The GCC sector in India is experiencing exponential growth. According to NASSCOM, over 1,500 GCCs are currently operating in the country, employing more than 1.3 million professionals. The industry is expected to maintain a strong growth trajectory, with a projected CAGR of 12% over the next five years. This growth is fueled by factors such as increasing digitalization, rising demand for specialized skills, and the need for cost-effective solutions.
India, with talent expertise in domains, including technology, engineering, finance, and operations and favorable business environment, has now become the chosen hub for GCCs across various industries.
However, navigating the complexities of the Indian market and achieving sustainable success can be challenging for companies who are based outside the country. That’s where established technology service providers step in, offering a strategic advantage to GCCs. From talent to accelerated GTM the upsides to partnerships with TSPs could be the differentiator for your company. Let’s dive into the details!
What is a GCC?
A Global Capability Center (GCC), also sometimes referred to as a Global In-house Center (GIC), Captive Center, or Global Shared Service Center, is essentially an offshore or nearshore unit of a multinational corporation (MNC). Unlike traditional outsourcing where specific tasks are contracted out to a third-party vendor, a GCC is owned and operated by the parent company.
These centers are designed to centralize a wide array of functions and services that were previously either scattered across different geographies or handled by external providers. The scope of work within a GCC can be incredibly diverse, ranging from:
- IT Services: Software development, infrastructure management, cybersecurity, data analytics.
- Business Operations: Finance and accounting, human resources, supply chain management, customer support.
- Research and Development (R&D): Engineering, product design, innovation labs.
- Niche Areas: Legal services, marketing, data science, and more.
Essentially, a GCC acts as a strategic arm of the parent company, providing specialized skills, driving innovation, and contributing to the overall global strategy. They have evolved from being mere cost-saving centers to becoming vital hubs for high-value work and strategic initiatives.
8 big reasons for the surge in setting up GCCs
Multinational corporations (MNCs) are constantly seeking innovative ways to optimize their operations, harness specialized talent, and drive strategic initiatives. The establishment of Global Capability Centers (GCCs) has emerged as a powerful strategy to achieve these objectives.
Here’s a deeper look into why companies worldwide are choosing to set up GCCs:
- Access to global specialized talent and expertise: Different regions around the world offer concentrations of specific skills and expertise. GCCs allow companies to locate centers in areas where they can recruit and retain highly skilled professionals
- Driving innovation and transformation: Modern GCCs are increasingly positioned as hubs for innovation and technological advancement. These centers spearhead research and development in emerging technologies like Artificial Intelligence (AI), Machine Learning (ML), blockchain, and the Internet of Things (IoT).
- Standardization and process excellence: GCCs provide an opportunity to standardize processes and implement best practices across global operations. By centralizing functions like finance, HR, or IT support, companies can achieve greater consistency, efficiency, and quality control.
- Cost optimization and efficiency: Cost optimization remains a significant benefit to setting up operations in locations with lower labor and operational costs. However, the focus is increasingly on value creation rather than just cost arbitrage.
- Enhanced business resilience and continuity: Geographic diversification of operations through GCCs distributes critical functions across multiple locations, mitigating risks associated with geopolitical instability, natural disasters, or other localized disruptions in any single region.
- Scalability and flexibility: Companies can scale their operations up or down more effectively in response to changing market demands or business needs, establishing more agile resource management and the capacity to expand services or take on new functions.
- Closer Proximity to growth markets: A GCC can also serve as a strategic move to gain a better understanding of and access to emerging or high-growth markets by localization of products and services.
- Intellectual Property (IP) control and data security: Unlike third-party vendors, GCCs are wholly owned and operated by the parent company. This provides greater control over intellectual property, sensitive data, and core business processes.
Business benefits of partnering with established technology service providers (TSPs)
- Access to Specialized Talent: Extensive networks and robust recruitment processes to source and onboard highly skilled professionals quickly and efficiently.
- Accelerated Time-to-Market: Ready-to-use solutions and frameworks that can significantly accelerate time-to-market, allowing GCCs to launch their offerings faster.
- Cost-Effectiveness: Setting up and managing in-house technology teams can be expensive and service providers can help reduce costs by eliminating upfront investments in infrastructure and resources.
- Focus on Core Competencies: Frees up internal resources to focus on innovation, strategy, and customer engagement.
- Risk Mitigation: Service providers have established processes and methodologies for managing risks and ensuring compliance with industry standards and regulations. This can help GCCs minimize operational risks and avoid costly disruptions.
Success at scale: How Service Providers can Drive GCC Success
- Platform development and deployment: A financial institution collaborated with a TSP to build a digital platform for its Indian operations. Leveraging its expertise in cloud computing, data analytics, and artificial intelligence the TSP developed a scalable and secure platform to deliver personalized financial services to customers.
- Operational efficiency and cost reduction: A Fortune 500 company needed to optimize its IT infrastructure and streamline its business processes. The TSP implemented automation tools, cloud-based solutions, and lean methodologies to improve efficiency and reduce costs.
Talent acquisition and development: A leading multinational company wanted to build a high-performing technology team in India. The service provider helped attract top talent, design customized training programs, and foster a culture of innovation.
Picking the right TSP matters
Obidos Labs is uniquely positioned to help you build your GCC requirements, securely, predictably and at scale. We bring:
-Domain expertise in Fintech, Media-tech, Retail and Manufacturing
-Experience in developing solutions focused on Data & AI
-Extensive Bespoke application development experience
-Leverage Own IP (SSA & LoS) and 3rd-Party IP (DevAssure, Facets)
-Fail-fast product development mindset
-Solution accelerators and ethical-ai practices for rapid development
-Development expertise across domains, platforms and technologies
-Cost-effective team setup and quick sourcing of skilled resources
-AI-enabled testing services
Specialized TSPs are a GCCs need of the hour
In the competitive landscape of GCCs in India, established technology service providers play a pivotal role in driving success. By leveraging their expertise, resources, and proven track record, GCCs can unlock new opportunities, overcome challenges, and achieve sustainable growth. The partnership between GCCs and service providers is a win-win proposition that benefits both parties and contributes to the overall growth of the Indian economy.
Reach out to info@obidoslabs.ai for further information