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Software Testing: NIIT Technologies Investing in IPs and New Offerings

NIIT Technologies recently briefed NelsonHall on its testing capabilities.

Headquartered in Noida, NIIT Technologies had FY 2014 revenues (ending March 31, 2014) of ~$389m, with an operating margin of 15.2%.  H1 FY 2015 revenues were ~$189m. Headcount at the end of H1 FY 2015 was 8.7k.

The company is an unusual Indian Outsourcing Service Provider (IOSP) with a specialization in servicing clients in the transportation & travel sector (37% of revenues). Also, within BFSI, the company is more active in insurance (19%) than in banking & financial services (15%).

NIIT’s client base is almost equally shared between the Americas (42% of revenues) and EMEA (37%). NIIT is largely an application services-centric vendor (82%, of which ADM: 63%, IP/assets: 9% and systems integration and package implementation: 10%), with IT infrastructure management and BPP representing 13% and 5% of revenues respectively.

In FY 2014 NelsonHall estimates NIIT had revenues of ~$35m from testing services (~9% of its overall revenues). The client base for testing services is balanced, with the Americas accounting for 42% of revenues, Europe and APAC (including India) each at 29%.

Key testing clients include an ISV servicing the airline industry (involving ~140 NIIT Technologies personnel), and a GDS vendor (~100).

Testing is a horizontal line within NIIT’s ADM organization, providing personnel, best practices, knowledge of tools, and creation of IPs and accelerators.

NIIT’s testing practice has headcount of 1k (~12% of total NIIT headcount). Delivery is either on the client site or from the company’s centers in New Delhi and Noida. The practice also has presence in Bangalore.

NIIT’s testing practice has the overall company vertical focus, with an emphasis on travel & transportation, and in particular the air transport industry, insurance (both L&P and P&C) and, to a lesser extent, banking & financial services.

NIIT testing services include:

  • Basic services such as functional testing, including integration and regression testing as well as ‘business testing’ – e.g. business process-based application testing; one such example is testing the website of a large U.S. ecommerce client for ordering goods
  • Specialized testing services, including non-functional, test environment and test data management, cloud & SaaS, SOA/agile testing, mobile, data warehousing, and SOA
  • Test automation and tools, including tool evaluation and deployment, automation feasibility analysis, progressive automation and management
  • TCoEs, including test advisory services, roadmap enablement, managed services, testing as a service, product testing, SAP and IT infrastructure testing. While still very small, NIIT is seeing rapid growth in its TCoE services.

Reflecting its sector specialization, the testing practice of NIIT has a number of specificities including providing UAT services, especially for a number of key applications including those used in the airline industry.

NIIT’s portfolio of testing IPs includes:

  • Test Automation Scorecard, a consulting-led methodology to assess application portfolio and identify candidates for automation. Engagements typically last 3 to 4 weeks
  • ASE2T: a scriptless automation framework, based on objects, as well as test case repositories (currently available for GDS systems, the commercial airline industry and HR workforce management). ASE2T was developed based on work testing an airline booking engine. It integrates with HP QTP and Microsoft Excel
  • A tool to optimize test coverage while lowering number of test cases, based on orthogonal array statistical techniques
  • A risk-based testing framework for regression testing purposes. The framework is based on work that NIIT has done in identifying key business processes in the commercial airline industry, and in the insurance sector
  • A test data generation tool, used mainly to provide its commercial airline clients large volumes of data (e.g. airline flight numbers, card payment numbers) that can be generated and erased quickly.

NIIT has developed new testing contract structures and pricing models and has provided these for one year now. Examples of such pricing models include:

  • On demand services: where NIIT provides flex teams (based on a core team of testers with ramp-up and down of additional personnel)
  • Outcome-based pricing, e.g. price per test case designed, automated or executed; schedule adherence; and number of defects (by severity level) found in production.

The company is also focusing its commercial effort on the following models/offerings:

  • TCoE/testing as a service (including hosting of testing COTS)
  • IT infrastructure testing: NIIT has developed a methodology for assessing the impact of changes of IT on the client’s IT infrastructure, e.g. migration to a new OS, adoption of cloud computing, or migration of a new network
  • Continuous delivery (DevOps). To address this opportunity, NIIT is training developers in becoming full-time testers and helping deploy code on to production
  • Digital business testing: addressing as a priority the airline and BFS industries.

In summary, despite its relatively small size in testing, NIIT is a very credible player in testing services. Specifically:

  • It is able to service relatively large programs (up to 150 personnel involved in delivery), most probably because of the company’s long-lasting relationships with key clients, which over time have expanded in terms of service scope and size
  • Specialization in services is important, and in this regard NIIT is a multi-specialist testing vendor with capabilities around GDS systems, commercial airlines overall, and pockets of other capabilities in asset management banking and retail
  • Investment in IPs and tools is a must, and NIIT, along with other Indian vendors, generally understand this well and were the among first to promote IPs and tools heavily.

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