Industry Insight
Vocational Education and Training
August 2008
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Industry Insight - Vocational Educationand Training
PREFACE
With the economy becoming more specialised and the demand for better levels of
specific skills increasing, vocational training has gained greater significance. It is
estimated that during 2006-2010, 71m youngsters will enter the working-age population
in India. Ironically, the country has a huge shortage of skilled people and this talent
deficit is already hampering the growth prospects of manufacturing and services sectors.
The domestic vocational training market stood at Rs11.3 billion (USD250m) in 2007,
which has grown at a rate of 11% over the previous year. The major segments in
vocational education and training business in India include the IT education and training,
manufacturing (various trade related to Industrial Training Institutes) and hospitality
management. IT education and training business is estimated to reach at Rs48.96 billion
in 2011-12. Based on the trends of employability in the industry, aviation management,
retailing, BPO, healthcare deliveries and banking and financial sectors are the emerging
segments. PPP model for improving the status of Industrial Training Institutes (ITIs)
managed under the Government of India during 11th Plan Period (2007-12) has mobilised
interest of some large size corporate groups engaged in manufacturing.
Industry Insight - Vocational Education and Training is prepared in view of the realised
gap between the number of potentially employable people and corresponding training
institutes available to train them. The structure of the report consists of total nine chapters
giving overview of higher education, segmentation of vocational education, profile of
successful IT training and finishing schools, growth drivers, critical success factors,
issues and challenges and outlook. A special coverage is included for ITIs and case
studies for major private parties involvement in ITIs. The report would be useful for
potential investors interested in education sector, educationist, and analysts to keep track
of potential opportunities in new investment areas.
No of Pages - 156
No of Figures - 30
No of Tables -23
Cygnus Business Consulting & Research Pvt. Ltd. 2008
No of Annexure- 4
2
Industry Insight - Vocational Educationand Training
CONTENTS
EXECUTIVE SUMMARY ..................................................................................................... 9
HIGHLIGHTS..................................................................................................................... 14
2. Overview of Higher & Vocational Education in India .............................................. 16
2.1 Introduction........................................................................................................................... 16
2.2 Higher Education in India ................................................................................................... 18
2.3 Public Spending on Education............................................................................................ 21
2.4 Policy Framework and Statutory Bodies......................................................................... 22
2.4.1 University Grants Commission ................................................................................. 22
2.4.2 All India Council for Technical Education Act ....................................................... 23
2.4.3 National Commission for Minority Educational Institutions Act....................... 23
2.4.4 Apprentices Act, 1961................................................................................................. 24
2.5 Vocational Education in India............................................................................................. 25
2.6 Vocational Training Business in India............................................................................... 29
2.6.1 Potential ahead .............................................................................................................. 30
3. Segmentation of Education & Vocational Training................................................... 31
3.1 Present status & trend in different segments................................................................. 38
3.2 Major players in different segments ................................................................................. 39
3.3 Potential areas for training................................................................................................. 42
4. Analysis of Major Successful IT Training and Finishing Companies ....................... 50
4.1 Educomp Solutions Limited ............................................................................................... 50
4.1.1 Innovative Research-based Products........................................................................ 51
4.1.2 QUEST - Quality Education for Students and Teachers Programme ........... 52
4.1.3 Online Tutorials from Home ..................................................................................... 52
4.1.4 Marketing & Distribution Strategy ............................................................................ 53
4.1.4.1 Expansion of Domestic Market................................................................. 54
4.1.5 Marketing Strategy and Distribution Channels ...................................................... 55
4.1.5.1 Smart_ClassTM ...................................................................................... 55
4.1.5.2 Education Infrastructure Solutions ........................................................ 55
4.1.5.3 QuEST programmes.................................................................................. 56
4.1.5.4 Retail segment ........................................................................................... 56
4.1.6 Subsidiaries & Alliances ............................................................................................... 57
4.1.7 SWOT Analysis ............................................................................................................. 59
4.1.8 Analysis of Business Models of Educomp Solutions Ltd....................................... 61
4.1.8.1 Business Model of Smart_ClassTM........................................................... 61
4.1.8.2 Content Development Process ................................................................ 62
4.1.8.3 Process to transfer the modules to the content server........................... 63
4.1.8.4 Process to transfer the modules to school .............................................. 64
4.1.8.5 Smart_Class implementation model ..................................................... 64
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Industry Insight - Vocational Educationand Training
4.1.8.6 Business Model of Education Infrastructure Projects............................... 65
4.1.8.7 Business Model of Professional Development.......................................... 66
4.1.8.8 Business Model of Other Verticals ........................................................... 68
4.1.8.9 Marketing Strategies Abroad .................................................................... 69
4.2 Everonn Systems India Ltd ................................................................................................. 70
4.2.1 Marketing and Distribution Strategy ........................................................................ 70
4.2.2 Value Proposition of the Company .......................................................................... 71
4.2.3 Alliances .......................................................................................................................... 71
4.2.4 SWOT analysis .............................................................................................................. 71
4.2.5 Business Model of Everonn......................................................................................... 72
4.2.5.1 ICT............................................................................................................. 75
4.2.5.2 VITELS ....................................................................................................... 75
4.2.6 Delivery Model of Everonn......................................................................................... 76
4.3 NIIT Limited .......................................................................................................................... 77
4.3.1 Role of NIIT in IT Training ......................................................................................... 77
4.3.2 Marketing Strategy of NIIT ......................................................................................... 79
4.3.3 Growth Plans in India and Abroad............................................................................ 79
4.3.4 NIIT Growth & the Future ......................................................................................... 80
4.3.5 SWOT analysis .............................................................................................................. 81
4.3.6 Business Model of NIIT ............................................................................................... 82
4.3.7 Computer Education courses .................................................................................... 83
4.3.8 Placement Assistance ................................................................................................... 83
4.3.9 Scholarships.................................................................................................................... 84
4.3.10 Program curriculum & Content Development .................................................... 84
4.3.11 Examination & Evaluation methodology: ............................................................... 84
4.3.12 Franchisee model of NIIT ......................................................................................... 84
4.4 HCL Career Development Centre (HCL CDC).......................................................... 87
4.4.1 Marketing and Distribution Strategies ..................................................................... 87
4.4.2 Value Proposition of the Company .......................................................................... 87
4.4.3 Alliances .......................................................................................................................... 88
4.4.4 SWOT analysis .............................................................................................................. 88
4.4.5 Business Model of HCL CDC.................................................................................... 89
4.4.6 Core capabilities............................................................................................................ 90
4.4.7 Infrastructure................................................................................................................. 90
4.4.8 Partner Network .......................................................................................................... 90
4.4.9 Value configuration....................................................................................................... 90
4.5 Aptech Limited ..................................................................................................................... 93
4.5.1 Learning Services........................................................................................................... 94
4.5.2 Training Solutions ......................................................................................................... 95
4.5.3 Strategic Road Map....................................................................................................... 95
4.5.4 Marketing Strategy........................................................................................................ 96
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Industry Insight - Vocational Educationand Training
4.5.5 SWOT Analysis ............................................................................................................. 97
4.5.6 Business Model of Aptech........................................................................................... 98
4.6 IIHT ....................................................................................................................................... 103
4.6.1 Courses & Programmes offered by IIHT...............................................................104
4.6.2 Marketing and Distribution Strategy ......................................................................104
4.6.3 Alliances ........................................................................................................................104
4.6.4 SWOT analysis ............................................................................................................ 105
4.6.5 Business Model of IIHT..............................................................................................106
4.6.6 Franchisee model of IIHT..........................................................................................108
4.7 Accel IT Academy .............................................................................................................. 112
4.7.1 Marketing and Distribution Strategy ......................................................................113
4.7.2 Value Proposition of the Company ........................................................................113
4.7.3 Alliances ........................................................................................................................113
4.7.4 SWOT analysis ............................................................................................................ 114
4.7.5 Business Model of Accel IT Academy ....................................................................115
4.8 Globsyn Technologies Limited........................................................................................ 119
4.8.1 Alliances ........................................................................................................................119
4.8.2 SWOT analysis ............................................................................................................ 120
4.8.3 Business Model of Globsyn.......................................................................................121
5. Critical Success Factors ............................................................................................. 132
6. Growth Drivers .......................................................................................................... 133
6.1 Growth Drivers for IT Training...................................................................................... 133
6.2 Growth Drivers for other Vocational Training........................................................... 134
7. Industrial Training Institutes (ITIs).............................................................................. 135
7.1 Public Private Partnership (PPP) for Upgrading ITIs................................................... 136
7.1.1 Objectives of the scheme .........................................................................................136
7.1.2 Role of Industry Partner............................................................................................136
7.2 Present Status of the Policy ............................................................................................. 136
7.3 Case Studies Reliance .................................................................................................... 137
7.3.1 Bharat Forge Limited (BFL) ......................................................................................138
7.3.2 Jain Irrigation Systems Ltd (JISL)..............................................................................138
7.3.3 LG Electronics .............................................................................................................138
7.4 Benefits/opportunities of upgrading ITIs through PPP for Industry Partners ....... 139
7.5 Industrial Training Institutes (ITI) and Regional Vocational Training Institutes for
Women -Status Quo ................................................................................................................ 140
7.5.1 Core capabilities..........................................................................................................141
7.5.2 Value Configuration....................................................................................................141
8. Issues and Challenges ............................................................................................... 142
8.1 Fragmented Management ................................................................................................. 142
8.2 The Government is not Fulfilling its Role to provide Information on vocational
training ......................................................................................................................................... 142
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Industry Insight - Vocational Educationand Training
8.3 Lack of Implementation of Plans..................................................................................... 143
8.4 Out-Dated Curricula......................................................................................................... 143
8.5 Poor Industry Institution Linkages .............................................................................. 144
8.6 Vocational Training is not Addressing Large Unorganised sector .......................... 144
8.7 Institutions have few Incentives to improve their Performance ............................. 145
8.8 The Quality of Teachers is Poor .................................................................................... 145
8.9 Problems in Funding .......................................................................................................... 145
8.9.1 Public funding for vocational education and training is ad hoc.........................145
8.9.2 The funding model used by the states is largely ineffective...............................146
8.9.3 Although unit costs are high, expenditure on critical inputs remains low ....146
8.9.4 Funding is narrowly focused on publicly provided training ...............................146
9. Future Outlook ........................................................................................................... 147
9.1 Projected Demand & Supply of Market Size ................................................................ 148
Annexure 1..................................................................................................................... 150
Bibliography ................................................................................................................... 150
Annexure 2..................................................................................................................... 151
Annexure 3..................................................................................................................... 153
Annexure 4..................................................................................................................... 156
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Industry Insight - Vocational Educationand Training
LIST OF FIGURES
Fig 2.1: India has Largest Base of Population Below 20 Years, 2007 (m)
Fig 2.2: Indias Large Base of School Going Population by 2025 (m)
Fig 2.3: Structure of Indian Education System
Fig 2.4: India's Education Spending (%) on Par with Rest of the World, 2007
Fig 2.5: Projected Increase in Public Expenditure in Education as Percentage of GDP
Fig 2.6: Number of Students Enrolled in Secondary, Senior Secondary & other Streams
(in million)
Fig 2.7: Training Courses in High Demand as of Dec 2007
Fig 2.8: Number of ITIs Affiliated to DGE&T by State (as on December 31, 2007)
Fig 3.1: Education / Training Cycle
Fig 3.2: Segmentation of Education & Training with Courses
Fig 3.3: Growth of Education & Training Institutions by segment (2007)
Fig 3.4: IT Training Providers Revenues in India (Rs billion)
Fig 4.1: Snapshot of the Online Tutoring Process of Educomp
Fig 4.2: Content Development Process of Smart Class
Fig 4.3: Professional Development Business Implementation Model
Fig 4.4: Business Model of Everon Systems India Limited
Fig 4.5: Delivery Model of Everon Systems India Limited
Fig 4.6: NIITs Education & Training Programmes for Different Consumer Segments
Fig 4.7: NIITs Programmes for Different People
Fig 4.8: Future Growth Segments of NIIT
Fig 4.9: Learning Services at Aptech
Fig 4.10: Flow of Training Solutions at Aptech
Fig 4.11: Strategic Road Map of Aptech
Fig 4.12: Various Business Lines of Aptech
Fig 4.13: Content development lifecycle of IIHT
Fig 4.14: Partner Network of Accel IT Academy
Fig 4.15: Business Model of Globsyn
Fig 7.1: ITIs Distribution in India, 2007 (%)
Fig 7.2: Seat Utilisation against Sanctioned Strength, 2006 (%)
Fig 9.1: Projected Market Size of IT Training Industry (in Rs bn)
Cygnus Business Consulting & Research Pvt. Ltd. 2008
Industry Insight - Vocational Educationand Training
LIST OF TABLES
Table 2.1: Formal Education System in India
Table 2.2: Types of Educational Institutions in India
Table 3.1: ICT Projects and Schools Covered by the Major Players
Table 3.2: Major Players in Different Segments of Vocational Training
Table 3.3: Present Marketing Team Size of Educomp and NIIT (in numbers)
Table 3.4: Workforce Requirements for Various Sectors
Table 3.5: IT Industry Requirements and Graduate Output (in 000)
Table 4.1: The products and services of Educomp
Table 4.2: Aptechs Centres and Locations
Table 4.3: Particulars of various courses offered by Aptech
Table 4.4: Aptechs Four Pronged strategy
Table 4.5: Strategic focus areas of Aptech
Table 4.6: Organization structure of Aptech limited
Table 4.7: Particulars of training programmes offered by IIHT
Table 4.8: Centres and Locations of Accel IT Academy
Table 4.9: Particulars of Course Structure and Fees at Accel IT Academy
Table 4.10: Domestic Programme Cell at Globsyn
Table 4.11: Programmes offered by Globsyn Summer School
Table 4.12: Programmes offered by Globsyn Winter School
Table 4.13: Programmes Offered by Globsyn Retail School
Table 4.14: Programs Offered by Globsyn BPO Academy
Table 4.15: Programs Offered by Globsyn Software Finishing School
Table 4.16: Summary of Major Companies in IT Education and Training
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