The other highlight of the year was a perceptible shift in course preferences, which, in turn, left training institutes with no option but to rewrite strategies.

Change in preferences
The career segment was badly affected, as there was a decline in demand for software development courses. Students preferred programs linked with globally-recognized certifications, perceived to be better for finding employment. Another discernible shift was the preference for university distance education programs over career programs in software education. This led to branded career programs either being scrapped or being attached with degree offerings. Also, training centers saw a marked increase in demand for short-term courses, as against long-term ones. Ten of the 14 companies Dataquest spoke to registered between 55% and 100% of their revenues from short-term courses.

This changing face of the industry and the compulsion to keep pace forced most of the major IT education players to experiment with product bouquets and offer courses specific to the IT-enabled Services segment. This, in turn, gave a boost to ITeS and BPO training. The change in the industry’s focus towards improving processes and enhancing efficiency and quality levels—largely propelled by the BPO segment—fueled demand for training programs like project management, testing and CMM/PCMM. Again, thanks to the ITeS segment, the balance hung in favor of soft skills training—to enhance customer relations management, talent transformation, multitasking and knowledge and job enrichment.

Though software training majors saw the overall training market shrink, organizations that provide certification-linked programs like Sun Microsystems, Microsoft, Oracle and Cisco Systems registered positive growth. IT corporate training too ran into rough weather, with companies resorting to cost-cutting measures. And, as employee training was low on priority lists, per-person training rates went down drastically. The trend of conducting in-house training programs also compounded the problem.

To stay afloat...
Due to this paradigm shift, most players were forced to explore newer training areas to survive. Many had to rewrite strategies to be in step with emerging trends. Others, who couldn’t do either, were forced to shut shop, merge with or take up the franchisees of larger players. The year gone by reinforced the fact that the mad rush for professional programming skills training, witnessed till a few years back, had waned. This forced the industry to focus on the fundamentals of the business, improve service levels, and create newer products for the emerging hot areas.

The heightened demand for courses to help land jobs forced a number of traditionally career course trainers to enter the BPO and ITeS training fray. Those who didn’t join in and chose to retain focus on the career courses segment had to include newer technology programs for engineers and graduates, like embedded systems, IVRS and e-CRM, among others.

To offer newer technology training, many players entered into tieups and alliances, while some joined hands with foreign universities to offer globally-recognized certification courses. While many players started conducting joint degree courses with some universities in 2002-03, some others offered customized training modules specific to an organization’s needs. For instance, offering an induction program for associates in the ITeS segment worked for the National Institute of Sales; consulting in software process improvement worked for QAI; and training in institutionalizing processes and systems and leadership did the trick for VetriSoftware.

In some cases, like that of DatacraftAsia, the advent of new technologies in the areas of routing and switching, network security, IP telephony and wireless LAN opened up new revenue streams.

The urban-rural divide persists
To ride out the tough times, training institutes charged peak fees in metro and Class ‘A’ centers, while charges decreased by between 8% and 25% in semi-urban and rural areas. Some players like Tata Infotech offered rates that were lower by up to 40% than those of its competitors across all sectors.

Metros and Class ‘A’ cities accounted for the biggest chunk of total domestic revenues. However, some players like Aptech were more active in Class ‘B’ and ‘C’ cities and, accordingly, their revenues came mostly from these cities. Though rural areas still accounted for very little in terms of revenues from IT training, there were players like Webcomtechnolo-gies USA—which garnered 30% of its revenues from rural areas in fiscal 2002-03. Most major players raked in good revenues from overseas operations. The year also saw bigger players opening centers across the globe, especially in West Asia, Latin America and China.

Size does matter
The year gone by also saw some significant tieups and alliances among training providers. The year saw some mergers and acquisitions too—most notable being the Aptech-SSI merger. A new entity was formed following the merger.

In other 2002-03 tieups, Oracle joined hands with Aptech Education. The latter is now a member of the Oracle Workforce Development Program, and is authorized to offer select Oracle programs at its centers. Oracle also forged a relationship with New Horizons to provide certification programs for Oracle’s Internet platform software, e-business suite software programs and technical support services. New Horizons, in turn, teamed up with the Shriram Group to set up training centers.

Those who missed the bus in 2002-03 propose to hop on in the near future. For instance, AmitySoft is looking to tie up with good local brands in various cities to run its training courses. CMC has plans to tie up with training providers in the US for e-learning courses and has already signed memorandums of understanding with universities there.

Plans on the anvil
To face the year ahead, players are planning to consolidate business processes, particularly with regard to the increasing number of tieups with educational institutions. Players are also turning innovative in an attempt to attract students. For instance, Oracle plans to provide easy access to its Oracle Certification Program by conducting mobile testing events in various organizations. This will help professionals appear for tests without having to visit an Oracle center.

Catch ’em young
According to Gartner, another notable growth area in Year 2003-04 will be training institutions for children since the importance of knowing the basics of computer operations has sunk into the psyche of the parent community.

Many state governments, especially in the south, have included computer education in the school curriculum. Karnataka, Andhra Pradesh, Tamil Nadu and West Bengal have been proactive and have already implemented projects on these lines. An increasing number of state governments are realizing the benefits of being computer-savvy and are initiating steps for introducing computer education. And, private schools have also been proactive as far as computer education is concerned.

In demand
Despite the present dilemma and crunch, the outlook for the IT training industry is positive and there’s enough potential for these institutes to survive and grow. At the current rate of growth of the Indian IT industry, there’ll be a sizeable shortfall of skilled professionals in the next five years. As per the findings of a Nasscom survey, the Indian IT services industry is headed for a potential shortfall of 235,000 professionals by 2008. This will translate into ample opportunities for training institutes as well.

Further, it is expected that new segments—most notably ITeS, biotechnology and information security—will open up. ITeS has already stormed the Indian IT training industry and with an increase in IT outsourcing, more demand for skilled manpower in all related areas will be generated. This demand, in turn, is expected to trigger training needs.

According to Gartner, "An emerging opportunity area is the BPO/ITeS skills training area, which will range from simple call center skills training institutions to the more complex engineering, design, international accounting and legal services training, not to mention the opportunity to train qualified medical doctors in remote diagnostic skills." Year 2003-04 will see the maturing of this new area, with growth in consulting services for the contact center industry and Six Sigma consulting and training.

There’ll be increased demand for courses offering a long-term potential and those that help students find employment. Application across environments, networking, software development as well as implementation, IT security, developer skills and quality consciousness (Six Sigma) will be what the future will hold at the higher end of the spectrum. Other high-end courses expected to do well include programs in Smartcard or embedded systems and largescale integration. Besides, opportunities in Linux-based training have started opening up. At the lower end of the value chain, IT literacy programs will continue to be in vogue due to rapid computerization in organizations big and small.

New areas like vocational courses, bioinformatics and verticals like banking and insurance are expected to create demand for domain-specific training. Corporate training, coupled with e-learning courses, is also expected to be a growth area. E-learning has been talked about often, but has remained a mirage till now. However, analysts remain hopeful that increasing Internet usage will cause a paradigm shift in the mode of training delivery—with e-learning being the gainer.

On the whole, three large training segments can be seen emerging—degree programs under distance education; call center training; and international certification education, mainly in hardware and networking. Of course, the drive for basic IT literacy programs can only intensify.

Manjiri Kalghatgi & Neetu Katyal