Monday, April 30, 2007

Pharma offshoring will present a $7 billion opportunity by 2013

Outsourcing of drug discovery research is slated to show the highest growth of 26% a year, according to the report by the Pune-based Value Notes

The pharma outsourcing business in India will grow to around $7 billion (Rs28,700 crore) by 2013, as global firms seek to leverage advantages related to cost and quality the country possesses, said a report by research firm Frost & Sullivan.

Another report, by Pune-based research firm Value Notes, forecasts a growth of 23.6% a year for the industry up to 2010.

India is a preferred destination for pharma outsourcing because of the low cost of research but manufacturing in the country and tapping opportunities in contract manufacturing and research is still a relatively new strategy for Indian firms that have traditionally focused on manufacturing and marketing drugs.

The Frost & Sullivan study, titled The Indian Contract Research and Manufacturing Services Market, said the pharma services outsourcing market in India (also known as contract research and manufacturing services or CRAMS) was valued at $895 million in 2006.

Making raw material for medicines (known as active pharma ingredients or APIs) and oral solid formulations (tablets and capsules) continue to be the major sources of revenue for India’s contract manufacturing industry. And of the various segments in contract research, outsourcing of drug discovery research is slated to show the highest growth of 26% a year, according to the Value Notes report, titled Contract Research Opportunity for the Indian Pharmaceuticals Industry.

“These estimates too are conservative, as several of the top Indian outsourcing vendors are pursuing some combination of international expansion and investment in new drug discovery programmes in the product patent regime,” said Suchita Chaudhari, an analyst at Value Notes and co-author of the report .

The key players in the Indian CRAMS space are
Nicholas Piramal India Ltd,
Divis Laboratories Ltd,
Dishman Pharmaceuticals Ltd,
Dr Reddy’s Laboratories Ltd, and
Shasun Chemicals and Pharmaceuticals Ltd (in the contract-manufacturing sector);

Syngene (Pvt) Ltd,
Jubilant Biosys Ltd,
Suven Life Sciences Ltd,
GVK Bio Ltd, Chembiotech (Pvt.) Ltd,
Quintiles Transnational Corp.,
Vimta Labs Ltd,
Lamda Therapeutics Ltd,
Lotus Labs Ltd, and
Siro Clinpharm Pvt. Ltd are the majors players in contract research and clinical research space.

And multinational companies such as Pfizer Inc., GSK Plc., Novartis AG, Eli Lilly and Co., Bristol-Meyer Squibb Co., Teva Pharmaceutical Industries Ltd, etc. have already tied up with Indian companies for both drug development and manufacturing services.

“While (traditional) contract manufacturing, consisting of (manufacturing) API and formulations, has been growing at a phenomenal pace of close to 35%, there are (other) emerging areas (in it) that are also picking up pace,” said Mahesh Sawant, programme manager, biotechnology and life sciences, healthcare practices, Frost & Sullivan.

According to the Value Notes report, global pharmaceutical companies are increasingly turning to Indian vendors offering drug discovery research using newer techniques at much lower costs. Major drug discovery companies are realizing that the question is no longer whether to outsource or not, but one of finding the right partners.

Drug discovery is the process by which molecules are identified for their therapeutic efficacy and can take up to several years. Companies are now finding that improving the hit-to-lead conversion and early identification of unsuccessful compounds can accelerate the process.
While India has enough expertise in areas such as chemistry and drug delivery systems, it doesn’t have enough expertise and enough trained manpower in biological services such as protein structural analysis or expression profiling. This is one of the main challenges facing Indian companies.

The Value Notes report said that Indian firms would enter into various strategic alliances and also acquire companies in India and abroad to build on capabilities to leverage the opportunity.
“There is an increasing trend among Indian contract research organizations to move up the value chain by becoming preferred vendors of a few global outsourcers rather than serving as jack-of-all trades. Preferred vendors often land up with high-margin contracts such as researching and/or developing proprietary technologies for the client,” said Chaudhari.

Source: Mint-WSJ / LiveMint (Plus) Microsoft Corporation for Copy+Paste commnad
Vertex announces exclusive contract with HSBC

Vertex Financial Services (VFS) today announced that it has signed a new services contract with HSBC Life (UK) Limited for several new protection and life investment products. This is an exclusive contract over the next five years which is expected to generate significant value for both companies.The first phase of the contract is for VFS to deploy its Bond Services solution to provide administration for a new Guaranteed Income Bond (GIB) product range.

Further life investment and protection products for various distribution channels, including IFAs, are also planned.The services provided by Vertex will include:

• Quotations
• New Business
• Policy servicing
• Claims administration

David Child, managing director, Vertex Life, Pensions and Distribution, comments
:"Winning this services contract is a clear demonstration of our market-leading capability in the life, pensions and STP arenas. We are very pleased to work with HSBC Life to help develop and support their insurance growth into new channels and I am confident we will add value as a key partner."

Craig Colton, director, HSBC Life comments:
"HSBC Life is delighted to enter into this new agreement with Vertex, which will give us a really solid foundation to take forward our development plans. Part of HSBC’s insurance growth strategy is to increase the market share of our bonds business and the launch of the GIB and other products with Vertex’s support will be crucial to achieving this."
HSBC Life's new dedicated administration services will be based in Cheltenham.

The new HSBC Life contract for Vertex Life, Pensions and Distribution follows other contract wins in 2006 including AIG/Living Time and Gartmore (Jessop Fund Managers).

Friday, April 27, 2007

ISG to Acquire TPI for $280Mn

Information Services Group (ISG), a Connecticut-headquartered acquisition company created in 2006 to build a high-growth, industry-leading information service company, has entered into an agreement to acquire TPI, a US-based sourcing advisory firm, for USD 280 million (in cash). The acquisition is subject to the approvals of ISG shareholders and customary regulatory. The transaction is likely to be completed in 4Q 2007.

Post-acquisition, ISG aims to repurchase TPI’s common stock and/or warrants worth USD 40 million, while the founder and members of the management of TPI are likely to invest about 30 percent of their proceeds from the acquisition in ISG stock at closing price.

ISG’s financial and legal advisors for the transaction were Evercore Partners and Simpson Thacher & Bartlett, respectively, whereas TPI’s financial and legal advisors were Deutsche Bank Securities and Ropes & Gray, respectively.

TPI registered revenues of USD 147 million in FY 2006 and expects its FY 2007 revenues to increase by about 15 percent. The company’s headquarters are located in Texas, the US. The company also has operations across Australia, France, Germany, India, Japan, the Netherlands, New Zealand, Singapore, Sweden, and the UK.

It serves several clients, such as AT&T, Bombardier, ChevronTexaco, Diageo, Goodyear, P&G, Pfizer, Singapore Airlines, Volvo, etc., from diversified sectors including energy, financial services, healthcare, manufacturers, pharmaceuticals, restaurants, retail, etc.
Atos to Provide IT Services for Olympic Games

Atos Origin, a French IT services provider, has won an information technology outsourcing (ITO) deal from the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG). The financial terms of the deal were not disclosed.

The deal entails Atos to offer IT support services including provision of IT products and services for the Beijing 2008 Paralympics Games. In addition, the company will provide system customization, integration, and operations services to the committee for its two information systems – the Games Management System (GMS) and the Information Diffusion System (IDS). Atos will be responsible for designing, developing, and testing these two systems.

In addition, Atos will develop an information system catering to the special requirements of the Paralympic sports. It will also customize existing applications to make them more user-friendly and offer support in Chinese. Atos will also be a sponsor for Beijing 2008 Paralympic Games.
CSC to Buy Covansys for $1.3Bn

CSC, a California-headquartered IT services company, has entered into a definitive agreement to buy Covansys, a Michigan-headquartered IT services company, for about USD 1.3 billion in cash. The acquisition is likely to be completed by 2Q 2008. The transaction is approved by the Board of Directors of CSC and Covansys. The directors at Covansys have recommended that the company’s shareholders to approve the acquisition.

The acquisition is also subject to customary approvals, such as expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. CSC’s financial and legal advisors for the transaction were UBS Securities and Gibson Dunn & Crutcher, respectively, while Covansys’s financial and legal advisors were Credit Suisse and Butzel Long, respectively. In addition, special legal advisor for the transaction comprised the Board of Directors of Covansys and Katten Muchin Rosenman (a US-based law firm).

Through the acquisition, CSC will nearly double its Indian headcount to about 14,000 employees, thereby strengthening its position in the Indian market.
About 65% Outsourcing Contracts Ended Before Actual Termination – Compass

According to a study conducted by Compass Management Consulting, a UK-based business and IT consulting company, about 65 percent of outsourcing contracts terminated before the actual date of termination over the past two years. The move was primarily driven by increasing costs charged by vendors as well as distrust among the outsourcing buyers and vendors.

These findings came after the company examined a total of 240 outsourcing contracts worth GBP 3.3 billion awarded over the last 2 years. Among the key findings, outsourcing deals costs about 20 percent more as compared to the cost involved in maintaining a comparable in-house department providing the same functions/services. However, vendors claimed to reduce the cost of maintaining an in-house department by up to 18 percent.

Tuesday, April 24, 2007

KPO to Generate Employment for 280,000 People by ’10 – Evalueserve

According to a white paper published by Evalueserve, an Indian KPO company, the Indian KPO industry is expected to generate employment for about 280,000 professionals and earn revenues of USD 11-12 billion by 2010. The industry recruited about 75,000 professionals and earned revenues of USD 3 billion in 2006. The increasing demand for KPO services from small- and medium-sized enterprise (SME) segment and the acceptance of the KPO model are major forces driving this growth.

Among the key findings, the number of SMEs depending on captives or third-party KPO service providers is likely to increase from 900 in 2006 to 5,000 by 2010. In addition, KPO service providers are expected to increase their capacity by 55 percent, while capacity in the captives is likely to increase by 45 percent by 2010.

Vendor model (buy model) is likely to outgrow the captive model (make model) by 2010. The cost and time involved in implementing a third-party vendor solution is less as compared to the time and cost involved in establishing captives. These advantages will encourage SMEs and other big companies to opt for the buy model as compared to make model; about 90 percent of centers are expected to be built on the buy model by 2010.

In addition, KPO vendors have been expanding their operations in Latin America and China to offer their services in multiple languages. About 5-10 percent of the US and European SMEs are expected to benefit from KPO. Dual-sourcing (outsourcing work to their captive and external vendors simultaneously) will be an emerging trend among large companies having captives.

Friday, April 20, 2007

Quatrro BPO buys out eIndia’s stake

Raman Roy’s Quatrro BPO Solutions has bought out Mauritius-based fund eIndia’s stake in Chennai-based Scope eKnowledge, a knowledge process outsourcing (KPO) firm. Through this acquisition, Quatrro has taken a ‘significant majority stake’ in the 500 people KPO.

This is Quatrro’s fourth big investment in the last 12-18 months. Others include 100% buyout of Flextronics BPO arm and investments in Annik Technology Services, an analytics firm and John Keells, a shipping and ports services company.

Simultaneously, Quatrro has also got an additional funding of $100 million from a bunch of VCs, taking the total VC investment in the company to over $200 million. Olympus Capital is one of the VCs which had invested about $90 million in Quatrro sometime back. Scope eKnowledge is a top-end KPO vendor with services spanning patent filing, knowledge extraction, legal processes and market research. Its clients include Thomson Scientific, Reed Business Information, London Business School and Fortune 100 companies.

Its 500 staff comprise engineers, doctors, radiologists, MBAs and other professionals. Raman Roy, CMD, Quatrro and V Balakrishnan, who spearheads Quatrro’s M&A effort, will be joining the eScope Knowledge board. Interestingly, Scope eKnowledge was set up back in 1987 as a business research organisation and made its foray into KPO space in 2001.

To Economic Times India, Mr Roy said,
``Scope eKnowledge is a top-end research and KPO firm. What excited us was the
kind of work they do and the fact that net margins in such business are almost double of what you can expect in BPO work. Our business model is to support management teams. We will supplement the management of Scope eKnowledge and will not replace it. We are already making joint calls to customers for new business.’’
Typically, for BPO work, the net margins are in the range of 12-15% while in KPO companies it can be double of that. Says R Sivadas, CEO, Scope eKnowledge,
We have a spectrum of clients including Fortune 10 companies and four of the top
10 global publishing companies. KPO business is still nascent in India but we see lot of potential. It is beginning to grow now. We have built a large, trained, qualified team and with Quatrro now we have access to significant domain expertise as well.’’

Besides English, Scope eKnowledge offers services in German, Spanish, French, Korean, Chinese, Russian and other languages. The delivery centre is in Chennai and it also has offices in China, New York, Chicago, Orlando, London, Brussels and Cologne.

With Scope eKnowledge, Quatrro now has 1,300 to 1,400 people and is looking at both organic and inorganic growth options.

source: EconomicTimes India
Outsourcing Deals’ TCV Declined to $17.6Bn in 1Q’07 – TPI

According to TPI Index report for 1Q 2007, about 68 outsourcing contracts having a total contract value (TCV) of USD 17.6 billion have been awarded in 1Q 2007 as compared to 99 contracts having a TCV of USD 25.6 billion in 1Q 2006. TCV recorded in 1Q 2007 was the lowest as compared to the corresponding first quarters in last five years. In addition, the annualized contract value declined from USD 4.3 billion in 1Q 2006 to USD 3 billion in 1Q 2007.

The total number as well as the total value of commercial contracts (above USD 50 million) awarded in 1Q 2007 in the Americas declined as compared to 1Q 2006 and 4Q 2006. About 27 contracts were awarded in the Americas; the number was lowest as compared to the number of contracts awarded in the corresponding quarters of the past five years.

Among the other key findings, the index revealed that information technology outsourcing (ITO) is increasing as compared to BPO. Managed network services (MNS) outsourcing witnessed better growth rate as compared to ITO in the Americas. However, the European outsourcing market is predicted to grow as large number of ITO deals is yet to be awarded.

According to TPI’s study, annualized revenue from the outsourcing industry is estimated to grow by 3.9 percent in 2007 over 2006. This increase can be attributed to a 4.4 percent year-on-year increase in ITO.

Thursday, April 19, 2007

Biotech Firms Continue to Outsource Drug Development for Another 2 Yrs – E&Y

According to a survey published by Ernst & Young (E&Y), a UK-based professional services company, about 77 percent of companies have agreed that they will continue to outsource their key drug development activities for another 2 years. However, about 65 percent are still dependent on contract research organizations (CROs) to carry out such activities. The survey was conducted among 400 executives from biotech companies across the US, Canada, and Europe.

Improved efficiencies and reduced costs were identified as major factors driving biotech firms to outsource drug development functions. This will create huge opportunities for CROs.

Among the key findings, the percentage of biotech firms outsourcing this function will increase from about 16 percent at present to 36 percent over the next 2 years. In addition, it was evident from the survey that various biotech firms will continue to rely on contract sales organizations (CSOs) to outsource their sales force to achieve benefits, such as efficiency gains, expertise, speed, flexibility, and avoiding capital outlay.

According to another study conducted by HighTech Business Decisions, a US-based consulting firm, several pharma and biotech firms will continue to depend on contractors for assisting them in biomanufacturing processes, such as clinical, preclinical, and early-stage drug development functions.
Increased Technology Usage Among End Users Drives Firms to Outsource IT Functions – Unisys

According to a study conducted by Unisys, a US-based IT services company, the growing needs for increased IT support and productivity among end users and cost saving initiatives are the major drivers for firms outsourcing their IT functions, such as IT support. Employees have been relying heavily on technology such as PCs, laptops, PDAs, etc., which is driving the need for increased IT support among firms. However, the inability of the in-house IT staff to provide IT support to diverse end users primarily encourage outsourcing of IT functions.

The Unisys Trusted Enterprise Index revealed that about 60 percent of the business and IT professionals across the US and UK believe that outsourcing will affect their organizations’ image negatively among their customers. In addition, a recent IDG Research Services study commissioned by Unisys revealed that a majority of the respondents were unable to properly quantify the benefits out of outsourcing for their businesses.

Monday, April 16, 2007

Why Finance and Accounting Outsourcing deals never happen or go awry if they do?

It has recently been reported in the press that 30% of offers made to buy houses do not result in an exchange of contracts. Based on research this number is much higher for Outsourcing deals with an incredible 50% of all Outsourcing initiatives never getting to contract signature.
As with many other functions and processes, plans to outsource finance and accounting (F&A) can fail for many reasons. This paper explores some of the reasons why F&A Outsourcing deals can fail and provides you with insight into how to avoid making these mistakes.

An Incredible 50% of Outsourcing contracts never get to contract signature!

Find out all Morgan Chamber thoughts on F&A Outsourcing here [free subscription]
Citigroup Plans to cut 17,000 Jobs, Revamp IT

Citigroup, a New York-headquartered financial services company, has announced its plans to cut about 17,000 jobs and revamp its entire IT operations. The move is in line with the company’s restructuring plan aimed at achieving cost savings of over USD 10 billion by 2009. About 8 percent of the group’s employees will be affected by the company’s plans of restructuring its operations.

In order to modernize the group’s IT operations, various activities, such as consolidating its data centers, standardizing application development, and modernization of voice and data networks will be performed for its operations across the world. In addition, the company plans to offshore/outsource part of its back-office operations affecting about 9,500 employees to low-cost destinations. The company is also considering increasing the usage of shared legal, human resources, risk management, financial operations, and back-office functions and plans to centralize its entire purchase functions by 2009.

According to Guillermo Kopp, an analyst at US-based research and consulting firm TowerGroup, the group is cutting large number of jobs from non-growth areas and aims to retain employees from high growth areas including global wealth management in the US and corporate banking in Europe.

source: globalservicesnow
Capgemini plans to open an information technology outsourcing (ITO) center in Katowice, Poland ,with an investment of about EUR 2.3 million. The company has been serving the Polish market since 1996 and employs about 2,000 professionals across the country.

Initially, the center will employ about 135 professionals in 2007, and the company plans to increase the headcount to 410 in the near future. The company aims to offer various ITO services, such as helpdesk, IT infrastructure management, and monitoring of IT system operations, to its clients across the country through the center.
First Tennessee plans to outsource some of its processing services including checks, statements, mail processing, and its back-office operations of Prescott-based operations center to WNS. The move is likely to affect the bank's 44 employees in its Prescott (Arizona) center and aims at achieving significant costs savings. About 76 employees of the bank will be affected from the bank's operations in Tennessee and Kentucky. Moreover, some of the affected employees are likely to be placed within the bank.

Wednesday, April 11, 2007

Revenues from Top 5 European IT Providers to Reach EUR 5Bn in ’08 – Value Leadership

According to Value Leadership Group, a New York-headquartered management consulting firm, revenues from the top five European IT companies (Capgemini, LogicaCMG, Atos Origin, Indra, and Tietoenator) are expected to increase from EUR 2 billion in 2006 to EUR 5 billion in 2008.

Among the key findings, India’s top two IT companies – Tata Consultancy Services (TCS) and Infosys – collectively generated net profit of about USD 1.7 billion in 2006, while the entire European IT industry generated net profit less than this figure of USD 1.7 billion. In addition, the combined market capitalization of the top five IT companies in Europe was USD 23 billion last month as compared to USD 100 billion among the top five Indian IT services firms including Infosys, TCS, Satyam, Wipro, and Cognizant (a US-based company having India-centric operations). However, the European IT market is expected to display various fluctuations by 2009 to compete with their Indian counterparts.

About 92 percent of the German firms are yet to realize the need for establishing offshore operations in India. However, some European big IT firms such as Capgemini have established their presence in India (Capgemini acquired Kanbay in 2006 to access Indian professionals).

Among the other key findings, Infosys’s revenues from Europe are expected to increase from EUR 950 million in 2007 to EUR 1.4 billion in 2008, reflecting a CAGR of 62 percent for the next decade. Even Wipro acquired few niche companies in Europe.
Hosting IT Infra Benefited SMBs

According to a study titled ‘The Small Business Transition to Hosted Technology: Costs vs Benefits’ conducted by BizTechReports.Com, a US-based reporting agency, small and medium businesses (SMBs) that outsource their IT infrastructure are benefited more than those that maintain their in-house IT department. About 54 percent of SMBs (those who outsource their IT infrastructure) revealed that they spent less than 5 percent of their revenues to upgrade IT infrastructure, while about 64 percent of the organizations (those who do not outsource) revealed that they spent more than 10 percent of their revenues on IT infrastructure.

Among the key findings, companies outsourcing their IT infrastructure are better in terms of frequency of security incidents or incidents of technical failures as compared to the companies who do not outsource their IT infrastructure. In addition, the outsourcing organizations gain exposure to cutting-edge technologies and approaches such as Software as a Service (SaaS) much ahead than their non-outsourcing counterparts.
According to Lane Cooper, the CEO of BizTech Reports.Com, outsourcing IT operations allows companies to focus on their core businesses and to achieve business objectives.
Firms in Automotive, Manufacturing, and High-tech Industries to Outsource IT and BPO Back-office Functions – EquaTerra

According to a study conducted by EquaTerra, firms across various industries including automotive, manufacturing, and high-tech in North America have been increasingly outsourcing their back-office IT and business processes functions to external vendors to remain globally competitive. In addition, reduced cost, improved customer satisfaction levels, and enhanced performance are the major factors driving the need for outsourcing such functions.

It has been discovered that firms across the three industries have been outsourcing their IT, call centers and CRM, finance and accounting, contract manufacturing, logistics, application development, and engineering functions for a long time. At present, they need to focus on outsourcing back-office IT and BPO.

Among the key findings, about 32 percent of firms revealed that they outsourced at least 1 process and are expecting to outsource few more processes in the future. About 38 percent of firms are expected to outsource their functions to new geographies or business units while about 29 percent are expected to expand their existing outsourced process areas.

According to EquaTerra, big outsourcing vendors are expected to offer a wide range of services in other areas, such as R&D, logistics services, document services, warranty, and after-sales services. However, the number of vendors offering multiple services across various geographies will not be substantial. In addition, it is expected that organizations will outsource their back-office BPO functions to low-cost destinations, such as India or China, and leverage those markets as well. However, Central and Eastern Europe will remain the preferred destination among buyers.

Monday, April 09, 2007

About 72% of Irish Firms Prefer IT Outsourcing – ICS

According to a study by the Irish Computer Society (ICS), the national body for ICT professionals in Ireland, about 72 percent of the Irish organizations outsource their IT operations, while the remaining 28 percent do not outsource their IT functions due to factors such as uncertainty regarding providers’ ability to supply the required level of service, apprehension about the realization of outsourcing benefits and goals, and concerns over the management of the outsourcing providers.

In addition, hardware maintenance, application development, application support, website development, and consultancy were cited as the most frequently outsourced IT functions. In terms of sectors, public sector organizations prefer to outsource application development and hire consultants, while private sector organizations outsource hardware maintenance.

The study estimated that although the smaller organizations do not have appropriate IT infrastructure and human resources, they outsource less as compared to large organizations. Only 4 percent of the organizations outsource the entire IT functions to external vendors.
The study revealed that the IT outsourcing among the various Irish firms was driven by the provision of additional IT services and not cost reduction.

Friday, April 06, 2007

Delphi has announced its plans to offshore about 650 finance jobs from its worldwide operations to Genpact. The move is in line with the company's plans to restructure its operations and exit court protection.

According to the papers filed by Delphi with the US Bankruptcy Court in Manhattan, the company has signed a deal with Genpact under which Genpact will provide finance-related functions, such as bills and receipts processing, travel and expense reporting, accounts receivable, and accounts payable. Through the deal, Delphi is likely to save about USD 150 million over the 88-months term of the deal. The company is expected to spend USD 220 million (including payments to Genpact) to shift its finance-related functions to Genpact.
IBM has expanded its presence in India by opening a new Autonomic Computing Technology Center in Bangalore, India, to cater to the needs of self-managed autonomic technology and systems among its Indian business partners and clients. The facility will primarily aim to focus on IBM's global Autonomic Computing initiative and will enable IBM to create and provide systems equipped with in-built intelligence to the Indian market and will help in simplifying IT complexity for clients. Employees in the center will work in association with various other software development centers of IBM, including IBM India Research Laboratory, across the globe to develop autonomic solutions.
According to a study conducted by Frost & Sullivan, although healthcare information technology (HIT) market in the US is currently in its early stages, the market is expected to offer considerable growth opportunities for HIT vendors in the near future.

The federal government has been significantly focusing on electronic health records, which is driving growth opportunities for the HIT industry. The study also revealed that vendors must focus on educating third-party payers about various benefits of HIT solutions. In addition, vendors should also educate insurance companies and other organizations about benefits derived from implementing HIT systems. Among the other key findings, reasons, such as lack of technical expertise and professionals, need for workflow changes, and lack of awareness on HIT are major factors hampering the adoption of HIT by various physicians. However, independent physicians are more reluctant to HIT adoption than salaried physicians.