The automotive industry is undergoing digital transformation as a result of which the global capability centers are tasting more success
The magnitude of change in the automotive industry is extraordinary. From digitization and technological progressions to changing consumer behavior, companies across this value chain are treading new vistas. Amidst these shifts, digitization has emerged as a key trend that could potentially shift market practices and create new avenues for growth in the near future.
India too has witnessed the automobile industry taking up digital innovations that transformed customer preferences and altered purchasing patterns. The Covid-19 pandemic caused companies to seek digital avenues to reach out to their customers, a shift that catalyzed and speeded up the digital transformation process.
The entire automobile value chain, from manufacturers to retailers and the aftermarket spares are exploring and adapting technology like never before, given the impact they play in staying relevant. This tech evolution and the associated ecosystem has enhanced the value of Global Capability Centers, on whom enterprises are relying to improve customer experiences across all auto touch points.
The availability of a large talent pool and the policy support from the government means that a vast majority of global companies are seeking out India as a destination for GCCs. A recent report released jointly by Deloitte and Nasscom, says close to 60 such GCCs came up in India just in 2021 and over 500 could set up shop by fiscal year 2025.
What makes the GCCs so valuable?
The growing focus on digitization has resulted in a majority of automobile manufacturers and aftermarket parts providers relying on their GCCs to find effective solutions.
For those unaware of the ultimate goal of a GCC, here’s a crisp definition – “The goal of GCCs is to enhance business value by embracing a holistic digital transformation strategy. With the help of digital transformation, GCCs drive innovation for the global brands and transform the way business is done by the company.”
Over the years, GCCs have essayed a crucial role in making organizations resilient through a focus on innovations and operational efficiencies. They have moved up the value chain too. From being providers of low-cost services, they are today centers of excellence for advanced digital capabilities.
What’s more, today it is much easier to set up a GCC in India – thanks to a maturing infrastructure and enhanced service partner models and the large talent pool.
India’s rise as a GCC destination
The pandemic compelled many global businesses to set up GCCs in India. GCCs that were started as back-office operations, after two decades are now rapidly becoming an integral part of global business operations of many companies.
Besides these trends, GCC growth in India is also being fuelled by a vast talent pool. Indian GCCs are well-positioned to take advantage of this trend with approximately 80,000 – 85,000 digitally skilled graduates each year and a 30 percent year-over-year growth rate in digital talent, says the Deloitte-Nasscom report.
The unique ecosystem which incorporates academia, start-ups, service providers, industry bodies, prime city infrastructure; and constant government support; has made India a prime GCC destination for major organizations. Furthermore, the Make-in-India initiative has added an impetus to the trend.
This initiative was developed to transform India into a global design and manufacturing hub demonstrating the transformational power of public-private partnership. According to a report by Nasscom and Zinnov, 70% of the GCCs in India are from the US, with Bengaluru and Hyderabad topping their choices followed by Pune, Mumbai and the NCR region.
What’s the way forward for these GCCs?
With industry-friendly policies, a modern technology-ready talent pool, and unique infrastructural setup, India is set to remain the prime contender for organizations GCCs. With its engineering research & development talent pool growing over 11% between 2015 and 2021, the country is set to offer GCC hotspots in several tier 2 and tier 3 cities ensuring better service distribution and lower hiring costs for employers.
India GCCs have paved their paths to future-proof themselves against interruptions and to redefine, realign, reboot, and reimagine their global organizations to thrive in the new normal.
(About the author: Mahender is Managing Director of Advance Global Capability Centre, based in Hyderabad. The company is a provider of automotive aftermarket parts to both professional installers and do-it-yourself customers. He joined Advance Auto Parts in 2019.)