Case Analysis: Vasant Scribes

CASE ANALYSIS VASANT SCRIBES Kamia -D10007 Ramanjot- D10016 Tushar-D10025 BATCH 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 Sc ribes 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 Sc ribes 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. . Establishing sub-contractors in order to increase capacities without risk of redundant manpower. 1|Page Diversification Dilemma 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: ? ppraisal 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 ervices 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 potential client that there was a need. e make say, $1 per person per hour, we make $5 per person per hour in the case of medical billing and nearly four times as much in marketing analytics. We believe that the company must Continue to grow on the value chain for growth and survival. † Vasant Scribes Today With the issue of continued sustenance in medical transcription temporarily put away, the company was now gripped with the challenges of growing the medical billing and Marketing analytics businesses. 2|Page Some of the key issues before the management were OR Problem statement 1.Should the company continue to pursue the medical billing business? If so, How should it attempt to grow it? In the past, the company had looked at Potential acquisition of companies to gain initial credibility. Should the company pursue this option? Or, alternately, should the company look to tie-up with a reputed medical billing company in the US (essentially repeat the same trick as with medical transcription)? 2. Should the company continue to look to grow in marketing analytics, or Should it temporarily defer the plans until the establishment of the medical?Billing business? If the company were to aggressively pursue the marketing Analytics business, what should be the strategy? 3. Finally, since medical transcription had become a very large and profitable Business, should the company concentrate all its energies on this, and deemphasize The growth and diversification plans? Analysis 1) Yes they should pursue medical business only as a short term goal (as a variance) till the MTs business boom up, it should continue to do business with the US medical billing companies for contractual business. ) Market analytics is very lucrative business but requires more deployment of Resources in the form of talent manpower, continues technological upgrade, knowledge hunting, Market analytics cover the scope of Business intelligence and analytic tools, Data warehousing platform software, Performance management and analytic applica tions which was very new to Vasant scribes . Manpower hired for Business could be used in Market analytics expansion scope. They should study the markets & gather the resources to enter the analytics’ market meanwhile continue with the MTs & Medical billing business.They should adopt GO TO MARKET STRATEGIES that depend on ever finer segmentation of target audiences by industry, region & organization size. The momentum, Diversity & size is huge in business analytics market annually 3) Vasant Scribe should deemphasize the growth in Medical billing services & should focus on MTS & Market analytics service, MTs would be have volume business & Market analytics concentrated on high margin, the scope explore by Nasscom reviled big revenues generation source for Indian IT companies due to weaker going US employment. Thus creating win-win situation for both (US & INDIA CO) . 3|Page