Training Trauma

Most courses were offered as immediate  job options, as opposed  to long-term career options. They had to fail

The omnipresent Computer Trai-ning Schools that jostled for space in bazaars,

city-centers, commercial offices and residential colonies all over the country

are in trouble. The last decade had seen an exponential growth in their numbers.

That is no more the case. In the last one year the reverse has happened. And the

one question that many of these entrepreneurs are asking–is this the end of

the computer training business?

In the financial year ended March 2002 training industry revenues fell by a

whopping 39% versus a 48% increase in the previous year. A steep fall even by

Niagara standards. Many small players shut shop. A couple of large ones have

planned shutdowns. Even the majors like NIIT and Aptech lost revenues in the

same range. What caused this? Is the industry likely to revive?

The first is easier to answer.

Reason I



The job market fell–or rather disappeared in the aftermath of 9.11, the

dot-com crash and a general loss of infotech hype. Most courses were being

offered as immediate job options as opposed to long-term career-creating

options. When the jobs went bust prospective students lost reason to enroll. The

48% growth became zero per cent.

Reason II



The nineties were a decade of computer awareness. There was this new mystery

tool that would be an integral part of life. Students came in droves to become

computer literate. But in parallel hardware and software vendors made computers

a plug and play device. As computers have become easier to handle the need for

this awareness dropped. Today many users have no need for the help packages that

come with each machine and software package. They just plug in the machine and

start working. Plug and play transited from a marketing slogan to a reality.

Students found that what they learnt was not enough. They could learn even

without paying. The zero per cent growth became minus 25%.

Reason III



The hockey stick growth curve bred many fly by night operators. They charged

but did not deliver. Inevitably the backlash happened. The minus 25% became

minus 39%.

Aftermath



Training establishments had to change tack. Some have launched cost

effective courses. Others have tried to launch courses for the ITeS segment. The

ones with global reach went looking at international markets. So Tata Infotech

has "blended learning programs" which offer instructor based and

computer based training. STG attempts a "dial a trainer" model. Aptech

has a "multi modal" training model. NIIT has its "Swift"

program. Of course, there were many who just downed shutters or changed

signboards–to a different business.

The Future



The manpower needs will re-emerge in a 2-year time span–say by financial

year 2003-04. The excess "inventory" has to be liquidated. Estimates

of surplus manpower vary–from 12,000 to 50,000 people depending on whose data

you are reading. There is no sign however that the long-term shortage has

diminished. It may have been pushed back by a year or two but if the software

growths are to be maintained people will be required. It would be prudent to

ensure that the student supply does not dry up completely. Mass movements have a

momentum of their own. Once they slow down they are difficult to revive.

Students are already turning to what they perceive are more lucrative career

options. Also, the long-term needs and health of this sector need to be

presented to them.

Nasscom estimates that by 2005 1.4 million computer programmers would be

required while the supply would only be 875,000. Worldwide shortages of skilled

workers are also forecast. US has a shortage of 300,000 people, Japan 40,000

people, Germany 20,000 people and Austria 15,000 people. These numbers clearly

indicate that the long term prospects for serious software professionals are

undiminished. Those who stick may actually turn out be gainers at the end of the

day.

But the future needs could be qualitatively different. General purpose

programming skill requirements would get converted to platform specific needs.

All-purpose packages orientation programs would switch to new high-end packages.

In other words specialized courses would survive, general purpose ones would go

extinct. The more intensive 3—4 year program graduates would have takers.

Specialists in e-commerce applications, games development, multimedia

integration, network management, enterprise applications and many similar ones

would be sought after.

New methodologies of providing more cost effective training would have to be

developed. Cost effective online offerings, more customized courses and more

secure placement options would be demanded from the education providers. The

franchisee model would continue but with pressure points. Online offerings could

make franchisees redundant. This model essentially works on a mass model of

standardized entry-level offerings. When the nature of the offerings change the

model will also change. The rumblings have started. They could grow stronger.

With average center revenues dropping to 15—20 lakhs (against the earlier Rs.

30—40 lakhs) earlier financial pressures are mounting–leading to the

inevitable finger pointing.

The training business is not dead. But it certainly needs to re-invent

itself. Like all businesses today.

Shyam Malhotra



The author is Editor-in-Chief, Cyber Media, the publishers of
Dataquest