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