Some might say with all the acquisition activity that’s gone on recently in the business world, it is the time of the merger. Mergers traditionally cause quite a bit of upset or at least some worry, not only for the employees involved but for the customer
August 1, 2006
Some might say with all the acquisition activity that’s gone on recently in the business world, it is the time of the merger. Mergers traditionally cause quite a bit of upset or at least some worry, not only for the employees involved but for the customers who deal with the affected organizations. However, that doesn’t have to be the case with NIIT. NIIT Global, a leader in the IT and IT-assisted training space, will finalize its acquisition of learning solutions provider Element K in the next few weeks, and some say while favorable outcomes are not firmly established, there are indications that the merger will create a number of positive outcomes for old customers as well as enhanced opportunities for new ones.
“I think it actually works great for both companies,” said Cushing Anderson, program director of learning services, IDC. “NIIT needed an infrastructure as an operating body. It didn’t have the software part that it really needed to offer its clients more than simply, ‘We can create content for you and plug it into wherever you go.’ It’s very powerful to have the KnowledgeHub available to the broader NIIT customers. They are very separate entities. Element K is going to be operating at the same peer level as NIIT, I think. The relationship isn’t an NIIT must sell. It’s simply two business units that have the potential to work well to each other’s benefits. NIIT gets the KnowledgeHub and a very strong presence in the content creation space for the IT vendors. Element K gets access to very cost effective custom development resources through Cognitive Arts (a division of NIIT) and also the off-shore capabilities that NIIT has in India.”
Anderson said that although he’s not sure if there are any large scale implications for the learning and development industry in general, NIIT’s acquisition might indicate a new trend where offshore players in the learning space take definitive steps to create a greater onshore presence. “I’m going to look into it, but I’m going to guess that the InfoSys’s and the Tata’s and the guys that typically don’t have an education presence but are a large Indian offshore presence are trying to figure out a way to get an onshore toehold. This is consistent with that move. NIIT, with a large offshore presence, was having trouble getting a growing U.S. presence, and Element K gives them that opportunity. Other large offshore players might consider some sort of training move. We’ll have to wait and see.”
NIIT customers such as Allstate Insurance Company seem to be in favor of the merger. Senior Manager for Education Karen Scott said that Allstate has partnered with both organizations, and that she sees only benefits connected to the acquisition. “We partner with Element K for off-the-shelf primarily to support the Microsoft suite, and we partner with Cognitive Arts/NIIT for custom content development. We’ve never really explored some of the other services that Element K might offer. I know they do custom content development. We really like the co-shore model that NIIT/Cognitive has been able to offer us, and I would say that would only be strengthened with this partnership because they would have even more of a mix of onshore versus offshore.”
“Now, not only do you have services coming from individual providers, you have services coming from providers that have a view on all customer needs,” said Marsha Love Morrow, director of learning and organization effectiveness, Allstate Insurance Company. “This enables us to then service our customers in a way that we haven’t in the past. We’ve been working with both of those organizations recently. Now, it will enable us to use additional services that we’ve started to discuss with them that we previously haven’t had from a consulting perspective.”
“You tend to be less cautious with mergers where they’re somewhat equal and complimentary,” said Dave Groff, chief learning officer, Allstate Insurance Company. “We feel that’s what this is. It’s not about somebody eating a competitor and throwing them away as often happens in mergers. It’s about two forces that have been fairly positively contributing to our work and similar work in other corporations merging to make a stronger whole. I think that’s kind of the value that we see in this thing moving forward.”