A Harsh Lesson For NetDimensions

When I worked in a large organisation one of the things that relieved the tedium was a nice session of training. This used to come around from time to time, and off we would go to some large classroom in London to be taught how to use our PC or how to spot a customer who might be involved in money-laundering. ‘Be suspicious of anyone who arrives carrying their money in a suitcase’ we were dutifully informed.

The working day would be shorter than normal, the time would pass reasonably quickly, and we would get the chance to sample a different coffee machine and little packets of digestive biscuits and custard creams. What is more, we might even learn something. But now, it seems, these gentle away days are becoming a thing of the past. As if office workers do not already spend enough time sitting in front of their computer, getting a bad back and losing the art of conversation they are now expected to maintain this posture while learning new skills.

How one company’s keeping employees out of the classroom...

‘E-Learning’ has been around for a few years, and has spawned a number of small quoted companies, none of which to my knowledge has been especially successful. But one that is trying to buck the trend is NetDimensions, and I had the pleasure of meeting Rory Stewart, NetDimensions’ Presales Consultant and Chief Financial Officer Jeffery Cheung in London last week. The name of the latter is a clue to the location of this company that has an office in Hong Kong as well as one in Texas. As usual with a software company one has to fight one’s way through the jargon. NetDimensions, the blurb says, is ‘committed to learning and knowledge management technology, but more importantly we are committed to delivering global solutions that produce results for our clients.’

What this means in practice is best illustrated by a couple of examples. One of NetDimensions’ customers is Cathay Pacific and when it introduced a new reclining seat into business class it decided not to summon its three hundred maintenance technicians to a classroom training session, but instead asked them to log on to an online teaching program. In another example, also involving Cathay, office staff must be kept familiar with the airport layout in case of an emergency. Rather than march them around the arrival and departure halls Cathay, with the help of NetDimensions, has created a virtual online tour using 3D imagery.

Having added one hundred new customers last year NetDimensions now serves over five hundred in total and, unusually for a small company, these customers are all around the world. Last year almost half of NetDimensions’ $4.4m revenues came from North America, and there was especially strong sales growth in the EMEA (Europe, Middle East and Africa) region which accounted for 35% of the total. So e-learning clearly has global appeal and is rapidly being embraced by all types of organisation, both commercial and otherwise. Its advantages are clear. It is not necessary to hire classrooms and trainers. Staff do not have to leave their desks for days at a time but can log on and learn during any quiet interlude of the working day. Training courses can de delivered in multiple languages - crucial for a global organisation such as another of NetDimensions’s customers, HSBC - and the otherwise tedious process of learning can be brought alive by graphics and sound and the chance for the student to interact. Finally the ‘attendance’ at these on-line courses can be monitored, and online tests can be devised to make sure that the staff who need to learn are in fact doing so.

This then, is an industry that is here to stay, and various trends such as remote working and internationalisation are driving forces. Another that is very significant is regulation. As we all know regulation is an increasingly heavy and stifling burden that calls for training and continuous monitoring of staff knowledge, and e-learning and testing programs are ideal for this purpose.

The teachers have learned an important lesson themselves

NetDimensions, which is run by its co-founders and holders of 35% of the equity Ray Ruff and Jay Shaw, looks well placed to continue the growth that has seen its annual revenues rise from $1.76m to $4.34m in just three years. What it needs to do now is to make some profits. Having floated on AIM last May at a share price of 62p, which valued the business at a rather ambitious looking £15m, it committed the cardinal sin of failing to deliver on profit forecasts. A warning in January that some contracts had slipped behind schedule saw the stock market take vicious retribution, and today the shares trade at just 12p.

So far, then, NetDimensions does not look like a share that is going to improve the indifferent record of companies in the field of e-learning. But I am not going to totally give up on it. I will stay open-minded. After all, you are never too old to learn.

P.P.S. If you want to follow the insights of a small company investor, and uncover the hidden gems of the stock market, find out more about The Penny Sleuth by clicking here.

^ Back to top

LinkedIn
Twitter
Del.icio.us
Digg
Facebook
Google Bookmarks
Livejournal
StumbleUpon