Synopsis
While IHH executives declined to reveal the value of the deal, IT industry experts said it could be worth a few hundred million dollars, depending on the scale of deployment and the length of the contract.Listen to this article in summarized format
The project is the first step in a process that could see the Malaysia-listed IHH outsource its finance and accounting functions.
While IHH executives declined to reveal the value of the deal, IT industry experts said it could be worth a few hundred million dollars, depending on the scale of deployment and the length of the contract.
The building of the ERP platform will help IHH – a global healthcare major with almost 190 facilities, including 89 hospitals, and over 75,000 staff across 10 countries – leverage its scale, group chief financial officer Dilip Kadambi said. “We looked at it and said, how do we leverage synergies? How do we leverage scale in providing healthcare?” he told ET.
IHH, which has grown through acquisitions such as that of Fortis in India, found it was unable to scale its business effectively because its IT systems were not ready for it.
Even without having clean, unified data, the company was able to save $150 million by purchasing capital equipment such as MRI machines with one global contract, and the new platform would enable the company to seek similar savings across its supply chain, senior executives said.
“Imagine, if I am able to dig down into the granularity of gloves (and) surgical textiles – if I can know that an apple here is an apple there – imagine the amount of consolidation that I can drive,” said Linus Tham, chief information officer at IHH Healthcare. “So, that’s one big use case that we can unlock by having a similar common data platform sitting on top of a common ERP solution.”
Infosys won the deal after a year-long process, which required the Bengaluru-headquartered IT company to pitch not just costs but also on how it would deploy artificial intelligence to enhance the standard ERP system provided by Oracle.
Infosys has not responded to ET’s request for more information on the deal until press time on Wednesday.
The building of the ERP platform could also set up a broader outsourcing push at IHH Healthcare, CFO Kadambi said.
“The (unlock of value) will happen…when we are able to take it to the next level of actually having a shared service and moving a lot of these processes best handled by somebody else who does this for a living,” he said, noting that it is all handled within IHH at present.
“Once you have an ERP…you get the view and you can consolidate,” Kadambi said. “The larger idea is to kind of set up a GBS (global business service).”
