Components of a complete transcription delivery system

In order to understand the pricing model and the cost components associated with the final delivery of transcription, it is essential that the offshore companies realize that they are one of the components   in the delivery system. Failure to recognize this often leads to false expectations that a substantial part of the 12 or 13 cents is allocated for transcription labor.

If an offshore transcription company were to set up an office in the US to market its services directly, besides the office set-up costs and marketing costs, it would be required to provide the following:

• A toll-free dictation system – The estimated cost can be between 1.5 cents to 3 cents a line, depending on the volume, based on the current ASP offerings
• Two cents or more a line for second-level editing, depending on the quality
• Hardware, network, communication infrastructure and software including FTP capability, transcription document handling and workflow
• Ability to market and provide customer support Technical support for interface with the hospital / clinic patient record systems
• Ability to support distribution by fax, mail or electronic

The offshore vendor must also recognize that home-based independent contractors who are available locally and require less supervision have been offering similar services at 7 to 8 cents a line in most areas.

To use transcription services from an offshore facility there has to be a compelling reason that weighs in all these factors.

The offshore vendors must understand that the industry is not in dire need of capacity (not yet) and hence will not tolerate high cost and inconvenience. This is unlike the dot com economy where it was possible to demand ridiculous rates for those who claimed to be IT experts.

The independent contractors at 7 to 9 cents are still available and continue to offer a better alternative to offshore companies who demand 70 or 80 % of the revenue for flipping voice files and delivering first level document that needs additional QC.

Unless the offshore companies recognize the effort involved in acquiring the client, capturing voice files, ensuring quality, providing supplementary services and   supporting the customer, the partnership cannot work. A quick and premature death of the offshore companies is inevitable unless they recognize that they must provide compelling reasons for the local vendors to seek the help of the offshore companies – lower cost, improved profitability, willingness of the offshore partner to be more than a fixed cost subcontractor, minimal change in operations and process etc.

The investment required by an offshore transcription company

Most offshore companies have underestimated the cost of setting up a transcription facility. Many companies failed to recognize that the salary cost could be prohibitive while the company is struggling to develop the workforce and acquire business. The birth of multiple companies at the same time even in the absence of adequate work also resulted in unjustified escalation of labor cost and adversely affected the cash flow problems.

The payment cycle is stretched due to the presence of middlemen often extending upwards of 60 days, further exacerbating the situation. Until the relationship is built, the workload often fluctuates, requiring the maintenance of an underutilized workforce. To plan for growth, substantial resources have to be spent on training and quality.

It has become apparent that most successful companies require a strong presence in the US to build and to grow their business. Coupled with travel expenses, this can be an additional drain on the resource.