EX-PGP (2010-13 )
The case talks about a medical transcription company, Vasant Scribes and the challenges faced by it in terms of growth. The revenues and company had stagnated and had tried various methods to diversify into higher value added areas of medical billing & marketing analytics that hadn't worked. The case highlights the steps that were taken and the options available ahead. Case Facts
Vasant Chemicals Limited was the flagship company of the Vasant Group. After Being in the bulk chemical category for about 25 years, Mr. Chowdary, MD wanted to move into a new economy business. Vasant Scribes Ltd was the outcome of a Brainstorming by the promoter of Vasant Scribes, who had a desire to make a foray Into the IT services sector. With the help of consultants and internal reviews, the group Narrowed down on Medical transcription services as the main focus area to enter the Services business.
Vasant Scribes transcribed about 100,000 lines of transcription per day. It had about 320 employees spread over 3 locations in Hyderabad. The Company also outsourced Some transcription work to franchisees in Vijayawada, Coimbatore and Kolkata. Phase 1: Initial years and growth pangs (1999-2001)
The key challenges that the company faced during this phase were: 1. Establishing credibility in the US transcription market
2. Winning its first clients
3. Managing manpower and maintaining a redundant work-force. Phase 2: The years of rapid growth (2001-2004)
In 2001, the company initiated a number of measures to improve marketing efforts, Including engaging the services of a US telemarketing services company. This strategy started showing results in the second half of the 2001. At the same time, the efforts in establishing a US based subsidiary and sending the COO to the US started paying off. Some of the key achievements of the company in this phase were as follows: This account catapulted Vasant Scribes from a small company to a Medium sized company
1. Wins of some medium sized clinic accounts. Most of the initial clients were a result of doorto-door campaigns. Subsequent wins were a result of references from these clients. 2. Winning a large account due to previous relationship and experience with the client. 3. Establishing sub-contractors in order to increase capacities without risk of redundant manpower.
The idea to diversify was fueled by the desire to continue to grow rapidly while at the same time not exposing the company to the risks of continuing to operate in a single sector. There have been continuing discussions amongst industry players about the changing face of medical transcription including the role of technology.
Some of the key areas that were considered for diversification included: appraisal transcription (being similar in nature to medical transcription) medical billing and coding (being a natural forward integration into a high-end Outsourcing business)
legal transcription/outsourcing (unrelated business)
voice mail transcription (being a natural extension to medical transcription) marketing analytics (unrelated business)
Phase 3: Challenges of diversification (2005-2007)
Pursue medical billing business. It was viewed as a natural forward integration of existing medical transcription business. The medical billing services were offered under a different brand name of Vantage billing services to distinguish it from Vasant Scribes, which had already gained repute as a medical transcription client.
Medical billing industry
Medical billing process were more complex, sophisticated technological support Risky affair
High level of negotiation (CFO level involvement in contract ) Fragmented Industry
Marketing Analytics business overview
The job of a service provider was therefore twofold to demonstrate that they had the capabilities and to show the...