Knowledge Process Outsourcing, or KPO, as opposed to BPO. And it is exciting enough to have prompted some Indian venture capitalists to hop across the fence and become entrepreneurs themselves.
Subinder Khurana is the President of MarketRx. Previously, he hunted for technology start-ups that his venture fund Infinity Technology Investments could invest in. Why did he cross over? He says, “I realised that BPO as we knew it was getting to be a commodity business and tough for independent start-ups to make money in. They had to move up the value chain.” But rather than wait to find such an entrepreneur, he decided to become one himself. Market RX was co-founded in the US by an Indian, Jaswinder S Chaddha, in 2000. Khurana set up the Indian operations a couple of years ago.
The company has developed advanced analytical software tools for designing pharmaceutical sales forces. Now, sending out medical sales reps in the US is expensive. Each time a sales rep visits a doctor it costs $150. So, a doctor would need to prescribe more than $150 to make that visit worthwhile. MarketRX works on data to pinpoint doctors who are most likely to prescribe certain drugs so that medical companies know what kind of drug to hawk to which doctor. It’s complex work that requires knowledge of competition, regulations, market conditions and sifting through millions of medical prescriptions.
MarketRx in the US employs about 90 people and bills about $15 million a year from 15 clients. In India operations are smaller, about 30 employees, most of them from IITs and IIMs. And all of them work a regular 9 to 5 day. “Working three shifts and attrition is not a problem here,” says Khurana. And how big is this opportunity? There are no ready estimates but consulting worldwide is a 140 billion dollar-business. Khurana says even if a small percentage of this can be outsourced, it would be a multi-billion dollar opportunity.
But it’s not going to be easy. A few days after I met Khurana I spoke to Mike Rake, International chairman of KPMG, and asked him if he would look to outsource any of the legal consulting his firm provides a client. The answer was a quick no. So there is an opportunity out there, but it requires some selling.