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Tuesday, Aug 12, 2003

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McKesson in talks with Kshema Technologies

Rukmini Priyadarshini

Bangalore , Aug. 11

MCKESSON Corporation, a $50-billion healthcare company, is planning to tap India's offshore development capabilities. "We plan to start small, but are thinking big," said Mr Charles Nettles, Chief Technology Executive, in conversation with Business Line.

Having outsourced operations and projects earlier with mixed results, McKesson is focussing on India. McKesson Information Solutions, a business within McKesson Corporation, offered healthcare organisations comprehensive software solutions and services to improve patient safety and reduce the cost and variability of care as well as to better manage their revenue stream and resources, said Mr Nettles.

The key to healthcare was cost management, real flexibility and real profitability, he said. The company had already initiated a trial run with one Indian vendor and was in talks with Kshema Technologies for "outsourcing components of its Horizon Clinicals product line," Mr Nettles said, adding that if it proved successful, McKesson would outsource the entire product line. "With the high employee turnover in the software industry, intellectual property protection is an issue when outsourcing. Kshema Technologies has an interesting model for IP protection," he said.

The initial applications and transformation could involve three-year projects, he said, adding that he was convinced about Indian software competence. He declined to comment on the expected savings from the move — "we hope to outsource much more, based on initial success."

Through a series of acquisitions, McKesson has acquired specific capabilities and applications that were created on legacy systems. "We are looking to transform these three-tier client server solutions to Web-based technologies — this involves setting richer interfaces and HIPAA compliances as well, not just porting," said Mr Nettles.

McKesson's Horizon Clinicals is a comprehensive suite of next-generation, integrated solutions for physicians and other clinicians in a variety of care settings.

This modular suite of clinically intelligent information systems thinks and works like clinicians, according to the company.

"While we outsource the migration of applications to contemporary and cost-effective solutions, we can focus our internal resources on creating new applications and new research — letting us use our resources better," Mr Nettles said about the rationale for outsourcing to India. The company, which had outsourced to other providers earlier, says it had not had a completely positive experience — "now that we can better manage such projects and know how to interact with providers halfway across the world, we are more confident about our outsourcing decision," he said.

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