News reports reveal that NIIT has been assessed to be operating at SEI-CMM Level 5, the highest maturity level as per the US-based Software Engineering Institute's Capability Maturity Model (SEI-CMM).
NIIT commenced operations in 1981, as an infotech training company to become the ninth largest computer training institute in the world (in terms of revenues). It is India's leading IT trainer with 45% market share, training approximately 100,000 students every year. It plans to move up the IT value-chain by developing software products.
By achieving the SEI-CMM Level 5, NIIT has joined the ranks of nine other IT majors like Motorola, Boeing, IBM, Tata Consultancy Services (TCS), Wipro and Satyam. All the four Indian IT companies in the list have been assessed as operating at this level of quality standards during the current year.
The SEI-CMM accreditation is a globally acknowledged framework for assessing and improving the software development process. Simply put, if a software project is given to a company with SEI-CMM Level 1, the chances of rework that needs to be done to eliminate errors would range from 80-150%, while the same would be less than 7% in case of a SEI-CMM Level 5 assessed company.
The Level 5 accreditation will boost NIIT's image in the international market and it will find it easier to compete with international companies, who have yet to achieve the SEI-CMM Level 5. NIIT's plans to become a major in product development are likely to get a boost as this certification will add credibility to its brands.
Analysts have mixed feelings about the company. A section opine that the company's valuations are too high, and have recommended a 'HOLD'. Another section are of the view that given the company's potential, its valuations could get better and have flagged it as a 'LONG TERM BUY'.
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