Thorns in the APAC Path

The past year saw several Indian IT training companies venturing into the

South East and Middle East Asian markets. Aptech and NIIT have undertaken

aggressive expansion in the region. Tata Infotech has just launched operations

in the Philippines, Vietnam, Bangladesh, Sri Lanka and Nepal. IEC Software has a

memorandum of understanding (MoU) with the University of Malaysia and Globsyn

Technologies with the Malaysian Government. STG has a presence in the Middle

East while Xansa is testing the waters in Bangladesh and Nepal.

The reason is simple. IDC estimates the APAC market to be worth $2.5 billion

by 2004. And India’s brand equity as a powerhouse of quality software

professionals makes it easy for training players to find local partners in the

region who are willing to invest. However, experienced players point out that

the path may not be so rosy. Amidst the immense opportunity lie unsaid tales of

struggle. Training majors NIIT and Aptech who approached these markets, had

their share of teething problems. In fact, Aptech had to withdraw from Malaysia

as it found it difficult to adhere to the strict stipulations in the country.

Says V Balasubramanian senior vice-president at Aptech, who also heads the

international training business, "Every country has its rules and

regulations for education and franchising. Malayasia for instance, insists on

getting the courses approved before they are launched. This is time consuming

and does not fit into the Aptech business model."

Companies entering these regions need to have long term plans. The India Inc

brand might be harmed in the long run if players simply go out to make a quick

buck. "The message that should go out is that is it not an easy market out

there. One has to have enough cash reserves to establish oneself in the region.

Otherwise, individual players may not only bring a bad name for themselves but

to the entire Indian IT training industry," says Suren Singh Raisaly,

Senior VP, Head of Worldwide Training and Education Business, NIIT. Despite

being an attractive market, the conditions for doing business could be very

different from India. "Whether it is the South-East Asian or West Asian

market, the needs of country are very different. Unlike in India, where training

institutes simply teach IT in English, there could be stipulations regarding

teaching in the local language."

Besides, there are legal formalities like getting licenses and numerous

clearances. "For instance getting a license to set up a training centre in

Saudi Arabia could take as long as three years. There has to be a prayer room

and seats for boys and girls have to be separate with acceptable distance

maintained," adds Raisally.

Similar concerns are voiced by other industry veterans. Bikram Dasgupta,

chairman and CEO of Globsyn Tech is in the process of inking an agreement with

Samsung Data Systems, the training arm of Samsung Group, for an alliance to

deliver IT training in the APAC region. Says Dasgupta, "There are

opportunities abound. But expanding overseas is not easy. One has to make

investments to sustain the business as well as to build the brand. Where is all

the money going to come from, specially during tough times?"

Counters Narendra Saxena, CEO of Xansa, "We have made a foray into the

Bangladesh and Nepal market. Although we do not expect to make a splash now, we

shall concentrate on building our brand." Xansa plans to expand into the

region. Industry experts believe it will be fairly easy to penetrate the

Bangladesh and Nepal market since conditions are similar- a huge addressable

English speaking population.

Factors critical to success

One of the key factors to be successful in the region is to be able to

understand the nuances of the market. The training forays of players like NIIT

and Tata Infotech in these regions have been preceded by allied activities like

software development and systems integration projects.

This has helped them in establishing their credibility as well as forging

other business relationships. Many companies undertake training projects with

corporates and have approached Universities and Governments to form

partnerships. This is a good model as it will not only ensure business for the

company, but help companies gain a foothold in the local market. Aptech has tied

up with Beijing University and IEC Software has signed up with the Malaysian

University.

Both NIIT and Globsyn have signed agreements with the Malaysian Government to

provide IT training in the government sector. Second, it is important to address

the entire spectrum of training needs. Opportunity exists both at the high-end

specialized courses as well as basic courses. Says Rahul Thapan, Head, Training

at Tata Infotech, "The key is to have a comprehensive curriculum catering

to general as well as specialized training programs." Tata Infotech has

also incorporated soft skills as part of its curriculum. Adds Balasubramanium,

"Training institutes need to have a differentiation strategy in every

aspect whether it is customization in local language, delivery model or devising

the content to cater to local requirements."

The Huge Opportunity

Yet, there is no denying that the market is extremely attractive. And a

positive development is the recent initiative by the Infocomm Development

Authority of Singapore to allocate $2.9 million to upgrade the skills of 3,500

Infocomm professionals in critical and emerging areas under the program CITREP

(Critical Infocomm Technology Resource Planning).

Balaka Baruah Aggarwal CNS, New

Delhi