Expertus.Com

$12.50 learn fast. work smart. get results. NOVEMBER 2006 INdiA &CHINAINC. Developing the talent for explosive growth Aging workforce worries chinese ceos globAl sourcing drives indian training companies companies strive to fill leAdership pipeline T+D Supplement to Published by ASTD IndiaIndia-based training suppliers are leading theInc. global sourcing charge. By Paul Harris In four modern They work for NIIT, one of India’s largest learning companies. They are also part of a fast-growing segment of “India Inc.,” the term used to describe the coun- buildings in Delhi, try’s phenomenal rise in business process outsourcing (BPO) services that have India, 600 individuals become part of everyday life for Americans. Custom content development is nothing new for the 25-year-old NIIT, which are busily developing counts Sears, SkillSoft, and Microsoft among its longstanding customers. But the company’s stake in the U.S. corporate learning marketplace is new. With its e-learning content acquisition last summer of technology-trainer Element K, which followed its 2003 purchase of Cognitive Arts, NIIT has suddenly become a major provider of corpo- for corporate customers rate training services in the United States. Call it offshoring, outsourcing, or the latest term, “global sourcing,” but there’s from the United States no denying that India-based knowledge BPO companies such as NIIT are becom- ing an increasingly visible part of the worldwide learning landscape. That’s not and other countries. surprising, considering its ability to harness a skilled and inexpensive labor force In several other cities, to provide custom content and other learning services at attractive prices. Other prominent players include Tata Interactive Systems, Aptech, Techbooks, Brainvisa including Mumbai, Technologies, and Genpact, just to name a few. All are eager to serve corporate customers either directly or indirectly through training outsourcing providers. hundreds more Custom content development do the same. Business is good. On the whole, India-based content providers and instructional designers are enjoying a compounded annual growth rate in excess of 30 percent. Fueling this surge is increasing worldwide demand for custom e-learning content—more of it with interactive simulation. And while Indian firms are clearly not the only offshore providers of such knowledge-based services, their prominence is unmatched. Statistics on the sector’s precise growth are hard to come by. But according to a study by the Confederation of Indian Industry, the broad sector of knowledge process outsourcing—of which content development is but a small part—is enjoying a compounded annual growth rate of 46 percent, and will hit $17 billion by 2010. Of that figure, $12 billion will be outsourced to India. 14 | T+D | NOVEMBER 2006 IndiaIndia-based training suppliers are leading theInc. global sourcing charge. By Paul Harris Photo: Getty Images. Getty Photo: Aptech, NIIT, and Tata were each process, and dealing with inevitable Ramachandran views the expan- named to TrainingOutsourcing.com’s delays caused by chronic employee sion into learning services by offshore 2006 list of the top 20 companies in the turnover, and long distance issues, he companies as a logical extension of training outsourcing industry. It is the says. “These business relationships are knowledge-based outsourcing portfo- first appearance for Aptech and Tata on usually driven by the executive team lios that have long included informa- the annual list that recognizes global and not by training managers who are tion technology. It also follows the training providers that are affecting the forced to make them work,” claims growth of transactional HR services, training BPO industry. Another India- Harward. such as payroll and benefits, especially based training company, NIS Sparta, But the impressive growth of Indian as HRO contracts come up for renewal. was recently named to TrainingOut- training companies demonstrates that “Currently, we see more traction sourcing.com’s 2006 list of emerging those hurdles are being successfully in HR-plus-learning than in stand- leaders in training outsourcing. cleared. “Trainers are overcoming the alone learning BPO,” he says. But that Along with price advantages for myth of offshoring,” says Harward. imbalance is rapidly shrinking as more custom content development, there Harward’s advice to buyers: “You’re clients look to expand the scope of are sound reasons for India’s emer- not being objective if you don’t at least outsourced learning beyond the HR gence as a BPO resource, especially get some quotes from these compa- function, he reports. in the United States. Its Western- nies. It’s naïve not to give them a look.” ized culture identifies with the current However, he also cautions: Labor costs Three market strategies American lifestyle; its English-speak- for Indian companies are steadily in- To pursue new business, Indian BPO ing population values education; and creasing and their cost advantages will firms are generally choosing among its democratic, free-market govern- erode over time. three business strategies. One is to ment respects intellectual property. Harward’s advice is echoed by Raj build through acquisition the expertise For U.S. customers, that creates a level Ramachandran, senior advisor at TPI, and presence needed to deliver end- of trust that is unmatched by China, a Texas-based global sourcing advisory to-end services—the NIIT-Element K Russia, and certain other countries. company. He says that while issues approach. Another is to possess suffi- Yet the Indian BPO market can be an such as employee turnover among BPO cient training service capabilities in- intimidating one for American train- firms are a legitimate concern, there house and sell them directly to clients ing organizations, says Doug Harward, are ways to handle them. He says U.S. who are leveraged off a large consulting founder and CEO of TrainingOutsourc- firms also are lured by the “amazing business—a tactic thus far reserved for ing.com. Typical fears include bridging work ethic” of Indian employees and industrial giant Tata Interactive, India’s cultural barriers, managing a critical the steady improvements in quality. largest company. NOVEMBER 2006 | T+D | 15 The third strategy is tal assets than creating to establish joint ven- instructional courses tures with other train- for performing a job. “In ing providers in a hybrid today’s world of converg- offering. This increasing media, such as iPods ingly popular arrange- and cellular telephones, ment typically includes it’s important to lever- a U.S. training outsourc- age digital assets from ing provider to serve as product design to roll- an enterprise consult- out,” he says. Tech-savvy ing partner that controls content developers, such strategy, curriculum, and as Aptech, are poised project management. to exploit this strategy, One such joint ven- he says. ture recently formed Another hybrid part- between RWD Tech- nership has been formed nologies in Baltimore between Dallas-based and Aptech. The ven- BPO provider Affiliated ture centered around Tata Learning Center Computer Services (ACS) one of RWD Technolo- and Techbooks in Fairfax, gies major automotive Virginia. With its recent customers. acquisition of Intellinex from Ernst & Daniel A. Cantwell, Young, ACS is aggressively pursuing RWD’s vice president of content development and other learn- performance solutions ing opportunities, claims Richard G. services, says Aptech Klingshirn, executive managing director operates as the train- of ACS Global Learning. Techbooks owns ing outsourcing provid- Maximize Learning, a content outsourc- er’s offshore partner for NIIT Education Center ing company based in Pune, India. content development. Klingshirn says that the selection He says RWD began its relation- partners, and to jointly pursue growth of Techbooks to serve clients followed ship with Aptech in January 2006 and opportunities in new markets such a lengthy evaluation of offshore provid- proceeded cautiously as the partners as China. ers. His company was impressed with worked through many cultural issues Aptech is equally bullish about the the vendor’s thoughtful processes and and other concerns. Happily, says relationship. Senior Vice President Sur- willingness to make commitments Cantwell, “culture was not as big an esh Narayanan says that hybrid ven- to training and travel. “Techbooks issue as I thought it would be.” Another tures with RWD and other learning maintains standards to communi- pleasant discovery was Aptech’s strong companies demonstrate the promise cate, measure, and monitor perfor- project management culture that of the consortium approach in con- mance—procedures that are important dovetailed nicely with RWD’s. tent development. Not only does the to American companies,” he says. Cantwell says the relationship is model bring value to the customer, but virtually transparent to the customer, the synergistic relationships enable all More than content which is the way it should be. “What’s participating vendors to expand their Although custom content develop- not transparent is the cost savings they reach in today’s global-sourcing envi- ment is clearly the biggest market derive from it—about 30 percent.” ronment, he insists. for Indian suppliers, an array of niche He says the partnership enables Narayanan says the approach typ- learning services also is luring U.S. RWD to hire talent that in the United ically includes at least three compo- customers to India. States would be extremely costly in nents—the enterprise partner, the con- Expertus, a Mountain View, Califor- the price-sensitive learning market- tent developer, and a content library nia-based training services company place. What’s more, he says, the RWD provider such as SkillSoft. “A consor- with facilities in Chennai, India, offers customer “doesn’t have to go through tium can bring in partners on an as- technology and content support, back- the pain of developing and maintain- needed basis, like a constellation with office administration, and analytical ing a relationship with the offshore planets floating in orbit,” he says.

Load more