Anurag Jain, who founded Vision Healthsource and subsequently architected Perot Systems' acquisition of the same, now heads the Business Process Solutions (BPS) Group, where he is responsible for its strategy, management, sales, operations and service delivery. In an e-mail interview with India Syndicate, he spoke to Indhu Radhakrishnan and Balaji Narasimhan on the evolution of the BPO industry, his company's areas of operations, and other associated areas. Excerpts:

1. Perot Systems Business Process Solutions, formerly Vision Healthsource, has been in the business since 1997, and so your company would have seen the evolution of the BPO industry. Can you tell us some of the major industry changes that your company has witnessed?

I founded two companies Brigade and Vision Healthsource in 1997 and have seen the industry change very rapidly. I believe we are now entering the third generation of the BPO wave. The first Generation was what I call "Prove it to me"- This phase was marked with scepticism and the key question on the client's mind was "Can this be done?"

Thankfully, there were more prophets than critics. I needed one client to demonstrate that this was indeed doable despite challenges with policy structure, availability of reliable connectivity etc. By God's grace, I was able to convince my first client (he still does business with me and has grown significantly as well) to buy our services. Slowly, the offshore model was getting wider acceptance. There was a buzz of activity and interesting experiments were being conducted, newer ways of doing business were being invented.

In the second phase, the focus was on scaling the operations (the "scale it for me" challenge). The policy structure and regulatory regime was becoming increasingly friendlier to entrepreneurs in the BPO space. Interesting pricing models emerged during this time. Transaction based pricing evolved from more common labour replacement driven pricing, which shows an increasing focus on deriving higher value from outsourced deals.

It was during this phase I sold my company Vision Healthsource to Perot Systems, with the thought of gearing up for the next generation of BPO. Perot gave me access to a wider market and also allowed me to create an end-to-end business process services delivery model, leveraging on their global centres and IT & consulting practices.

The NextGen BPO or the model that is now being pursued by trendsetters and leaders, like Perot Systems, is an integrated IT, BPO and consulting model. We believe customers would now not outsource a single component of a process but their entire business process. A trend I describes as the "manage my business for me" phase. The focus would now shift from a transaction or fee for service model to competitive cost benchmarks for the entire process delivery. Customers are truly looking to create competitive advantage through outsourcing.

2. Having offered your services to the healthcare industry for over eight years, you are possibly in the best position to tell us about some of the key features that are unique to this sector. What are they?

Healthcare BPO is probably one of the most complicated BPO services domains. There are inefficiencies in the healthcare chain, which has given rise to complex set of rules. Rules that vary by the speciality (cardiology/radiology and so on), by the state where the service was rendered (Over 50 states in the US), and health plan specific rules.

A normal agent on the BPO floor has to learn and apply over 1,200 such rules at any given time. What makes it even more complex is the very rapidly changing healthcare legislative environment. Another complexity in the whole equation is that healthcare industry has been a laggard in adoption of new technologies. Hence we have a multitude of systems that really do not talk to each other or are not efficient enough.

3. Information on patients is important, and should be kept strictly confidential. What sort of systems do you have in place to make this possible? Has this been a major issue of concern for your clients?

Information security is a key focus area for us. We are perhaps the only Healthcare BPO company with a strong focus on compliance. I am hopeful of announcing a BS-7799 standards implementation success in April for my Chennai centres. Almost all the good things around security have been implemented. Take controlled accesses for example-we have a strong information security and compliance culture. In fact, we offer this as a service to our clients.

4. All companies in India seem to be solely concentrating on the lowering of costs due to outsourcing, with quality thrown in as an extra bonus. Is this trend set to change, or will lowering costs remain the sole USP of outsourcing?

As mentioned in the previous question, now we are moving to a model where the cost focus is no longer material, what the customers today need is an ability to manage the entire business process for them. Now, when you take ownership of the entire business process, you would be able to price it only in terms of value and base this price against industry benchmarks for the process. In quite a few industries, finance and accounting is being pegged at less than 1% of total revenues. These are the kind of relationships that we would see in the future, relationships that create value. Clearly, value delivered as against pure cost focus is going to drive outsourcing deals.

5. Your site mentions that call centre costs in India are 52% lower, while software development costs are 61% lower. How long will these benefits last?

Cost benefits are still there but we are also seeing a wage-inflation in India, which creates pricing pressure. Overall, the benefits seem to be lowering. While there is still potential to reduce costs by moving further to Tier II towns and cities, I think that, in the long term, we will need to be able to offer end-to-end solutions to the client to retain the edge against other competing global destinations.

6. You have managed to get a firm foothold in the healthcare domain. Are you planning on diversification in other areas?

When I sold my company Vision Healthsource to Perot Systems, we used to operate in a niche area, namely medical billing for doctors. We took the tool sets and best practices of our experience and successfully launched new services lines by servicing healthcare insurance companies in the areas of claims processing and adjudication. Our next stop was financial services and finance and accounting. We have seen outstanding successes in these two domains as well. We would like to grow these capabilities across industry verticals.

Business Process Solutions is a horizontal at Perot Systems. We believe that we have competencies in four core areas-Mailroom and Imaging, Transaction services-Data Entry, Transaction processing-Rules based processing, and Contact Centres. We have the ability to wrap these services with our Enterprise systems and tools that can leave a marked impact on the customer's bottom line. These four core capabilities, combined with our enterprise solutions capability, form the core of BPO delivery model across the globe.

7. Thanks to the general backlash against outsourcing, most companies are reluctant to openly admit that they outsource their work. Will this be the general trend in the days to come, or will we see a day when outsourcing will no longer be something to keep confidential?

Outsourcing is not a new business strategy. Companies in the manufacturing space have been outsourcing since the 60s. I think outsourcing of processes is increasingly viewed as a strategic tool and organizations are using it effectively.

8. Work quality being an important consideration for your clients, could you briefly explain how Perot Systems ensures that stringent client parameters are met?

Delivering superior quality is at the core of all our operations planning. The key to delivering great quality is to have a very accurate understanding of customer requirements and a quality methodology that is built on a solid platform of metrics. These metrics should be consistently measured, analysed for patterns that help you identify the root causes of the issues. This learning helps us identify the focus areas for our training and continuous improvement initiatives.

Having laid this framework, it is important to create a shared understanding of quality, which involves rigorous documentation, regular communication and usage of technology tools to measure, monitor and share data. We achieved this through sophisticated workflow and quality analytics tool called VIMS, which we built from scratch.

9. Many in the BPO industry are of the opinion that Knowledge Process Outsourcing (KPO) is set to become the new mantra. Since Vision Healthsource is heavily into knowledge management, could you share your thoughts on this one with us?

As the industry matured, increasingly complex services began to get outsourced. Perot Systems Business Process Solutions has created a solid foundation of knowledge management tools and workflow technologies to break any process into granular details and manage it. The founding premise of any knowledge management application is to be able to provide the right information to the right people at the right time. And if you were able to analyse the knowledge parts, you would be able to apply it effectively as well.

We have move up the value chain significantly and are today offering complex finance and accounting, adjudication services etc. these processes are highly complex and require a lot of depth.