Everest Group’s PEAK Matrix™ for Payer ITO Service … for healthcare payers and service ......

Copyright © 2014 Everest Global, Inc. This document has been licensed for exclusive use and distribution by Wipro

Focus on Wipro December 2014

Everest Group’s PEAK Matrix™ for Payer ITO Service Providers

EGR-2014-12-E-1302

2 Copyright © 2014, Everest Global, Inc. EGR-2014-12-E-1302

Introduction and scope

Everest Group recently released its report “IT Outsourcing in Payer Industry – Service Provider Landscape with PEAK Matrix™ Assessment 2014: Rise of the Challengers”. This report analyzes the changing dynamics of the payer ITO landscape and assesses service providers across several key dimensions. As a part of this report, Everest Group analyzed 18 leading service providers on the Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix specific for payer ITO into Leaders, Major Contenders, and Emerging Players. The PEAK Matrix is a composite framework that provides an objective, data-driven, and comparative assessment of payer ITO service providers based on their absolute market success and delivery capability. Based on the analysis, Wipro emerged as a Major Contender. This document focuses on Wipro’s payer ITO experience and capabilities. It includes: Wipro’s position on the payer ITO PEAK Matrix Detailed payer ITO profile of Wipro

Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each buyer. Buyers will have to consider their unique situation and requirements, and match them against service provider capability for an ideal fit.

https://research.everestgrp.com/Product/EGR-2014-12-R-1263/IT-Outsourcing-in-Payer-Industry-Service-Provider-Landscape-w







Background of the research The healthcare industry is witnessing an unprecedented churn and transformation, leading to a surge in the adoption of IT and business process outsourcing. Driven by regulatory reforms, tenets of consumerization, market consolidation, and emergence of the next-generation digital avenues, outsourcing has accelerated in this 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 the demand for relevant research and market intelligence on demand and supply trends 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 healthcare payer 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 payer 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 Implications for healthcare payers and service providers Scope of this report: Industry: Healthcare payers (public and private health plans) Services: Large (TCV > US$25 million), multi-year (over three years), and annuity-based IT outsourcing Geography: Global (though with a skew towards the U.S. payer market, given dominant market activity) Sourcing model: Third-party ITO transactions; excludes shared services or Global In-house Centers (GICs)

Payer ITO service provider landscape: Background and scope of the research


Wipro is positioned as a Major Contender on Everest Group’s payer ITO PEAK Matrix

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for large payer ITO relationships1

Leaders Major Contenders Emerging Players Star Performers

1 PEAK Matrix specific to large (>US$25 million TCV), multi-year (>3 years) application outsourcing relationships within the payer sector (public and private health plans); the evaluation this year (2014) is depended more on Application Outsourcing(AO) as a majority of large deals have it in scope

Note: Assessment for Accenture, Fujitsu, HP, IBM, and Syntel excludes service provider inputs and is based on Everest Group’s proprietary Transaction Intelligence (TI) database, service provider public disclosures, and Everest Group’s interactions with payers

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

25th

per

cent

ile

25th percentile

Leaders

Major Contenders

Emerging Players

Fujitsu Virtusa

Hexaware Unisys

Wipro

Dell Services

TCS

Cognizant

HP ES

CGI

HCL Technologies

Syntel

L&T Infotech Tech Mahindra

Infosys

IGATE

Accenture IBM

75th

per

cent

ile


Key financial parameters2

Revenue figures in US$ million

Company description: Wipro Ltd. is a global IT services company providing a range of IT application and infrastructure services, product engineering, technology integration, consulting solutions, and business process services. The healthcare & life sciences business unit offers an integrated portfolio of offerings for a connected healthcare ecosystem. The array of industry-focused solutions span patient access, HCP engagement, drug adherence, clinical trials platform, analytics-based transformation, BPO, and marketing support for mature brands Headquarters: Bangalore, India Website: www.wipro.com

Services offered for the healthcare vertical: IT services across the healthcare payer, provider, and life sciences segments. Services for the payer segment include legacy modernization, compliance (ICD10-5010), care management, enterprise BI and analytics, sales and consumer self-service portals, CRM, enterprise testing, healthcare infrastructure management and hosting, and BPO solutions

Major healthcare clients: AstraZeneca, Novartis, Pfizer, Johnson & Johnson, Eli Lilly, Baxter, Takeda, and Covidien

Scale of healthcare subverticals Payer Life sciences Provider

>US$500 million US$100-500 million <US$100 million

Wipro | Payer ITO profile (page 1 of 5) Corporate and healthcare overview

1 FY ends on March 31 2 Healthcare revenue comprises IO and AO services (excludes revenue from BPO, Wipro Infotech, and products) Source: Everest Group (2014)

Service mix 2014; US$ million

Geographical mix 2014; US$ million 5,329 5,567 6,109

592 651 509

FY 2012 FY 2013 FY 2014

20.9% 20.7% 22.6%

5,921 6,218 6,618

Revenue2 from healthcare Revenue1 from other verticals Operating margin

50%

29%

12% 9%

32%

25% 20%

9% 8%

7%

100% = 6,618 100% = 6,618

Americas Europe

BPO

Business application services

ADM

Product engineering

APAC and other

emerging markets

India & Middle East

Global infrastructure services

Analytics & information mgmt.

http://www.wipro.com/


Headline assessment Wipro is a Major Contender in the payer ITO space, driving its successes in a balanced approach of inorganic as well organic growth in solutions, offerings, and domain expertise

Scope Primarily serves private health plans based in the United States Active across all main ITO areas, including ADM, system integration, IT

consulting, datacenter services, mobility, clinical informatics, network services, and infrastructure modernization

Delivery footprint Over 1,000 FTEs dedicated to healthcare services in the payer ITO

segment More than 80% of the payer resources are located in low-cost, offshore

locations, with relatively smaller delivery presence in the United States Leveraging nearshore presence through FTE resources in Missouri and

Ohio

Domain investments Other solution areas include Medicare platforms, Revenue 360, Appeals

and Grievance (A&G) 360, Encounter Data Processing System (EDPS), Medicare Advantage Platform, ICD-10 Compliance and Assurance, and Mobile Health Solutions

Alliances with Opera, IBM (Curam), Kony, and Edifecs

Scale Over 60% of the engagements are large-sized (over US$25 million in

TCV) More than 1,000 domain-focused FTEs engaged in services in the payer

ITO space

Wipro | Payer ITO profile (page 2 of 7) Payer ITO capability assessment and market success

Transaction success Witnessed growth (~10%) in revenue between 2012-2013, driven by

focused investments in the payer space Engagements span the applications and infrastructure services space

1 Transaction success for large-sized deals; assessment relative across service providers Source: Everest Group (2014)

Everest Group PEAK Matrix for payer ITO

North America EMEA Latin America APAC

Geographic scope Payer subsegments

Success dashboard1 High Medium Low

Public health plans Private health plans

High

Low Low High

Mar

ket s

ucce

ss

(Tra

nsac

tion

activ

ity)


75th percentile

25th

per

cent

ile

25th percentile

Leaders

Major Contenders

Emerging Players

Fujitsu Virtusa

Hexaware

Unisys

Wipro

Dell Services

TCS

Cognizant

HP ES

CGI

HCL Technologies

Syntel

L&T Infotech Tech Mahindra

Infosys

IGATE

Accenture IBM

75th

per

cent

ile


Proprietary solutions (representative list)

Line of business Solutions

Payer Healthcare Analytics Platform (Opera): Predictive analytics platform to support various healthcare solutions State Integrated Eligibility Solution: Enterprise integrated eligibility solution for public health and Medicaid

programs Healthcare IT and clinical service desk: End-to-end infrastructure support and service desk management

including clinical, operational and financial applications ICD-10 compliance: Comprehensive solution across compliance lifecycle including assessment,

remediation, test data management, end-to-end testing, EDI gateway testing, partner trading testing, and reusable and automated test scripts

Wipro | Payer ITO profile (page 3 of 5) ITO domain investments

IP investment

Investment of over US$5 million to develop and enhance Medicare platform suite with ACA, duals capability, and other healthcare reforms


Key alliances (representative list)

Alliance partner Purpose of alliance

Edifecs Taking Edifecs HIX offering for GTM initiatives and hosting ICD-10 migration tool. Ongoing joint field engagement GTM initiatives include joint selling and lead generation

Curam CoE along with IBM Focused on providing enrolment and eligibility platform to help US states implement various healthcare reforms (e.g. HIX). Includes joint selling support from: IBM hardware, software, services and reselling and services support from Avnet (largest IBM Value Added Distributor) (confirmed in December 2013)

Joint mobility CoE with Kony

Joint investment in co-branded (Wipro/Kony) mobile healthcare payer application

Opera Solutions Acquired a minority stake in Opera Solutions for US$30 million in May 2013 to enhance analytics capabilities


1 Publicly-announced payer ITO transactions during 2010-2014 Source: Everest Group (2014)

Wipro | Payer ITO profile (page 4 of 5) Payer ITO transactions activity

NOT EXHAUSTIVE

Recent transaction activity1

Buyer’s name Announcement date

TCV estimate (US$ million)

Duration (years) AO/IO/Both Contract details and services

No publicly-declared payer transaction activity


India

Wipro | Payer ITO profile (page 5 of 5) Key ITO delivery locations

Confirmed location for payer ITO 500-1,000 ITO FTEs

>5,000 ITO FTEs 100-500 ITO FTEs

1,000-5,000 ITO FTEs <100 ITO FTEs

NOT EXHAUSTIVE

Switzerland

Canada

U.S.



Appendix


Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix classifies service providers into Leaders, Major Contenders, and Emerging Players

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for IT Outsourcing

High

Low Low High

Mar

ket s

ucce

ss

(Tra

nsac

tion

activ

ity)

75th percentile

Top quartile performance across market success and capability

2nd or 3rd quartile performance across market success and capability

4th quartile performance across market success and capability

Emerging Players

Leaders

Major Contenders

75th

per

cent

ile

25th percentile

25th

per

cent

ile


Everest Group’s PEAK Matrix is a composite index of a range of distinct metrics related to a service provider’s scale, scope, technology/domain investments, delivery footprint, and resultant market success in the context of a given outsourcing function


Service providers are positioned on the PEAK Matrix based on evaluation across two key dimensions

Active ACV of relevant deals

Relevant deals

Scale

Revenue

FTEs

Scope

Lines of business served

ITO subfunctions

Domain investments

Proprietary solutions

Investments in M&As and certifications

Delivery footprint

Delivery mix

Delivery regions covered

Geographies served

Delivery capability

Mar

ket s

ucce

ss

Everest Group PEAK Matrix

Emerging Players

Leaders

Major Contenders


Does the PEAK Matrix assessment incorporate any subjective criteria? The Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service

provider RFIs and the Everest Group’s proprietary databases containing providers’ deals and operational capability information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction, and provider briefings

Is being a “Major Contender” or “Emerging Player” on the PEAK Matrix an unfavorable outcome? No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical.

There are a number of providers from the broader universe that are assessed and do not make it to the PEAK Matrix at all. Therefore, being represented on the PEAK Matrix is in itself a favorable recognition

What other aspects of the PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK Matrix position”? The PEAK Matrix position is only one aspect of the Everest Group’s overall assessment. In addition to assigning a

“Leader”, “Major Contender” or “Emerging Player” title, Everest Group highlights the distinctive capabilities and unique attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and associated commentary is helpful to the buyers in selecting particular providers for their specific requirements. It also helps providers showcase their strengths in specific areas

What are the incentives for buyers and providers to participate / provide input to the PEAK Matrix research? Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment Participation incentives for providers include adequate representation and recognition of their capabilities/success in

the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of PEAK Matrix providers” profiles

FAQs (page 1 of 2)


What is the process for a service provider to leverage their PEAK Matrix positioning status ? Providers can use their PEAK Matrix positioning in multiple ways including:

– Issue a press release declaring their positioning/rating – Customized PEAK Matrix profile for circulation (with clients, prospects, etc.) – Quotes from the Everest Group’s analysts could be disseminated to the media – Leverage the PEAK Matrix branding across communications (e-mail signatures, marketing brochures, credential

packs, client presentations, etc.) The provider must obtain the requisite licensing and distribution rights for the above activities through an

agreement with the designated PoC at Everest Group

FAQs (page 2 of 2)

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Everest Group’s PEAK Matrix™ for Payer ITO Service … for healthcare payers and service ......

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