e-learning - india as the preferred offshoring destination

8/8/2019 E-learning - India as the Preferred Offshoring Destination

http://slidepdf.com/reader/full/e-learning-india-as-the-preferred-offshoring-destination 1/11

E-LEARNING - INDIA AS THE PREFERRED OFFSHORING DESTINATION

Thursday, 04 June 2009

With training budgets slumping, and the growing need for maintaining a highly skilled workforce, companiesare increasingly turning to incorporating e-learning as a part of their training initiatives. But maintaining e-learning systems within the organization equals more costs. The solution? Outsource, and dont look back.

More companies, realizing cost advantages, are moving from dealing with US e-learning service providers todirectly approaching Indian companies.

Key components offshored e-learning as an industry has several processes that can be outsourced. The various services can be groupedinto the following buckets - content (development and repurposing), technology (tools to create, deliver andsupport content), and services (consulting and support services).

Content: Content development and repurposing are largely offshored, including instructional and visualdesign, programming, and content customization. Companies may decide to offshore pieces of these services,or overtime, by building trust and confidence with their partners, may send their entire content development process to their offshore partners.

Technology: With respect to technology and services, buyers may choose their LMS (Learning Management System) partners from international as well as Indian providers. LMS hosting and administration servicesare also offshored, as these are regarded as back-end support functions which suit offshoring well. Certaintechnology and services related components involving ad-hoc coding and testing are offshored as well.

Services: Among higher value services, training needs analysis and strategic decision making, storyboardingand curriculum design are either done in-house, oroutsourced to an international service provider, but not commonly offshored to India. Cultural understanding and knowledge are required for storyboardingservices, and Indian service providers cite these reasons for not undertaking them. Also, consulting servicesrequire anonshore presence. The larger providers are trying to counter this by operating via a dual-shorepresence, with local resources bridging the perceived cultural differences in the market.

Targeted user segments

The corporate buyers of e-learning (including verticals such as BFSI, IT, telecom, pharma & healthcare) aretargeted most aggressively by Indian providers, followed by the education segment (K-12 through to highereducation, and publishing) and the government (including public administration and education).

Source: ValueNotes Research Report: e-learning Outsourcing 2009 - Advantage India



Service providers of all sizes consider the corporate market to be the easiest to cater to, 91% of whom focus

on this user segment. The education segment requires a high level of subject knowledge and ability to handle

larger volumes of work, which few providers have. The government segment is targeted the least by Indian

roviders, as there are several obstacles in engaging with government agencies, especially in the US. Through

our interactions with the industry, we believe the focus on the education segment will rise in the foreseeable

future, with governments across nations investing heavily in public education.

India as the preferred offshoring destination

The Indian e-learning industry exploits most of the advantages that the country has in favor of its outsourcing

industry. India has a large pool of English-speaking graduates, and specialized talent pools in engineering, IT

and management. The country has also maintained its cost advantages over most other nations. The fallout of

these two factors is that India has the scalability advantage over certain other countries when it comes to

handling large projects.

A number of countries have come up as contenders to India for a share of the e-learning offshoring pie. Eachhas relative strengths and weaknesses against India, makingoffshoring strategies and the overall supply chainall the more complex. China, Singapore, Malaysia and the Philippines are the major Asian countries, apart from India, that take on e-learning projects.


The graph maps out the competitive advantages / disadvantages that popular offshoring destinations havedeveloped in the e-learning industry. These include the quality of relevant resource pools in the country, therelative cost advantage for operations, the scalability factor, and the industry maturity in terms of the numberof years that players in the country have taken on offshored e-learning assignments. ValueNotes then arrivedat an overall assessment of the country, which indicates thelevel of threat that these destinations pose forIndia. From the graph, it is evident that India possesses the maximum competitive advantage as an e-learningoffshoring destination.



Steady growth till 2012 ValueNotes estimates that revenues from the Indian e-l earning offshoring industry stand at approximatelyUSD341 million at the end of calendar year 2008. While the economic recession will impact the growth in theindustry for the next 6-8 quarters, the market will recoup and grow much faster until 2012. Taking thesefactors into account, our calculations place the e-learning offshoring industry to grow at a CAGR of 15% tillCY12.


We estimate the market size for offshoring e-learning services to India to touch $603 million by 2012.

Indian service provider landscape

One of the first providers to focus exclusively on thee-learning offshoring opportunity was Tata InteractiveSystems. For almost a decade, the company had a clear head start. Following its success, large BPOs and KPOs

entered the market, followed closely by publishers.




The market saw an explosive growth after the year 2000, when companies from the IT sector entered the e-learning offshoring market. Interestingly, most of the pure play providers are clustered around this timeframe.

Today, there are well over a hundred Indian companies who claim to provide e-learning services. The Indiane-learning outsourcing industry consists of both, third-party providers and offshore delivery centers of international providers and consulting firms. We estimate that there are no more than 35 e-learningproviders who have more than 100 employees, and over a hundred smaller niche providers.

Industry structure

We have grouped the players in the Indian market based on their service capabilities and maturity - thenumber of years that they have been in the industry, the depth and range of their service lines, the usersegments that they cater to, their relative position on the value chain, the level of scale offered, and their front end capabilities. Our analysis has thrown up 4 distinct groups, including the market leaders in the industry the pioneers. It is their movements that will determine the strategic direction for the rest of the players in the

industry in the next 4 years.

Service

Providers

Providers (a sample) Typical Characteristics

Pioneers Tata Interactive

Systems, NIIT

· High scalability greater than 500

employees

· Early mover advantage

· Multi-country presence and delivery

capability

· Service portfolio at par with

international providers· Few providers in this group

Challengers Brainvisa, Genpact,

etc

· Employee base of 200-500

· Offer comprehensive services to

multiple segments internationally

· Not more than 15-20 companies of this

nature in the market

Contenders MPS eServices,

Upside Learning, etc

· Employee base typically between 100-

200

· Mostly pure play and small techcompanies

· About 30 companies of this nature in the

industry

Specialists E.I. Design, Sudiksha

Learning, etc

· Employee base of up to 100

· Mostly pure play and specialized IT



companies

· More than 100 providers of this nature

in the market


Key trends and insights Providers will target the US market more aggressively: The primary client market for Indian providers isthe US, followed by the UK, the rest of Europe and the Asia-pacific region.


In the next 4 years, close to 47% of the Indian service providers that ValueNotes interviewed, plan to target

the US more aggressively, 24% will focus on the UK, with countries such as Australia, Singapore and the UAE

also evoking interest. Interestingly, 47% of providers are exploring India as a market and plan to release

products for the domestic market in the near future.

Aerospace, aviation, marine and oil & gas are the upcoming corporate user segments: Service providers

want to target the BFSI, IT, pharma & healthcare and retail sectors within corporate, as part of their future

plans. Upcoming sectors include aerospace, aviation, marine, and oil & gas, as they suit the e-learning format

for training purposes.

Emerging technologies include rapid learning tools, Web 2.0 applications: Large providers are

developing capabilities to rival international standards in emerging technologies - with Web 2.0 applications,

tools to develop better/faster/cheaper learning, and high-tech learning environments. Small niche providers

are also developing specialized applications along these lines, such as mobile learning rapid tools, efficient

content management systems, etc.

Acquisitions and strategic partnerships: Acquisitions in the industry will be more in the US & UK (along

with Europe), to gain onshore marketing and/or delivery capabilities. Companies looking to scale up and add

specialized skills to their portfolio will also look to acquire niche players in the industry. There is, however,

more scope for strategic partnerships among providers, both domestic and cross-border, in a bid to offer

comprehensive services to the international e-learning buyer community.



K-12 Education: An offshore bonanza?

Saturday, 02 December 2006

In recent times, the K-12 education market is witnessing significant activity in the US. The US federal

investment in K-12 education has risen from $15 billion in 2000 to $25 billion in 2005.

K -12 or K indergarten to Grade 12 In recent times, the K-12 education market is witnessing significant

activity in the US. This primarily comprises creation of content and assessment tests for K-12 students.

Spurred into prominence by the 'No Child Left Behind' (NCLB) Act, which requires the state to produce

individual, diagnostic test reports of students' progress, this segment is witnessing dramatic growth. The

US federal investment in K-12 education has risen from $15 billion in 2000 to $25 billion in 2005.

State booty translates into huge opportunity

Research firm Eduventures, estimates that the pre-K -12 assessment market could be as high as $2.29 billion in

2006, with maximum growth in state assessment programs.

Some of the large global publishers that have plunged into the opportunity area are NCS Pearson,

CTB/McGraw-Hill, Harcourt and Riverside Publishing (Houghton Mifflin). Other global niche players, which

focus on test development, administration, scoring and reporting of results include:

y Data Recognition

y Measurement Inc.

y ETS (non-profit)

y American Institutes for Research

Looking to build competencies, global publishers are increasingly looking at acquiring niche players, andsome of the recent acquisitions include:

y CTB/McGraw-Hill acquired the GrowNetwork

y ETS bought the Pulliam Group

y Houghton Mifflin acquired EduSoft

Approximately $473 million worth of contracts, which included functions like content development,

psychometric analysis, scoring was outsourced in 2005, says Eduventures

Can Indian vendors tap the opportunity?

Despite the huge global opportunity there is no significant traction in the Indian vendor space. There are a

few vendors trying to service the segments created in the K-12 education industry. The key areas are:

y Study content creation

y Testing and assessment



y Online tutoring

K-12

Segment Current Indian vendors Market Estimates

Study content creation

Brainvisa, Hurix, TataInteractive, C2 Workshop,

Highpoints Learning, Educomp

K-12 online content market in theUS is estimated at over $500

million in 2004

Testing and

assessment Macmillan, Brainvisa, Manya

The pre-K-12 assessment market

in the US was an estimated $2.29

billion in 2006

Online

tutoring

Growing Stars, TutorVista,

Highpoints Learning, Career

Launcher

Approximately $130 million was

spent on online tutoring in 2005 in

US and about one-sixth went to

India's online tutors

Source: ValueNotes Research

Currently, the Indian vendor space catering to K-12 opportunity is highly fragmented. There are no large

players focused onthe US market. Most of the study content providers cater to the corporate as well as K-

12 segments. There is a plethora of homegrown outfits, which thrive on one-off contracts particularly in

the online-tutoring segment.

Testing and assessment is a huge emerging opportunity, which requires considerable scale, experience and

marketing clout on the part of the vendor. Currently there are barely a few in this space, which can drive

and service the opportunity and provide the much-touted offshore advantage.

E-learning: Moving ahead?

Friday, 09 March 2007

Jaguar reportedly wanted to train its dealers across the world prior to the launch of their new version of

cars. Since the training had to be disseminated globally, the company asked an e-learning service

provider to offer a solution. The e-learning company created a CD ROM-based training module in

English/other European languages for dealers across the world. The dealers were trainedsimultaneously and this turned out to be an extremely cost effective and time saving exercise.

E-learning has witnessed a complete resurgence after the dotcom bubble burst in 2001. The growing

popularity of the Internet has bolstered the e-learning initiatives of several global corporations.

Estimates indicate that the current e-learning global market size is over $20 billion, which has grown ten

fold since 1999.



The Indian Scenario

E-learning in India started off primarily with the companies developing software solutions for delivery

of e-learning modules. This was driven largely by the Internet hype. However, when the dotcom bubble

burst, most of them sought alternate revenues. With the growing global demand for content, Indian

companies quickly changed track to deliver 'content' to the international clients - effectively leveraging

the offshore model.

There are well over 50 vendors in the e-learning space in India; some of the leading players include NIIT

Smartserve, Tata Interactive, Lionbridge, Brainvisa, Hurix, Mentorware and Praxis. Almost 50% of

industry revenues are estimated to be from the unorganized sector/small players. While Nasscom has

pegged the growth rate of e-learning at around 25% annually, our interaction with industry reveals that

most of the top players are growing at over 30-50% per year. High growth rates and growing maturity of

players has meant that the industry has attracted its share of VC funding:

Companies Details

Brainvisa

Technologies

Set up in 2000, in Pune currently employs over 400

people. The company is funded by Sequoia Capital.

Hurix Systems

Located in Mumbai and Chennai, employs over 450

people. First round of funding from Kotak Private

Equity fund in 2000. Will raise its second round of

funding in 2007.

Tarang Software

Solutions

Bangalore-based company employs 270 people and

is funded by Sequoia Capital

Harbinger Knowledge

Products

Established in Pune in 1990 and has over 100

employees and looking to expand to 300 by the end

of 2007.

Going Forward

We expect greater consolidation in the e-learning industry, and we believe that the well-positioned and

focused vendors will be extremely attractive acquisition targets for BPO companies looking to add new

capabilities. There have been some significant acquisitions in the past, which are raising the expectations




of the current frontrunners.

y Maximize Learning; a Pune-based company was acquired by publishing major TechBooks in

2005

y Bangalore-based Mentorix was acquired by Lionbridge in 2003

On the other hand, the largest Indian player NIIT recently acquired US-based e-learning company

Element K for US$40 million. Harbinger Knowledge Products has entered an alliance with the US-based

GeoLearning Inc, provider of managed learning services.

Small Players: The Survival Challenge

The E-learning space is vast and largely undefined as an industry. Almost any vertical that is training-

intensive ranging from Airlines, IT, Banking, Healthcare, Publishing or Education has tremendous scope

for incorporating e-learning for their employees, customers, dealers or their core business. And given

the cost and competency benefits offered by India, the offshore potential is huge.

While the large/midsized vendors with adequate funding, visibility and focus will grow or exit profitably; it's the smaller vendors that need to strategize better. Currently driven by low entry barriers,

several of these smaller vendors lack proper focus and could lose out despite a huge untapped global

market. They need to choose a comfortable niche in the huge e-space of learning and build differentiated

capabilities. Vendors with domain specialization, multiple communication skills, and technological depth

will be able to position themselves for a better future.

E-learning: Corporate segment will remain attractive

Wednesday, 11 June 2008

E-learning fundamentally involves dissemination of learning through a variety of multimedia

platforms. Driven by the need for constant upgrading of skills coupled with remarkable growth of

communication technology, E-learning is rapidly gaining momentum worldwide to evolve into an

industry.

Almost any vertical that is training-intensive ranging from Banking, Healthcare, Airlines, IT or

Education has tremendous scope for incorporating e-learning for their employees, customers, dealers

or their core business. The primary customers of E-learning are the corporate and the Education

segments. Corporates use e-learning to impart training courses through the company network while

universities, educational institutions and publishers use e-learning for providing planned teaching and

learning through various multimedia technologies.

Despite being nascent, the E-learning industry has evolved to provide a range of services including

educational consultancy, training needs analysis, content customization, content creation, knowledge

portals, E-briefing, Training partnerships, and monitoring. The exhibit below provides a detailed

description of services involved in E-learning:



Key Service Areas Description

Educational Consultancy /

Training Needs Analysis

y Identification of Training Needs

y Planning enterprise training

y Creating training delivery models

y Course curriculum design

y Support companies in developing their own content

y Selection and training in the usage of the LMS

y Assessment of training effectiveness

Content Customization

y Build a customized solution and develop a training

program around how the organization uses software.

y Focus on the knowledge/ skills needed to perform the

given job

y Training on effective integration of products into

multi-vendor, multi-platform environments

Content Creation

y Define prerequisites for the course

y Custom content development

y Group knowledge and skills into logical blocks andexpand these to meet performance objectives.

y Use the objectives and guidelines to do the

storyboarding and scripting

y Create instructional material with content outlines

y Work out learning tasks, methods and media, and the

detailed content

y Course structure development, review and validation

Knowledge Portals

y Single point of access for the pooling, interaction, and

distribution of organizational knowledge.

y Resides prominently or the learner's desktop

y Links learner directly to the business



Offshoring of E-learning content to India began around 2000. Today the industry has over 100

vendors, with several companies employing more than 400 people - Lionbridge, Tata Interactive,

Aptara, Brainvisa, Magicsoftware, Emantras, MagnaIT, Sify E-learning, NIIT to name a few. Several

vendors have matured and are capable of providing end-to-end services in the e-learning value chain.

The education market is a huge segment with global educational publishing alone at approximately

$20 b currently. However the skills required for providing end-to-end services to the education

segment are more complex and require a greater degree of cultural understanding. The offshore

services in this segment are yet to move higher up the chain. While there are instances of content

customization in the education segment, contracts involving original content development are fewer

and far in between.

Corporate training is also an enormous market expected to cross $19 b by 2009, according to Simba

information. The corporate segment is quick at catching technology trends, some of the recent ones

include: gaming or interactive simulations and handset based training. Moreover, e-learning tends to

be very cost-effective to the corporates, looking to continuously train or retrain employees/customers

across geographies.

Of the two segments in the e-learning outsourcing industry, corporate e-learning will see more growth

going forward. Almost 70% of the Indian vendors cater to the corporate training market compared to

about 47% servicing the Education market. While the capabilities to service the education segment

will continue to evolve for Indian vendors, there is enough to chew in the growing corporate training

pie.

E-Briefing y Organizing training spread over a number places.

Monitoring

y Monitoring the progress of the participant for the e-

Learning programs

y Email-based correspondence, monitoring submissions

and maintaining a good rapport

y Monitored discussions with contribution of

participants can

y Includes generating reports that can be viewed for

necessary action


Source: http://www.sourcingnotes.com/component/option,com_frontpage/Itemid,1/

http://www.sourcingnotes.com/content/view/497/56/

e-learning - india as the preferred offshoring destination

Documents