6 NIIT Education And The Bigger E

As

it completed 18 years of operation, the Rs 1,096-crore NIIT shuffled around

blocks of its business model to transform from a training megalith to an ‘ebiz

solutions corporation.’ From products to projects to ebiz services, the

company leveraged on its SEI-CMM Level 5 quality processes and changing business

paradigms, to pick on a variety of opportunities in the new economy. From 15% in

April-June 1999, ebiz revenues increased steadily to 25% and 31% in the next two

quarters, finishing at 35% in January-March, 2000.

At

the onset of the fiscal 1999-00, NIIT implemented a SAP-based internal ERP

system, eXPRess, to help integrate enterprise operations and shorten product

delivery cycles. The system reportedly improved internal efficiency in handling

transactions, by providing consistent support for all its operations, and helped

increase the value of ebiz orders, especially for portals. NIIT was also among

the first Indian companies to implement economic value add (EVA), a globally

accepted measure of performance.

The

company also started an exercise to re-skill its employees in web technologies.

This was aimed at helping it offer more web-centric training courses. It also

set up a Cognitive Sciences research center located in IIT Delhi’s Synergy

building, headed by Dr Sugata Mitra.

NIIT focused on the need for enterprises to get on the web

for surviving in the new economy. Its suite of ecom products–ePayServer, eMart,

ePortal and eService-started paying dividends, and it added a solution to help

brick and mortar companies migrate to ebiz. A new alliance with Australian

telecom Telstra was aimed at offering solutions for those setting up ASP

services. NIIT also invested in Relativity Technologies, a provider of legacy to

web transformation technologies.

All this while NIIT’s domestic classroom IT training

business slowed down, and growth in educational software and online training

also remained below expectation. It faced the uphill task of graduating from a

player in the career education market to one in the professional education

segment, as it managed to stay at just above the training industry’s average

growth level. It split its training business into three brands, Futurz (ecom and

Net), CATS (Oracle, Linux, etc), and SWIFT (basic courses). And to keep up with

changing demands in its core business area of IT training, it also launched a

new internet and ecom-based i-GNIIT program.

NIIT has valued its education business (which contributes

about 35% of its revenues) at $800 million. It may decide to hive off its dotcom

ventures such as NetVarsity and eNIIT.com as separate companies, to improve

valuation. This may come handy when  it goes for acquisitions through stock

swaps. Other options include intensifying US operations to achieve 60% earnings

from that market.

The company has chalked out an ambitious plan for becoming the world’s

biggest IT education company by year 2002. It also aspires to top software

development on customer satisfaction, defect levels, productivity and employee

satisfaction. It has earmarked ebiz, e-transformation and e-learning solutions

as the three focus areas to drive future growth. And the ‘eNIIT’ brand is

going to be the cornerstone. DQ