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Bharat Kumar

Chennai , Dec. 24

MR RAMCHANDER Sukumar recently refused requests from industry folks who wanted to become franchisees for his training business. Mr Sukumar, co-founder and Director, Indium Software, says: "Expanding the training division with franchisees could take our focus away. That's not why we began our training division."

So why did it foray into training? Indium is in the business of testing software. It examines pieces of software to see if they do the things they ought to. Indium's training division offers software testing skills for interested candidates.

The training business not only opens up new avenues for more revenue, it allows Indium to pick its manpower from a pool of trained people.

Additionally, the company saves training cost it would have otherwise incurred.

But expanding the training business with or without franchisees would take Indium's focus away from software. Full-fledged training is a different business altogether. Hence, Indium has "steered clear" of franchisees.

In the last three years that the software industry has seen a slump, small companies have used the training opportunity well.

They educated candidates who are potential staff, and made money doing it while saving on training costs.

Mr Sukumar said that about 15 per cent of Indium's revenues came from the training business last year.

"As our software business grows, so will our training business. We will continue to pick from people we have ourselves trained."

On an average every month, some 10 persons pass through Indium's training rolls. Of these, Indium employs 5-6.

What if Indium had not ventured into the training business? Would the expenses on training its manpower been higher? "I would have spent a significant sum more on salaries since I would have had to pick up experienced people from the market. That costs a bit."

He added that on an average, Indium would have had to pay Rs 10,000 more per month on employing one experienced person, instead of getting revenues of Rs 15,000 from an inexperienced hand seeking training.

That means a net expense of Rs 25,000 per person.

Another company, that is engaged in both software consulting and training, is Maples ESM Technologies.

Mr Rangarajan Sriraman, co-founder and COO, said that 60 per cent of Maples' revenues of Rs 3.08 crore for the half-year ended September 2003 came from training.

"On an average, technology companies across the world spend about 20 per cent of an individual's salary towards training and skills upgrade. For freshers from campuses, companies in India - at least the big five software companies - spend Rs 5-6 lakh on a candidate till he or she can become productive."

Maples offers training in areas such as mainframes, systems programming and applications programming. It employs three of every 10 persons that it trains.

Do such companies still have to invest in training their staff, given the march of technology? Mr Sukumar says, "Eighty per cent of our training needs are taken care of by our own training. We do need new skills and we continue to train inside."

Mr Sriraman says that Maples does not have to invest "much in training, unless we need a very specific skill that we don't already have".

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