Three years after Wipro decided to restructure its healthcare and life sciences (HLS) business to target the lucrative $3-trillion US healthcare market, it is all set to hit the $1-billion milestone in FY 2015-16.
The company is aiming to be among the top two players in the HLS space, which is currently dominated by Cognizant Technologies’ $2.5-billion healthcare practice.
Renewed focusWipro renewed its focus on the HLS vertical three years ago, shortly after Azim Premji, Chairman of Wipro, pointed out that one of the reasons for its poor financial performance in the first two quarters of FY 2012 was its smaller exposure to the turbo-charged healthcare vertical, compared to its peers. The efforts seem to have paid off. From a $450-million business contributing 10 per cent to the company’s revenue in 2011, the healthcare and life sciences business has grown to $750 million and is expected to hit the $1-billion milestone in mid-2015.
To make the $1-billion milestone a reality, Sangita Singh, CEO, Healthcare and Life sciences & Services, relocated to New York in January this year, resulting in the business becoming the major growth driver for Wipro in the second quarter ended September 30, 2014.
HLS contributed 11.2 per cent of Wipro’s IT services revenue in the quarter and achieved 20.1 per cent YoY growth.
“My move enabled faster decision making; got me closer to my team, and clients were happier as I was available in their time-zone,” Singh told BusinessLine .
Attributing the fast track growth of the HLS business to Wipro’s consulting-led approach which is backed by 200 domain experts, Singh said the company is pursuing a three-pronged strategy to hit $1-billion revenue by mid-2015 – Winning new deals and mining of existing accounts, investing in patient-centric solutions and building competencies inorganically through acquisitions.
The top three areas that Wipro will focus on to enhance growth in HLS are the US, Europe (UK) and India markets. The company’s HLS business is split into three units – Payer & Provider (Insurance companies & Hospitals/clinics), Life Sciences, Medical Devices; and the first two units contribute 45 per cent revenue each to the business, with the rest coming from Medical Devices.
OpportunitiesStating that the company is seeing a lot of traction in the biotechnology space in the areas of gene sequencing, data analytics and cure for rare diseases, Singh said consolidation in the life sciences space with M&As is opening up a huge opportunity for Wipro to work with the merged entities as consultants for IT systems and execution.
The Affordable Care Act in the US that aims to improve quality of patient care along with the transition of US healthcare organisations from ICD-9 code sets to ICD-10 by October 2015 are other opportunities that Wipro is tapping.
Acquisition planOn acquisitions, Singh said, the plan is to acquire pharma firms that offer services and solutions in digital marketing, compliance and R&D and firms that are strong in employee health /medical records as well as revenue cycle management.
“We have a strategy for growth in place; a 7,000-strong HLS team to support it; and are continuing to make investments and build competencies in the business. We have the opportunity to be among the top two players in HLS.
“From here on, it is all about how we execute to get to our target,” said Singh.