As the Managing Director for Perot Systems’ Business Process Solutions (BPS) operations, Vardhman Jain is responsible for the global BPO delivery, which currently spans more than 75 clients in healthcare, financial services and finance & accounting domains. He has overall responsibility for the business and financial performance of BPS operations in the India-based centers. He also plays a key role in building and managing these centers’ global technology infrastructure, managing client relationships, and sourcing the right talent. He brings a wealth of experience in the areas of corporate development, strategic planning, sales & marketing management, executive leadership and managing India-based BPO operations.

Vardhman has played a key role in building scalability into the organization’s operations to facilitate a quick ramp-up. His zeal for automation has led to the development of a completely automated business process systems suite, including knowledge management, workflow management and other enabling technologies for employee relationship management. He has led BPS transformation into the leader in the healthcare BPO space by using the right mix of people, process, technology and infrastructure.

Vardhman holds a B.Sc. in Computer Science from the University of Texas at Austin and also holds a B.Sc. in Statistics from Loyola College, India. After completing his education, he worked with Dazel Software (a Hewlett Packard software company) in Austin as a quality assurance engineer. He returned to India in 1999 to head the BPS operations, where he has overseen the growth of the company from under 10 employees in 1999 to over 4,000 worldwide today.

 ValueNotes: Will the current economic condition be conducive to outsourcing?
Vardhman: Absolutely. Reminds me of the Charles Dickens quote, “These are the best of times, these are the worst of times.” In the services sector, offshoring is an important strategic tool. The savings associated with offshoring are huge and as companies are under extraordinary pressure to improve margins, they have to offshore. Evidence also suggests that for the developed world, inhibiting offshore only reduces long-term incomes.

ValueNotes: How has the current economic condition affected the verticals that your company services? Is there a significant increase in cost pressures or renegotiation in prices?
Vardhman: Within healthcare, which represents 46% of our revenue, we continue to see sales activity broaden in terms of the provider organizations served and the services delivered. Where our provider revenue historically consisted mostly of large hospital clients, we have been able to build upon our market leadership position to take our solutions and business process services to developing areas of this market. Today, one half of our provider revenue comes from these developing areas, including IT outsourcing and clinical solutions for small to midsize hospitals, revenue cycle management for hospitals and large physician groups, providers in the international community, and the federal government.

We have not seen significant pressure to renegotiate contract prices as there has been no price increase in most of our contracts on account of continuous process improvement. In fact, we are seeing an equal amount of demand from both our existing and new customers.

Life insurers, part of our financial services client base, are facing a rapidly maturing market, with annual net premium revenue growth of just 2%. To achieve their financial goals, companies will increasingly focus on profitability and their core, differentiating competencies of product design, distribution management, and investment management. This will result in increased market activity for outsourced policy administration services which Perot Systems provides.

ValueNotes: Considering how the finance sector has been affected, how is Perot Systems responding in the banking, finance and accounting and insurance sectors?
Vardhman: We have a niche play in the banking sector and primarily focus on Central Banks to whom we provide niche payment solutions. Within insurance, we are seeing insurers consolidating their applications, business process and infrastructure contracts. The IBPS division of Perot Systems has a strong focus on the life insurance and annuity segment and uses a common, proprietary set of core processing systems and tools deployed across all delivery centers to ensure seamless global delivery. About 900 of our company’s IBPS employees are dedicated to the life insurance vertical. We provide end-to-end BPO and Third Party Administrative (TPA) services starting from new business processing, through policy administration, to claims processing on both active and closed-block policies. Perot Systems manages approximately 3 million life insurance policies and annuity contracts for over 30 leading insurers. We are able to provide clients the benefits of economies of scale by managing all policies on a single instance and version of its Lifesys™ proprietary, multiclient life insurance and annuity administrative system.

ValueNotes: Perot Systems operates in multiple verticals and across services (consulting, business process services, infrastructure services, etc). Which of these do you expect to show significant growth in the next five years?
Vardhman: We are significantly optimistic about our prospects in the healthcare and government sectors. We believe that there would also be renewed buying from the financial services sector shortly. The company’s plan for the future is one of trust, integrity and value – the basics.

First, we will continue to enhance our clients’ businesses, making Perot Systems an integral part of their daily operations. As our clients continue to see firsthand that we are a trusted provider, we will remain passionate about exceeding their expectations. Second, we will continue to develop capabilities and solutions and deepen the domain expertise that will allow us to excel in the marketplace. In keeping with this plan, we will continue to attract, hire and train the best people in the business, including proven industry leaders, and leverage our business process, application and infrastructure capabilities. Finally, we will deliver operational excellence globally. To do this, we will direct work to the most cost-effective locations, while maintaining our focus on delivering quality work and best practices that will further build trust with our clients.

ValueNotes: Perot Systems are set to open a new facility in Chennai. Was this a difficult decision considering the current conditions?
Vardhman: We just inaugurated the facility and already have about 100 associates working from there. No, the decision was not difficult for us. As a business process services provider, we have focused on delivering value to our customers through a strong model of accountability, trust, integrity and continuous innovation. Our processes and systems are highly mature, and continuous improvement is an obsession with us.

ValueNotes: What kind of services will this facilityprovide?
Vardhman: We will be providing complex healthcare revenue cycle, healthcare payer and life insurance transaction processing and contact center business process services.
ValueNotes: Does Perot Systems have any plans to enter any new industry/vertical?
Vardhman: We are excited about the prospects of the domestic healthcare market for all our services - infrastructure, applications and BPO. Besides, we believe that the demand from the life insurance and financial services sectors will rise in the medium term.

ValueNotes: How do you think outsourcing service providers should deal with (and respond to) the current economic climate?
Vardhman: Service providers will need to contend with several changes in the market place. While companies are going slowly with decision making on account of the economic climate, the opportunities will become larger in a few years from now. I think there will be a new wave of consolidation amongst service providers and a new degree of domain specificity will be sought by buyer organizations in the solutions or services they outsource. Pricing will become critical as companies will look for best quality, and not marginal quality, at an attractive price point.