 50% FTE
• Healthcare provider:
  • File download: exclusively AFTE
  • Medical coding: 50% AFTE, 50% FTE
  • Change entry: FTE-led
  • Payment posting: AFTE-led
  • Credit balancing: 50% AFTE, 50% FTE
  • Accounts receivables: FTE-led

A simple example to illustrate some of the quantifiable benefits that have been achieved through automation can be seen through the work that took place to automate call center operations at one of Dell’s life insurance clients. Prior to the introduction of automation, call center agents were required to use a number of screens to capture customer information, which often resulted in comparatively low accuracy, and a high handling time. The system was not user-friendly and baseline training typically took around 10 weeks. Ultimately SLAs were being missed. To address this, Dell condensed the numerous screens into one screen and introduced rule-based processes to ensure no manual calculations were required to complete the form, unlike previously, where up to six manual calculations were required. As a result, AHT fell from 471 seconds to 374 and training took ~7 weeks, as opposed to 10. The quality of data capture increased from 88% to 95% and the average time taken to update notes fell from 110 seconds to 15 seconds¸ because the system was largely able to perform updates itself.

Plans to Implement Machine Learning within Dell BPM Platform

Over the last four years, Dell has extended its capabilities from simple script based-processing, to the development of AFTEs, including an associated AFTE command center. Going forward, the intention is to incorporate a self-learning capability, implement technologies such as NLP and machine learning within the Dell BPMS platform, and to secure end-to-end automation in the processes that are already largely being carried out by AFTEs, e.g. indexing.

At SE2’s Partnership Forum in Boston last week, the main theme was ‘FutureProof’, and specifically how to prepare and guard your company from regulatory and operational uncertainties. In effect, the life and annuities insurance BPS vendor is future proofing itself by investing heavily in its infrastructure, middleware, and platform capabilities to address its own future needs, as explained by CEO Gautam Thakkar and CIO Vinod Kachroo.

Industry drivers

SE2 identified some of the key trends in the insurance industry that will drive the development of applicable offerings, including:

• The need for insurers to provide a continuous income source through annuities, given an aging population; this is particularly challenging in the current low interest rate environment
• The need to approach customers via social media, using effective data manipulation, to enable better decision-making
• Department of Labor (DOL) regulatory changes that will impact clients.

Strategy for growth

In order to achieve future growth, SE2 will focus on greater innovation in its offerings, and enhancing the customer experience to drive better results. Specifically, SE2 is planning to:

• Further invest in data analytics to help identify growth opportunities and operational improvements
• Build RPA and AI capabilities for greater process automation
• Adopt algorithmic underwriting, whereby data aggregation and manipulation will enable automated contract creation for simple policies
• Develop technology and service offerings that address DOL regulatory changes
• Exploit IoT to the extent possible
• Target the millennial and middle-age markets, which have greatest growth potential (as identified in NelsonHall’s Targeting Life, Annuities & Pensions BPS market analysts study earlier this year)
• Increase its use of digitization
• Adopt a ‘direct to consumer’ market approach through omni-channels that simplify the process of insurance buying and administration.

SE2’s roadmap for the coming years also includes a new distributor dashboard, further web enhancements through personalized UIs, efficiency improvements in its call centres, fund automation, and increased use of business rules engines.

To assist it in achieving its goals, SE2 has partnered with:

• NTT Data for infrastructure management and application testing
• Automation Anywhere for RPA  
• InRule Technology for business rules management capability
• Informatica for data management and technology transformation.

SE2 is focusing on expanding in the U.S. life market by aggressively increasing its headcount in its New Jersey and Topeka facilities in the U.S., as well as in Waterford in Ireland. It is also looking at potential acquisitions to strengthen its life offerings.

Helping clients meet operational goals

At the forum, SE2 clients Security Benefit Corporation and Global Atlantic described how SE2 is positively impacting their companies’ operational goals. Security Benefit’s CEO, Mike Kiley, stated that his company has continuously increased its policies count and assets under management with the administrative help of SE2, while Global Atlantic’s President and CEO, Nick von Moltke, emphasized the benefit of having a partner that is continually investing in its infrastructure, a key contributor to future success and the ability to adapt to changing market conditions.

A big advantage for SE2 is its sole focus on the insurance vertical. Also, as a private company, it is under less pressure to deliver strong results every quarter. The fact that it operates using its own proprietary platform also distinguishes it from insurance BPS vendors that rely upon third party software to deliver their offerings. These advantages, along with its high employee retention rate, are good indicators that SE2 is well positioned for future growth.

Wipro started its automation journey in the late noughties and has since gone on to set up a dedicated RPA practice, and also developed its own AI platform, Wipro Holmes. Currently, Wipro is principally partnering with Automation Anywhere for RPA software.

Clients showing early interest had questions around which insurance processes bots could most easily be deployed in, and where should they be applying RPA. The processes Wipro found to be most suitable for application of RPA in the insurance sector are claims processing and new business, and hence these are the key focus areas for Wipro.

Efficiency improvements of ~40% in target insurance sub-processes

Today, over 50% of Wipro’s RPA clients are in the BFSI sector, with ~40% using bots for data entry processes and 60% for rules-based services. Wipro currently has four clients for RPA services in the insurance sector split across life, annuities & pensions (LA&P), property & casualty (P&C), and healthcare insurance. Two of these companies are focused on a single geography and two are multi-geography, including U.S., Europe, LATAM and the Middle East.  

One of the insurance clients is a Swiss provider of life and P&C services for whom Wipro provides RPA in support of new business data entry. Pre-bots, the filling in of a new business form required the use of multiple unsynchronized screens to collect the necessary information. To address this issue, Wipro developed an interface (a replica of the application form) to enable 100% automated data entry using bots, a typical ‘swivel chair’ use of RPA. This yielded a 30% - 40% efficiency improvement.

In the healthcare payer sector, Wipro has implemented RPA in support of provider contract data management, specifically in the area of contract validation. Here, Wipro designed four bots in 90 days, automating ~75% of the contract validation process and improving productivity by ~40%.

In 2016, Wipro has noticed a shift in customer attitude, with organizations now appreciating the enhanced accuracy and level of auditability that RPA brings.

Of course, the implementation of RPA is not without its objections. One frequent question from organizations just starting the RPA journey is ‘how do I stop bots going berserk if the process changes?’, since once programmed, the bots are unable to do anything other than what they have been programmed to do. Accordingly, Wipro ensures that any changes that occur in a given process are flagged up in the command centre before an attempt is made for them to be carried out by a bot, and a signal is given that the bot needs ‘re-training’ in order to carry out that process.

Secondly, IT departments sometimes ask how long the bots are required to stay in the work environment and how do they fit into an overall IT transformation strategy. Wipro’s response is to treat the bot like an FTE and to keep it for as long as it is achieving benefit, ‘re-training’ it as required. Wipro suggests that bots wouldn’t conflict with the aims of an IT transformation, and ought to be considered as complementary to an IT transformation.

Complementing RPA with Cognitive using Holmes

So far, so good for Wipro regarding its application of RPA in the insurance sector. RPA is being used to address data entry processes (40% of activity) and rules-based transaction processing areas such as claims (60% of current activity). However, this still leaves the question of complementing the rigid process execution of RPA with machine learning and self-learning processes, and also the question of addressing knowledge-based processing requiring human judgment.

This is where Wipro Holmes comes into the picture – a proprietary AI platform with applications for cognitive process automation, knowledge visualization, and predictive services. The platform is not currently being used with insurance clients, but conversations are expected to start within the next 9 months. It is expected that, in contrast to the RPA conversations which were led by Wipro in more than 95% of cases, the AI discussion will be led by existing RPA clients and across a wider pool of services, including finance & accounting (F&A).

Accordingly, the focus now is on developing Wipro Holmes, to ensure it is ready for use with clients in 2017. Insurance activities that will benefit first from this platform could include the area of Know Your Customer (KYC) compliance, to enable more rapid client on-boarding. 

HPS' 2015 revenues were $223m. It has achieved a CAAGR of 38% in the last three years, driven both from adding new healthcare payers and from the increase in individuals or groups eligible for first-time insurance coverage due to the ACA initiations; the company now supports ~20% of Individual health plans in the U.S.

The acquisition will be a major boost to Wipro’s ambitions in healthcare and specifically healthcare payer BPS, an area where the company had made modest at best progress since its acquisition of Infocrossing, and the Infocrossing Healthcare Services, Inc. unit in 2007. Wipro Infocrossing currently has healthcare payer BPS contracts with two State Medicaid agencies, including Missouri’s Department of Social Services.

The acquisition of HPS will enable Wipro to move beyond support for the Over 65 market in the form of Medicaid and Medicare, and to address the growing market for individual plans in the Under 65 B2C market. It will provide Wipro with a more modern building block around which to position its healthcare payer BPS business. Such is the importance attached to this building block by Wipro that it is conducting a reverse integration of its healthcare & life sciences business into HPS, with the overall unit being led by HPS' President and CEO Jeff W. Bak.

The Individual policy market is currently a small part of the overall health plan policy base, but it is one that has been showing double-digit growth with the ongoing extension of health insurance coverage in the U.S. Looking at the future dynamics of this market, Wipro expects that the Individual plan member base will continue to grow for the next three years as health insurance coverage of the population continues to expand and will then stabilize. By this point, Wipro perceives that there will be a secondary growth driver for exchanges with health insurance exchange markets becoming attractive to employers as a mechanism for providing health plans to certain groups of employees such as part-time staff.

HPS currently serves ~35 healthcare payers, with its top ten clients accounting for ~80% of its revenues. Its client list includes Ameritas, Allstate, Assurant Health, Beazley, Cigna, Foresters, Humana, Kaiser Permanente, Starmark, UnitedHealthOne, unum, and vsp. HPS’ niche is in assisting healthcare payers to enter and control their costs around state-based and Federal exchanges; it is focused on the ‘individual’/B2C health plan market. HPS has a platform to support healthcare payers across the Individual policy lifecycle and views the typical journey with a healthcare payer in four steps:

• Helping them to connect with private & public exchanges (using its ExchangeLink platform)
• Assisting them in policy administration & member services (ServiceLink platform)
• Helping them with member acquisition through its licensed agents (SalesLink)
• Assisting them in member retention & loyalty (LoyaltyLink).

With these services, HPS can connect healthcare payers to 40 public exchanges and 150 private health insurance exchanges; and the HPS Insurance Agency connects to a network of ~100k nsurance agents. HPS aims to help payers move beyond medical insurance and offer servicing around digital products in other areas such as dental insurance and even life insurance.

HPS has ~2k employees, all onshore U.S. It offers both SaaS and BPaaS services. Clearly the BPaaS element is extremely attractive to Wipro and in line with its strategy for developing its BPS service. HPS will also give Wipro access to a wider client base among commercial healthcare payers and an opportunity to cross-sell wider services such as offshore-centric claims processing while adding credibility to the company’s onshore presence in the U.S. The non-FTE pricing models used by HPS (such as per member per month for member servicing and on a share of premium/commission for new business) will also be attractive to Wipro

Overall, this acquisition will give Wipro both a leadership position in BPS in the Individual healthcare payer market and also the potential for a fresh start in healthcare payer BPS overall, including opportunities to leverage its services around digital and analytics and to start to move into complementary areas such as population health management, patient monitoring, and ACO support. Possible synergies with other analytics offerings should not be excluded, such as with Wipro’s Marvel CX, in order to further enhance customer experience.

Wipro is on a bit of an acquisition spree at the moment: this will be its fourth acquisition so far in FY 16, following those of:

• Designit, which has enhanced the capabilities of Wipro Digital (part of the Change strategy)
• cellent AG, bringing in scale and local relationships in the key European market of Germany
• Viteos Group, bring in BPaaS capabilities in the financial services sector.

Including HPS, Wipro will be making an overall investment of ~$750m in these acquisitions, all of which are strategic, rather than bolt-on, acquisitions. Like Viteos, HPS will afford Wipro the opportunity to build a ​BPaaS business in one of its principal target sectors.

Footnote: NelsonHall prediction was spot on!

In our January blog on the announcement of the appointment of Abid Neemuchwala as the new Wipro CEO (see here), we said an acquisition like this was highly likely. And in our December 2015 Key Vendor Assessment on Wipro (which will be updated later this week) NelsonHall anticipated that the acquisition spree in FY16 was not finished with Viteos.

If you would like to know more about NelsonHall's extensive coverage of Wipro in our Key Vendor Assessment or any of our IT Services or BPS programs, please contact [email protected]

NelsonHall estimates that the healthcare payer BPS market is worth ~$9.4bn in 2015, and is set to grow at a CAAGR of ~7.6% through 2019, reaching ~$12.6bn in 2019. Of that, we estimate that the government payer market will grow from ~5.3bn to ~7bn, while the commercial payer market will grow from ~4.1bn to ~5.6bn with a CAAGR of ~8.3%.

Health plans are increasingly complying with ACA mandates by trying to provide care to a bigger percentage of the U.S. population, which means that cost reduction is key. There are many opportunities for BPS vendors to help clients reduce costs in areas of intensive manual labor via process automation in both the back office and front office. More than 70% of vendors interviewed by NelsonHall are offering such services, with others planning to do so. There is an increasing tendency to use workflow tools and optimize processes through robotic automation, reducing cost and time in claims management, for example.

Beyond cost reduction, the need for clinical analytics to help improve quality of care is also a key market driver. Healthcare regulations and the ageing long-term care and Medicaid population are driving the need to improve medical management analytics and processes through improving STAR and HEDIS ratings, improving clinical outcomes through use of analytics, improving care management with U.S. qualified nurses, and outcome-based services.

A third key driver is the need to engage members in a more consumer-centric manner. Population health management trends, as well as a changing perception of patients as consumers, means that member engagement offerings are essential for healthcare payers. Relevant services include enrollment, using omni-channel approaches, wellness support, and member engagement through U.S. registered nurses.

According to a panel presentation on healthcare reforms from the global think-tank The Hamilton Group in October 2015, healthcare regulation policies have led to significant decreases in the plan premiums that U.S. insurance consumers pay on average. However, evidence presented showed that patients do not make the optimum choice of health plans when buying insurance. The relative complexity involved in buying insurance in health insurance exchanges (HIX) across the U.S. presents another opportunity for BPS vendors to improve member engagement. Around 40% of vendors interviewed are currently providing such advisory services. These include Concentrix, EXL, HGS and Hewlett Packard Enterprise Services.

Telemedicine, and monitoring long-term care patients from a distance are two more trends on the rise. Xerox has already taken steps in this direction by partnering with HealthSpot, a company providing kiosk-based telehealth services, an alternative to retail and on-site clinics.

In summary, the keys to success in healthcare payer BPS lie in a combination of increased process automation, improved analytics capability, and a more consumer-centric approach.

You can find out much more about what’s driving the U.S. healthcare payer BPS market and about vendors service offerings, as well as understanding the challenges and critical success factors in this market, in NelsonHall’s newly published Targeting Healthcare Payer BPS in the U.S. report.

A year later, EXL delivered full year 2014 revenues that beat revised non-GAAP guidance by $11.6m, finishing the year with 9% growth in Q4, bolstered by better than expected contribution from the recently acquired Overland Solutions (OSI, $12.2m, against the anticipated $10m).

By service type,

• The newly named Operations Management segment (formerly ‘Outsourcing’), continues to represent over three quarters of total revenue and was up 2.7% y/y, or 11% excluding disentanglement costs
• The ‘Analytics and Business Transformation’ segment delivered double digit topline growth every quarter, and 31.9% growth in 2014 overall, reaching $110.6m. EXL’s analytics services business grew 44% in 2014, and now account for 13% of revenue, or $66m. Including contributions from its latest acquisition, RPM Direct, EXL expects its analytics business to reach over $100m in annual revenue in 2015 (or ~20% of total revenue).

Though details of the ‘new EXL’ won’t be revealed until the Investor Day next week, the journey that has been made by EXL this year has been marked by three specialist acquisitions within seven months, the third announced only this week.

• The spending spree started off reasonably small, with Blue Slate Solutions last July for $7m. Blue Slate generates ~85% of its revenues from health insurers (including Medicare contractors) and brings with it a consulting framework that EXL is integrating into its BPO and healthcare technology and analytics capabilities. Blue Slate brought to EXL a specialist onshore staff with domain experience in the U.S. health insurance sector
• The October acquisition for $53m of OSI further added to EXL’s onshore delivery network in the U.S. and to its BPaaS offerings for P&C, particularly in workers’ compensation premium audits
  • These two acquisitions will bring in over $105m incremental revenue in 2015, more than offsetting the headwind of ~$49m from transitioning clients. As well as onshore resources, both have developed proprietary tools and frameworks to support their service delivery
• The third acquisition, yet to be completed, is of RPM Direct (for $47m in cash plus earn outs of up to $23m). RPM Direct will enhance EXL’s marketing analytics capabilities in U.S. insurance, across P&C, life and health segments. EXL had indicated a year ago that marketing and customer analytics are focus areas within its “Decision Analytics” services unit. RPM will broaden the range of services EXL can offer to insurance sector clients

All in all, EXL will have invested over $130m in these three acquisitions, all of which

• Boost its onshore presence in the U.S
• Bring in IP (tools, frameworks, marketing database)
• Bring in specialist domain capabilities in the health payer and other insurance sectors
• Broaden its U.S. client base.

Looking ahead to 2015, EXL has given revenue guidance of $570m to $590m, excluding any impact of RPM, a growth rate of 8.5% to 12.5%. Q1 is the last quarter where revenue headwinds from transitioning clients will have a significant effect.

EXL is developing analytics CoEs, particularly in support of healthcare and insurance and is expecting to sign a number of $10m plus annual revenue clients. Will we see further tuck-in acquisitions to further expand its capabilities in different areas of analytics for insurance and healthcare in 2015? The indications are that this is very possible.

EXL started emphasizing its analytics offerings around 18 months ago: at the time, much of the portfolio was based on India delivery. EXL today has a much richer portfolio to offer in its target verticals in the U.S.

Meanwhile, the U.K. , which accounts for over 20% of global revenues, delivered a strong year; EXL does not provide constant currency growth figures, but reported revenue growth for the U.K. in 2014 was 10%, all of which organic. Were EXL’s spending spree to continue into 2015, maybe U.K./EMEA will come higher up its investment priorities.

Finally, EXL has authorized a three-year $20m annual share repurchase program to offset share dilution from annual employee equity grants.

We note that EXL’s share price is at its highest for over two years and has surged by ~20% since the beginning of the month.

By Fiona Cox and Rachael Stormonth

NelsonHall will be producing its first ever Key Vendor Assesment on EXL in March.

The NelsonHall Vendor Evaluation and Assessment Tool (NEAT) for P&C BPO in the automotive sector is now available to NelsonHall clients, and is also available for a period free-of-charge to buy-side organizations through NelsonHall and through its partners SIG and SSON.

The tool covers a number of P&C BPO business situations, including the provision of end-to-end P&C BPO processes for the automotive sector, specific focus on claims process improvement, reduction of customer churn through improved service levels, and activity in support of improving the underwriter’s use of time and efficiency.

Suppliers of P&C BPO in the automotive sector covered by this NEAT evaluation include CSC, Cognizant, EXL, Genpact, Infosys, Innovation Group, MphasiS, Quindell, Sutherland, TCS,  and WNS.

The NEAT tool for P&C BPO in the automotive sector is part of NelsonHall’s “Speed-to-Source” initiative. The tool sits at the front-end of the vendor screening process and consists of a two-axis model: assessing vendors against their “ability to deliver immediate benefit” to buy-side organizations and their “ability to deliver innovation in support of client-specific requirements”.

The NEAT evaluations are based on a combination of interviews with the vendors and their clients. The vendors are scored against a wide range of criteria, establishing a number of scenarios, each representing a different business situation or client business need.

To add further value, the NEAT tool enables buy-side organizations to input their own weightings and tailor the P&C BPO dataset to their specific requirements across 40 individual vendor evaluation criteria. Using the interactive web-based tool, sourcing managers can configure the NEAT evaluations in accordance with their own priorities and business requirements for service offerings, delivery capability, customer presence, benefits achieved, and other criteria. 

On the plus side, there has also been a number of significant wins, the most recent of which was announced yesterday, and Quindell is back on the up as we move into the final months of 2014. In fact, it was almost exactly a year ago that Quindell won a major deal which set the tone for things to come. That win was in the Canadian telematics market, and marked a first North American contract for Quindell when, in November 2013, it was awarded a five-year contract by CAA South Central Ontario, for whom it now provides its telematics technology.

Then, in February 2014, Quindell increased its share in U.K. telematics company ingenie from 43% to full ownership, making Quindell a ‘one-stop-shop’ for auto insurance, with service provision now covering:

• Full scope BPO services: aided by its acquisition of Ai solutions
• Health services: also built up through acquisition of ACH Group in January of this year
• Legal services: including personal injury services for road traffic accidents
• Analytics across the board.

The ingenie product is a telematics box, the size of a smart phone, which includes:

• A GPS unit to capture when and where the car is driven
• High frequency motion sensors which capture how the car is driven
• A SIM card which is used to transmit the data via the EE network.

It is not new technology (it has been used for many years in commercial vehicles), but telematics is the ‘analytics of the moment’ in auto insurance and since drivers remain largely price sensitive, (and telematics boxes enable cost of premiums to be more aligned to performance), they will undoubtedly become much more widely used by car drivers.

At the time of its acquisition of ingenie, Quindell said that telematics insurance systems were that the heart of its growth strategy in technology. The first part of the strategy was to launch an ingenie-based driver product in Canada, which in April 2014 almost happened when Quindell and RAC formed a JV to create ‘Connected Car Solutions’ (CCS). Services were to be delivered from July 2014 in the U.K. and Canada, and outside the age bracket of 17-25 year olds. However, in September 2014, it was announced that Quindell would be buying back the RAC’s shares in CCS, with associated restructuring cost of £3.5m to Quindell payable over 18 months. Following a sharp dip in Quindell’s share price, the warrants that the RAC had received in exchange for its part in the deal, were rendered useless – having once been worth ~£125m.

But now comes the good news: a contract win, announced yesterday, with Aviva Canada. Aviva has also had an interesting relationship with telematics. In 2005, Aviva Canada was the first Canadian insurer to introduce a telematics based auto insurance scheme, Autograph, but this was subsequently disbanded in August 2011 largely owing to cost. Likewise in 2008, Aviva U.K., through its Norwich Union subsidiary, also folded its PAYD offering due to a lack of interest. But now, with costs coming down and customers showing increasing appetite for usage based insurance (UBI) services, Aviva is taking a second stab at telematics, but this time, to some extent, plaingy catch up with its peers who have been offering PAYD and UBI services for some time.

Having re-entered the telematics market gently in mid-2012 with a simple mobile app (rather than through installation of black box technology), Aviva Canada, already a client of Quindell, will now be exclusively using Quindell’s telematics technology to support both commercial and personal LOBs (see NelsonHall Tracking Service article for further contract details).

In May this year, Quindell and Independent Broker Resources Inc. (a wholly owned subsidiary of the Independent Brokers Association of Ontario (IABO)) outlined a two pronged telematics growth strategy for the Canadian market:

• Via ingenie: expansion into the Canadian marketplace with a telematics product for 16 to 24 year olds to be distributed exclusively through member brokers of the IBAO
• A IBRI/Quindell general telematics offering that allows insurers to provide a broker-branded telematics service.

Until yesterday, Quindell had launched two pilot programs for the second option, and a further 17 NDAs had been signed with insurers across Canada. With the addition of the Aviva contract, Quindell’s telematics technology can be sold directly though the 1.7k Aviva Canada brokers.

This, coupled with the CAA win last year, puts Quindell in a strong positon to exit 2014; it also demonstrates that any potentially damaging noise from earlier in the year is not impacting Quindell’s ability to win business. At close of play yesterday, Quindell’s share price was up 9.6%.

NIIT has delivered IT services to its Lloyds of London clients for some 20-years, using its insurance specific tools:

• Subscribe: NIIT’s existing policy administration platform, a multi-currency insurance and reinsurance policy administration system
• Exact Advantage: a data capture facility for property, terrorism, credit risk, aviation and marine. The tool is used to assess and monitor risk exposure, using a mapping interface and GIS technology
• Ipf3: process automation and workflow tool
• Acumen Advantage: provides management information, encompassing underwriting, claims, reinsurance accounting and actuarial data.

Over the years, NIIT has enhanced these tools and also made acquisitions such as Room Solutions in 2006 (see separate article) in support of its insurance business.

In anticipation of new opportunities in the P&C insurance sector, stemming from a combination of factors (see below), NIIT is now launching a suite of software which combines all these tools, also a new tool.

The new product is intended to help commercial insurers deal with the challenge of operating with multiple systems: NIIT’s insurance clients, for example, typically operate with around a dozen systems, each with different regulatory and LOB capabilities. The new platform enables the effective integration of these systems by operating as an overriding core platform, while allowing clients keep the individual reporting processes of the various PAS, and the specific functionalities for different LOBs (some in the London market being particularly specialist).

The new product allows NIIT to address some of the key issues faced by insurers today, including:

• Increasing regulatory requirements
• Ongoing M&A activity: insurers continue to acquire books of business which operate on different PAS. A system that enables the assimilation of additional systems gained through acquisition is likely to be attractive; it also removes the need for training on different PAS and requires knowledge of just one system.

NIIT has between 15 and 20 clients operating on its existing Subscribe system currently and anticipates that all its clients will ultimately move onto the new platform. The first wave of client switch over is under way with two clients in PoC trials and a third in a model office. In effect, the move from Subscribe is an upgrade and the cost of switch over will be picked up by the client.

NIIT will continue to maintain Subscribe for a minimum of five years, as users migrate onto the new platform. NIIT is about to make improvements to Subscribe to ensure it is kept technically up to date - improvements will include replacing the Adelphi front-end and bringing the back-end up to a modern version of Sequel.

A major difference is that Subscribe is a post-bind system, running processes after submission and quotation, whereas, the new platform is a pre-bind and post-bind system starting at the point of initial case creation and running through to pricing.

Bringing its various insurance software tools and applications under one umbrella will help raise the profile of NIIT’s insurance solutions. The official launch of the new platform is October 1, 2014.

• A U.K. motor: Cash-worth Ltd. (manages a motor repair network), acquired for £11.5m in February. This acquisition makes Innovation one of the top three managers of vehicle repair claims in the U.K. Second to Germany, the U.K. is Innovation Group’s second largest geography for P&C BPO activity overall; however, this is largely due to its property business which makes up over 50% of total U.K. revenues. In auto insurance BPO, the U.K. is the second smallest of Innovation’s markets. This acquisition demonstrates Innovation’s commitment to the U.K. auto insurance market and suggests an increased focus on growing this line of business in 2014
• A U.K. wet perils acquisition: LAS Claims Management Ltd. acquired for £35m. Innovation has strong capabilities in the dry perils market, but that’s only a fraction of the size of wet peril insurance market. Though this acquisition is initially in support of Innovation’s U.K. property BPO market, it is hoping to enter the wet perils market in Australia next year, and then the U.S.

An even more acquisitive company is Quindell, which recently had to contend with the consequences of a ‘shorting attack’ in April. Though acquisition activity has quietened down since the spree of H1 2013 when it made six acquisitions, it does continue to be a major part of its strategy, despite it being part of the reason for its failure to list on the main LSE.

In January Quindell acquired ACH Group for £5m to enhance its personal injury and accident legal services offering, and in April it was awarded a telematics contract by the RAC which involves setting up a JV ‘Connected Car Solutions’ (CCS), owned 51% by Quindell. CCS is targeting around 4m paying subscribers in the U.K. and Canada. 

Innovation and Quindell’s acquisitions have been in support of increasing operational scale of existing P&C BPO offerings.

Elsewhere, other vendors are acquiring to gain specific expertise.

EXL and Xchanging acquire for technology and consultancy

EXL recently acquired Blue Slate Solutions, a 35-FTE strong consultancy headquartered in Albany, NY focused on healthcare payers and insurers. Blue Slate will increase EXL's onshore consulting presence in the U.S. and its domain knowledge in the health insurance sector. (See separate blog by NelsonHall Healthcare analyst, Todd Harrington: ‘EXL Acquires Blue Slate Solutions to Enhance Business Process Analytics in the Healthcare Payer Sector’)

One of the two acquisitions announced by Xchanging earlier this month is the European operations of AgencyPort, which provides software to P&C and health insurance markets, including for exposure modelling and risk analysis – two new products for Xchanging. There were three further key motivators for the acquisition:

• Growth in existing markets: supporting Xchanging’s strategy of investment in technology, IP and growth of the insurance business globally, in particular in P&C insurance
• Potential for cross-sell/up-sell opportunities between Xuber and Agencyport Europe’s client base
• Growth in new markets: notably in health insurance market. This was not a significant factor in the acquisition, but rather a complimentary one.

The second of Xchanging’s acquisitions, is U.K.-headquartered Total Objects, bought for £21m. This is also to enhance software capabilities, in this case in support of Xchanging’s Binder 360 offering, launched earlier this year BinderCloud is a managed service developed by Total Objects which enables the loading, validating and storing of bordereau data. There is also the possibility that the Xuber platform and products will be combined with the cloud-based offerings of Total Objects in future, for the development of a new product roadmap which would serve markets including:

• Retail and wholesale broking
• Outwards reinsurance
• MGA markets.

“Build rather than Buy” happening for anti-fraud capabilities

The problem of fraud in insurance is now a huge issue, with an estimated cost to the P&C industry topping $30bn a year. And some BPO service providers are developing new proprietary tools for fraud detection. Hexaware, for example, launched last month ‘iFraudEngine’ an analytics tool for the detection of fraud in the process claims lifecycle with a view to reducing the number of false claims payments to ~10%.

Expect to see more acquisition activity in the next year in EMEA

We can expect to see further acquisitive behaviour from the likes of Xchanging and EXL in support of insurance BPO. Within EMEA, the U.K. will continue to be its focus for insurance BPO, Continental Europe proving too challenging right now. Xchanging is looking to make further acquisitions in the commercial insurance space around home, auto or travel insurance. A decision, maybe even the acquisition itself, is likely by the end of the year.

Likewise, EXL’s insurance BPO practice is also high on the list of the company’s investment priorities in EMEA – also around P&C. At EXL, the target insurance segment is auto BPO, again largely coming out of the U.K. At the moment EXL does not currently have a delivery presence for auto insurance BPO in Europe, but part of its European strategy is to acquire a capability, potentially a multi-industry outfit, but certainly with an insurance facility, in support of the P&C BPO business; auto BPO will be at the forefront of this.

(Coincidentally, NelsonHall will be shortly publishing a NEAT Market Assessment and on P&C BPO in the automotive sector. For details, contact [email protected])

Blue Slate’s “Data Unleased” value proposition is based on the benefits of leveraging enterprise data that may be locked in disparate applications and databases across an organization.

In the healthcare payer space, trouble often arises when information needs to be aggregated and synthesized from different databases to assemble reports on claims and reimbursement trends, etc. Many databases have been developed for insurance firms with the intent of protecting sensitive data related to beneficiaries and healthcare provider care while analyzing outcomes and trends.  Enabling reasonable data protection is of course necessary, but this frequently impedes the informational exchanges that can enable improvements in patient care.  Furthermore, data warehouses that enable informational exchange are not valuable until the warehouse has been populated with report outputs properly defined and mapped.

Blue Slate’s approach focuses on building databases that address frequent business needs first, and the reports and informational outputs that serve those needs. Warehouses are then built around the prioritized set of business needs, delivering utility from inception and with iterative testing embedded in the development process. Blue Slate also has experience in healthcare provider sales and service, as well as strategic planning around the informational services that its databases deliver.

So what does this acquisition mean for EXL?  EXL gains a specialist onshore staff that has domain experience of analytics in the U.S. health insurance sector and will be able to leverage Blue Slate’s consulting experience, contacts and skillsets. In particular, Blue Slate has established relationships with nearly a dozen Blue Cross & Blue Shield organizations. The addition of Blue Slate enhances EXL's corporate positioning on its deep analytics capabilities.

Over the next few months, EXL will be scoping the demand from its clients that can be serviced by Blue Slate’s capabilities. This may be followed by a measured expansion of Blue Slate business from EXL’s resource base.  Expect also to see Blue Slate develop additional business outside of healthcare, supported by EXL.

Client engagements with Virtual Operations typically start with classic consultancy around RPA technologies; this typically involves making a business case for RPA.  In some cases, RPA processes are run for the client, at least initially, before the client takes over.  Blue Prism is frequently engaged as a software and delivery partner, though Virtual Operations is vendor neutral. In the  last two years, Virtual Operations has conducted 24 implementations. Some of these have been for large firms, with a subset in the BPO market.  Of 24 installations, to date, the client base is split approximately in thirds across healthcare (with an RCM and claims processing focus), financial services and F&A/HRO.

For BPO providers, value can be recognized very quickly given the speed at which virtual FTEs (robots) can be configured and implemented. For example, after a recent, small (~$20k) proof of concept engagement, a BPO client signed on to replace ~800 of its 1,000 FTEs in its order management shared services centers with ~150 virtual FTEs.  Immediate and meaningful business benefit to the client was realized.  The implementation touched approximately 18 different applications across 9 service centers and progressed from concept to live implementation in about 200 days.  Gains in productivity have averaged 3-5x across applications with low (under 5%) error rates.  For the client, the massive gain in productivity in the relatively short time and small sum of capital invested stood in meaningful contrast to longer and more expensive and cumbersome deployment models on the order of months or quarters.

In the healthcare space, Virtual Operations has been engaged by healthcare providers for records creation and revenue cycle management (RCM) processes and by insurers for claims pricing and prior authorizations processes. One healthcare provider recently contracted Virtual Operations to implement an improved records system, as several new healthcare records needed to be created manually whenever an intervention was provisioned.  Creating a patient record was thus a very laborious process that required many touch points across the employee base. Virtual Operations found that many elements of the process could be automated to improve the efficiency of healthcare delivery upon admission and also provide more clarity around payer capacity. If, for example, it could be identified by the record system that a patient needed to provide a larger co-pay for services upon admission, it benefits the provider’s collections process to notify the patient that payment was due up front rather than chasing the collection after patient discharge.

In RCM, some HIPAA-related regulations encourage RPA, as they require that operations be retained onshore when such work might have previously been pushed offshore. While it may have previously been difficult to justify technology investments in RPA, there is now encouragement and pressure to reduce administration costs, and, in many cases, to do so with onshore resources, which can encourage the use of robotics.

In addition to brief implementation periods and jumps in productivity, RPA also enables businesses to achieve high utilization rates by using robotic assets, as the assets are not necessarily relegated to a single process.  In healthcare, for example, batch records creation and prior authorizations can be completed overnight to enable efficient admission and treatment upon patient arrivals in the morning.  In this way, employing a platform approach to automation that is flexible to addressing the client’s specific needs is more valuable than simply reducing costs through FTE reduction.

Also relevant to healthcare is that RPA does not require process or system re-engineering to be effective.  Several legacy systems, especially in healthcare, are running processes that are not optimized for efficiency but it is necessary to retain the structure of those processes and systems for regulatory compliance or other reasons.  Even if the process itself cannot be changed, RPA can be helpful in simply automating the process and reducing errors significantly, thereby improving overall performance.  The improvements in data accuracy and time required to perform various tasks can be well worth the time and expense required for implementation.

Virtual Operations is seeing rising interest in RPA as a platform.  One of the questions that Virtual Operations is frequently asked is “What can it do?”  The reality, according to founder Dan Hudson, is that as long as the data in question is structured and the process to be executed is rules-based and repeatable, RPA can be configured for that specific application. 

Healthcare BPO is one of the areas in BPO where we see strong potential for RPA to serve as a platform tool for its flexibility, scalability and the jumps in productivity that it enables, all at meaningfully low error rates.

It’s in this environment that Pharmalink developed, attracting competition from remarkably only a handful of firms (~4-5 direct competitors in the U.S. and Europe). The barriers to entry in pharmaceutical regulatory consulting are quite high, and Pharmalink has managed to protect its backside in the space quite well. During this time it was also observed within Genpact that its pharmaceutical clients would be willing to increase both the volume of outsourcing contracts and their overall budgets for outsourcing to regulatory specialists were they able to find exceptionally useful services offered at reasonable prices. Once the decision to target an acquisition with Pharmalink’s capabilities was made, there were only a few viable options unless Genpact was interested in acquiring this capability through the acquisition of a much-larger contract research organization (CRO), which it was not.

Genpact has already established relationships with many of the big pharma players that have found value in the niche expertise offered by Pharmalink. In supplement to Genpact’s core services, Pharmalink will employ its base of regulatory experts to maintain client compliance with annual filings and other measures required to maintain/grow pharmaceutical sales in existing markets and introduce products in new ones. Genpact is therefore in a healthy position to leverage this acquisition into a bundle of complimentary services for life-science clients that goes beyond the somewhat commoditized services of ITO and F&A BPO toward offerings that address some of the central commercial activities and concerns within big pharma. That is, with impending patent expirations, market entry and competition from low-priced generics and other commercial challenges, the Genpact-Pharmalink combination goes a long way toward two ends: (1) helping to contain costs through BPO services, and (2) minimizing profit-erosion (and perhaps even growing sales) through regulatory consulting.

Even with Genpact’s acquisition here, there is still considerable room for the growth of small firms in the regulatory consulting space. Still, for big pharma it should be of considerable comfort and benefit to outsource some of these regulatory activities directly to a familiar BPO major such as Genpact. It was wise for Genpact to execute this acquisition relatively early in the development of the regulatory consulting space, as it can now offer an important supplement to the core BPO and analytics services that it provides its life sciences clients.

Services within the scope of the offering include:

• Contract remediation
• Document review
• Consent order fulfillment
• Corporate compliance research.

MphasiS will be bringing the technology and process elements to the table, while Mindcrest will be providing the legal expertise.

This comes in an environment of increasing regulatory pressures for the BFSI sector, with organizations needing to implement and maintain stringent processes to reduce the level of risk, especially that of non-compliance.  For example, in the insurance sector, it was confirmed last month that Solvency II (the harmonization of EU insurance regulation) is now set to come into effect on January 1, 2016 – after the date has been pushed back on several occasions. In the last few years insurance companies have had to re-evaluate their regulatory framework under the three pillars of Solvency II:

• Their quantitative requirements for capital held
• Governance & risk management of insurers
• Transparency.

The risk management processes they need to implement and maintain include some activities that are provided by LPO players, paving the way for relationships between pure play LPOs and BPO provider who have an industry-specific focus in BFSI sectors. The need for compliance is related to regulatory changes, and LPOs are able to provide their clients with clarity over these constraints and ensure they operate within them.

LPO has been growing at exceptional rates since its breakthrough as a BPO offering in the late noughties - with more set to come as it is increasingly accepted within the legal industry. Within the LPO market, the ‘Legal Risk Management’ segment, driven by the demand for compliance and due diligence services, in one form or another, is growing at a rate  of over 20% CAAGR through 2018, making it the fastest growing segment, ahead of ‘Legal Cost Reduction’ and ‘Contract Centralization and Standardization’ (see NelsonHall LPO Market Analysis – to be published next week).

So, how are LPOs rising to the challenge?

By increasing client’s visibility into their contractual environment through use of obligations and opportunities tracking, contract remediation, regulatory mapping via legal research services and design of compliance programmes, to name a few.

A recent example of this is the contract win awarded at the start of the month to QuisLex by a manufacturing conglomerate to implement an anti-corruption and compliance program. QuisLex will be providing third-party due diligence to address ongoing FCPA obligations. It will do this by reviewing existing documents related to ~15k third parties.

Until now, LPOs have largely partnered with law firms, but this is likely to expand further and we can expect to see more partnerships between LPOs and other types of organization, like MphasiS; the partnership with Mindcrest is proof that MphasiS has followed through with its strategy to acquire or partner to increase the provision of niche services and capabilities.  MphasiS is not the only vendor with this on its agenda.. ! This example comes a year after the partnership announcement between Wipro and e-discovery provider DTI, for legal and compliance support services.

If we assume that the Mindcrest/MphasiS engagement is suitably representative (and we do), then Life Sciences will be the next sector to be heavily targeted, after Financial Services – which is currently the main focus of this offering. NelsonHall predicts that Oil & Gas and Energy & Natural Resources will be the next sectors to follow suit – in the LPO world, these industries are already the next big thing on the agenda with the likes of Clutch Group developing an Energy & Natural Resources-specific practice. The focus will then spread beyond highly regulated industries and move into areas such as manufacturing and technology.

To that end, it is safe to say that the provision of compliance services will soon no longer be considered a competitive advantage, but a critical success factor for survival.

• Contract remediation
• Document review
• Consent order fulfillment
• Corporate compliance research.

MphasiS will be bringing the technology and process elements to the table, while Mindcrest will be providing the legal expertise.

This comes in an environment of increasing regulatory pressures for the BFSI sector, with organizations needing to implement and maintain stringent processes to reduce the level of risk, especially that of non-compliance.  For example, in the insurance sector, it was confirmed last month that Solvency II (the harmonization of EU insurance regulation) is now set to come into effect on January 1, 2016 – after the date has been pushed back on several occasions. In the last few years insurance companies have had to re-evaluate their regulatory framework under the three pillars of Solvency II:

• Their quantitative requirements for capital held
• Governance & risk management of insurers
• Transparency.

The risk management processes they need to implement and maintain include some activities that are provided by LPO players, paving the way for relationships between pure play LPOs and BPO provider who have an industry-specific focus in BFSI sectors. The need for compliance is related to regulatory changes, and LPOs are able to provide their clients with clarity over these constraints and ensure they operate within them. 

LPO has been growing at exceptional rates since its breakthrough as a BPO offering in the late noughties - with more set to come as it is increasingly accepted within the legal industry. Within the LPO market, the ‘Legal Risk Management’ segment, driven by the demand for compliance and due diligence services, in one form or another, is growing at a rate  of over 20% CAAGR through 2018, making it the fastest growing segment, ahead of ‘Legal Cost Reduction’ and ‘Contract Centralization and Standardization’ (see NelsonHall LPO Market Analysis – to be published next week).

So, how are LPOs rising to the challenge?

By increasing client’s visibility into their contractual environment through use of obligations and opportunities tracking, contract remediation, regulatory mapping via legal research services and design of compliance programmes, to name a few.

A recent example of this is the contract win awarded at the start of the month to QuisLex by a manufacturing conglomerate to implement an anti-corruption and compliance program. QuisLex will be providing third-party due diligence to address ongoing FCPA obligations. It will do this by reviewing existing documents related to ~15k third parties.

Until now, LPOs have largely partnered with law firms, but this is likely to expand further and we can expect to see more partnerships between LPOs and other types of organization, like MphasiS; the partnership with Mindcrest is proof that MphasiS has followed through with its strategy to acquire or partner to increase the provision of niche services and capabilities.  MphasiS is not the only vendor with this on its agenda.. ! This example comes a year after the partnership announcement between Wipro and e-discovery provider DTI, for legal and compliance support services. 

If we assume that the Mindcrest/MphasiS engagement is suitably representative (and we do), then Life Sciences will be the next sector to be heavily targeted, after Financial Services – which is currently the main focus of this offering. NelsonHall predicts that Oil & Gas and Energy & Natural Resources will be the next sectors to follow suit – in the LPO world, these industries are already the next big thing on the agenda with the likes of Clutch Group developing an Energy & Natural Resources-specific practice. The focus will then spread beyond highly regulated industries and move into areas such as manufacturing and technology.

To that end, it is safe to say that the provision of compliance services will soon no longer be considered a competitive advantage, but a critical success factor for survival.

Initially the partners will work together to improve quality of community healthcare in Suffolk, with Bromley Healthcare acting in an advisory capacity and supporting clinical leaders. In the long term, they intend to join forces to bid for a range of opportunities in community services and integrated care across the UK.

This move is part of Serco's drive to enhance the quality of its healthcare services in Suffolk after the service came underfire when  NHS commissioners, reportedly, found it missing targets. Improving the quality of services is key to Serco's ambitions to grow its healthcare business. Major recent contract wins have included the troubled £140m Suffolk Community Health contract, won in 2012 and the £120m Anglia Support Partnership, awarded in 2011.