Global Capability Centres or GCCs are now playing increasingly important roles and driving end-to-end support in complex task areas. In the post-pandemic era, in particular, the scope of GCCs has expanded to offer critical business impact that goes beyond cost reductions and operational improvement. According a NASSCOM report, the revenue garnered by GCCs is slated to reach $60–85 billion by 2026. Moreover, GCCs are now considered as the key strategic business partner of their parent organizations.
In an interaction with CXOToday, Kamal Sharma, Sr. Director, Digital Transformation, Carrier Digital Hub India explains how MNCs’ perception about GCCs are shifting to more than a ‘back-office’, the evolution and the future of the GCC sector in India, and the trends to look out for in 2023.
- How has the GCC sector evolved in India in the past year, and what are some growth opportunities to look forward to in 2023?
The year 2022 has been a resounding success for GCCs in India with the number of GCCs reaching over 1500 and industry growing at 11% CAGR. There’re two significant developments that took place along this impressive growth. First, GCCs emerged as strong players despite the challenges of the last couple of years. The Covid-induced disruptions forced as well as provided them with an opportunity to develop new working models by effectively applying remote and hybrid working models. Second, regardless of the working model they adopted, the need for collaboration (be it online or in person) became the norm for ensuring business continuity. These two evolutionary developments can be attributed to changes in the dynamics and the maturity of the GCCs in India. Today, the maturity landscape of GCCs is evolving at a rate where extraordinary opportunities are opening up. We’re leading the world with 45% of the global GCC market share, and 500 new GCCs are expected to open in the next couple of years. I think there’s a huge opportunity for India to become the world capital of the GCCs.
2. As MNC’s perception of GCCs shift across the world, what are some trends to lookout for in India?
In the early 2000s, India was a preferred location for setting up what was then called a body shop, back-office, offshore, or captive centre to deliver business process services to big MNCs at a reduced cost, but that did not result in or create value. It is when these centres transformed into capability centres, their true value started to show up. This is where the perception of GCCs is changing from being a back office to becoming strategic value centers with multi-functional portfolios, and it will continue to change as far as GCCs in India is concerned. The organizational culture is another area where you could see a shift in perception. Culture used to exist in early phase of GCCs growth, but it hadn’t earned its rightful place in an organization’s core strategy. Fast forward to 2023, culture is becoming an absolute essential and an enabler of the growth of an organization.
India was somehow always associated with a price-tag and known for its low-cost services. Thanks to the maturity level GCCs have gained, MNCs are today looking at Indian GCCs to drive innovation and future transformation of the businesses. Earlier, captive centres used to work on conventional technology areas like testing, infrastructure, and ERP etc., but in the recent years, GCCs portfolio has dramatically expanded, and they’re working on core technological domains inter-alia like cloud, product development, innovation, R&D, mobility, CX, CRMs, and hyper-automation. We can say Indian GCCs are evolving into “true sense hubs.”
3. As the demand for talent increases, there is now greater focus on upskilling/reskilling. What is the significance and what are some ways GCCs can help upskill their employees?
Upskilling to me means preparing our workforce to stay relevant in an industry where both technology and skills are constantly upgrading. Identifying that how is the first step towards achieving that goal, after which you can align your upskilling programs. However, you cannot implement a program if your culture does not accord skilling or upskilling its due respect; it must be infused to your culture. There is an unprecedented demand for new skillsets for the workforce of the future and GCCs can invest in reskilling/upskilling their employees and include such programs as a vital component of their Employee Value Proposition (EVP).
4. What are some obstacles to growth for GCCs and how can businesses overcome them?
Today, the GCCs have a once-in-a-lifetime opportunity to take on the challenge of rethinking their conventional value proposition, which will fuel their enterprise for the next level of growth. They can achieve this by taking the ownership of functions and driving innovation as a strategic lever to fuel enterprise’s competitiveness, and transform themselves into a value-driven extension of the enterprise. As GCCs look to re-align themselves with the changing business paradigms of the future, the first and most critical factor influencing how much the GCC or the capability centre will grow or succeed is how you position it in your respective organisational strategy. To do this, GCCs will need to look beyond the glaring concerns of the moment and find solutions to problems that are more related to the future. For instance, GCCs are already engaged in a war for talents. In such an uneven talent market, GCCs must consider more than just winning this battle once and onboard ‘enterprise talent’ with the potential of becoming future global leaders for a long-term success.
5. Can you offer some insights on Carrier DHI’s value proposition?
Digital Hub India is a rock-solid fabric of Carrier’s overall vision. We are a model capability centre where culture is the first capability we have built and on which our strategic organizational goals and objectives, programs, initiatives, talents, financial fitness thrives. Businesses typically focus on a variety of things when they first set out on their journeys. However, in the case of Digital Hub India, we set out on a course to become a capability centre that creates value and establishes long-term goals from the beginning. We are a distinctive capacity center where we are creating all organizational constructs of a GCC under one roof, starting with product mindset, product innovation and development, centres of excellence (CoE), and shared services hub with a highly specialised and personalized leadership focus to grow it towards a high-impact maturity.