Spotlight

Managing content for publishers worldwide

Datamatics Technologies is counting upon its focus on publishing to help it grow faster than the industry, says Sushma Naik

Law firms need precise information for their cases. As these firms charge their clients by the hour, they do not mind paying $20 to receive information for which they will have to spend hours collating data Mahesh Zurale President & CIO Datamatics Technologies

After commencing operations by concentrating on low-end data-entry work, Datamatics Technologies Limited (DTL) has moved on to become one of the largest players in BPO with a focus on publishing. The turnaround came in 1998, when DTL took the decision to expand its services to the publishing domain. Today, the company provides content management services to publishing houses, financial information providers and legal firms. Additionally, it provides services such as software development, editing and tagging of data.

Legal eagle

The opportunity for offshore services in the legal publishing field is enormous largely because all judgements in the US are available on the Internet on the concerned court’s website. However, as each American state has its own website, lawyers have a tough time finding out relevant information and referencing it to other cases. Firms such as LexisNexis provide a unified view by collating information from these different websites. LexisNexis is one of the largest publishing groups in the world, providing information related to legal cases, public records and regulations. Almost every law firm in the US uses the LexisNexis network. Looking at India’s cost advantages, firms such as LexisNexis are outsourcing their content management needs to Indian firms.

DTL provides content management services in the scientific, technical and medical domains in addition to the legal field. Currently, the company’s clients include LexisNexis and Cadmus Communications.

“Law firms need precise information for their cases. As these firms charge their clients by the hour, they do not mind paying $20 to receive information for which they will have to spend hours collating data,” remarks Mahesh Zurale, President and Chief Operating Officer, DTL. Content management services now account for the bulk of DTL’s revenues, contributing 44 percent to its turnover.

DTL has also forayed into back office processing, handling tax and claims work. In the accounting and tax segment, the company performs the back office function of filing tax returns for the clients of companies that provide tax information services. DTL has partnered with CCH Inc—part of the Euro 3.9 billion Wolters Kluwer group—that provides tax information services and online software tools for calculating and filing returns.

In a bid to move up the value chain and command higher margins, DTL also develops document management and workflow solutions. To this end, the company has signed alliances with document management technology firms such as FileNet and Hummingbird.

Inorganic growth

Because it wants to grow faster than the market, DTL acquired two companies, Saztec International and CorPay Solutions. Through the acquisition of SazTec, the company entered the HR and claims processing market. The acquisition also helped DTL create a front-end American company with a local sales presence. “Through our acquisition of Saztec, we are now in a position to offer healthcare claims processing, including collating mail and verifying claims by auditing and checking,” says Zurale. The company’s clients for these services include Unisys, Fidelity, Blue Cross and Blue Shield. DTL offers an applicant-tracking system for corporations that are involved in temporary staffing services or employ a high percentage of temporary employees. Here its clients include Webhire, ABN Amro and Kaiser Placements.

The acquisition of CorPay helped DTL enter the accounts payable processing market. CorPay provides services such as accounts reconciliation, invoice processing, cheque printing and distribution. Through CorPay, DTL got access to clients such as General Motors, Ford and Daimler Chrysler. Since this activity involves cheque processing and mailing to vendors, it requires an onsite presence which is complemented by CorPay’s 250-strong workforce. Comments Zurale, “We provide these services to US customers at a lower cost as they are processed in India, but the cheque printing and distribution is done by our American partners.”

Managing attrition

Unlike other BPO companies, DTL has implemented a unique model wherein it employs part-time workers whom the company dubs ‘knowledge associates.’ These associates could be housewives, students or retired folk. The company pays its associates based on the number of units processed. A unit is measured in terms of a page edited or a claim processed. The knowledge associate bears the cost of buying a workstation. By hiring part-time workers, the company is able to manage fluctuations in customer projects. By linking its costs to the business opportunities generated, DTL is in a position to manage customer scale-downs without impacting margins.

For instance, January to March every year is when tax returns are filed in the US, and this affects DTL’s tax processing division. During this quarter, the division has the flexibility to ramp-up or scale-down the team size without building excess capacity. Typically, during such periods, it employs more part-time employees. The company currently has 800 permanent employees and 1,700 associates. DTL uses this model in Mumbai, and plans to move to other cities and recreate a similar model as its business scales up.

To drive down costs, DTL also wants to subcontract its work to other Indian firms. Tax processing is an area where it is thinking of outsourcing work. In India, taxes are filed between April and October every year. After that, audit firms experience a slack season during the rest of the year. As the filing of taxes in the US coincides with the slack season in India, DTL feels that this could be a good opportunity to utilise the strengths of Indian accounting firms.

Mining the client

DTL is now focussing on increasing the revenues it earns from its top clients. It has a customer base of nearly 85, but the revenue it receives from its top clients is less than the average for other leading Indian BPOs—they contribute a mere 8 percent of its revenues. DTL has therefore hired client managers to get more business from existing clients. This move is paying off as some clients such as Reed Elsevier and the Thomson group have appointed DTL as a preferred vendor.

In the coming year, the company plans to renew its focus on core areas—content management for legal and health publications. At the same time, efforts are on to tap companies which outsource HR-related activities. It has also appointed investment bankers to look at key client accounts in Britain and the US.

sushma@expresscomputeronline.com