12 Aug 09 Making e-learning recession proof_Focusing on India

While India has carved a place for itself in the global e-learning outsourcing segment, it has done so primarily for low to medium value services. Barring a select few Indian providers, the rest are yet to establish themselves as comprehensive providers for learning solutions. Perhaps this is one of the reasons for growing interest among Indian e-learning providers to tap the latent domestic market as a source of business. With the current economic climate affecting primary e-learning client markets (the US and the UK), companies are increasingly diversifying client concentration. E-learning providers are targeting India among countries in the rest of Europe, the Middle East, and Australia as complementary revenue generators.

This leads to the argument of how buyer markets in the US and UK are different from developing countries such as India, especially for a technology driven industry like e-learning. In India, e-learning adoption rates are drastically low for the corporate, academic (schools, universities and continuing education) and government user segments. Service providers may have to alter their entire business approach and services portfolio to cater to the domestic segments, given the many challenges that India presents.

These were some of main topics discussed at the ValueNotes’ executive briefing, following the release of the recent report, ‘e-learning Outsourcing 2009: Advantage India ’.  The event was held at Regus Conference Centre in Mumbai on the 7th of August 2009, and included participation from both service providers and corporate users of e-learning. Some of the attendees were senior executives from companies such as Tata Interactive Services, Cognizant Technology Solutions, Thomson Digital, Zensar Technologies, Patni Computer Systems, Reality Information Systems and Chess Capital Services.

The event started with a ValueNotes presentation on the findings from the study on the e-learning offshoring industry in India. The discussion included an initial macro level scenario mapping for e-learning, and the scope for outsourcing e-learning within international markets. This was followed by an evaluation of the competitive standing of India as an e-learning offshoring destination, against competitors such as China and South Africa. Further, the Indian e-learning industry structure was elaborated upon, including the growth and evolution, the service provider grouping and offshoring maturity for individual e-learning services. The discussion also brought to light the current challenges faced by the industry, including talent shortage, inadequate support from academic institutions, the lack of industry regulation and data security issues. This was followed by trends, insights and opportunities for growth in the e-learning industry that emerged from the ValueNotes study.

Speaking about the domestic opportunities for e-learning, Vinaybabu Manepalli, VP – Training and Business Control, Kotak Mahindra Bank suggested, “If we look at the Small Scale Industries sector, and opportunities for tie-ups with regulatory authorities, the scope for e-learning in corporate India becomes huge. In the banking industry, for example, there are certain certifications that drive up the quality of bankers by more than 500%. Why don’t service providers develop content to address this niche? Subject matter expertise is important in identifying opportunities in the domestic market.” Responding to this, Rajesh R. Jumani, CMO, Tata Interactive Systems, added, “Domain expertise is, in fact, the biggest worrying as well as selling factor for e-learning service providers. It is however true that multi-sector specialization is not possible, and some clients even prefer to use their in-house experts. No e-learning course can be a success unless either the provider or client has a subject matter expert on board.”

Y Srinivas, Chief Manager, Compliance Group, ICICI Bank Ltd. was in agreement with this element of user involvement, adding that Indian service providers must relinquish control of the overall curriculum design, and allow clients to develop some of their own content. He added that it is end users who understand their working environment and industry. This is especially important for a market such as India, which presents unique challenges in implementing e-learning. Ambarish Datta, Head – Technology Aided Learning, Reliance Retail, illustrated further, “India is not America. Our learners are different. We’re behind on technology, and incorporating live virtual classrooms are not a reality for sectors such as retail. The Japanese have a ‘guru concept’ where they must have an instructor to be able to learn – India is similar in learning philosophies. Trends such as Web 2.0 applications for learning… we’re actually light years away from that! Providers have to understand and innovatively cater to buyers’ needs in India. It isn’t the electronic platform/medium that’s important, but the overall blended learning that enriches learners’ experiences.”

Commenting on the impact of recession on the Indian e-learning industry, panelists at the briefing session agreed that while service providers’ price quotations may have come down in the last year, for corporate buyers, e-learning budgets have never really contracted. Rajesh Jumani elaborated, “Nothing is really recession-proof. e-learning has taken a hit from a vendor perspective. In this respect, service providers who are in multiple segments and markets are safer.” Looking at the international market, ValueNotes estimates the growth in offshored e-learning revenues for Indian providers at 15% CAGR, to touch $603 m in CY2012. The trends outlined do suggest that growth will also stem from tapping the domestic market. From the discussion, however, it is evident that the e-learning service mix needs to be customized for it to work in India in the long term.

ValueNotes Research
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