What Are the Main Attributes of India-Based GCCs?

The idea of global capability centers (GCCs) has grown remarkably in the last few years. 

In the beginning, multinational companies (MNCs) set up offshore facilities to manage their low-value business processes. This offshoring was done to primarily gain a cost advantage. They looked for places where cheap, educated, and skilled labour pools were available to set up these offshore facilities. 

These facilities then evolved into shared service centers for research and development, human resources (HR) management, innovation, and business transformation. 

But in recent times, MNCs have focused on setting up GCCs. These are world-class centers of excellence that help MNC lead their digital transformation strategies led by innovation and technology. New competencies and capabilities are developed, nurtured, and scaled up in these centers.

GCCs are an emerging force

The evolution of GCCs in India is supporting the growth of the country’s economy in a big way. GCCs are home to people who possess skills in many cutting-edge technologies like artificial intelligence (AI), machine learning, deep learning, virtual reality (VR) and augmented reality (AR). Each MNC has invested in its GCC becoming a technology-based center of excellence. A GCC is where an MNC’s digital transformation strategy gets implemented. Resultantly, the focus is on using innovation and technology to design new-age products and services. 

By FY 2025, India is expected to have close to 2,000 GCCs representing a market size of USD 60 billion. These GCCs may well be employing about two million professionals by then. 

What makes India attractive for setting up a GCC?

A fundamental reason for this growth in GCCs in India is that MNCs find India’s workforce to be technically qualified and skilled. Plus, the costs of doing business in India are much lower than in several other countries.

Specifically, several industry bodies list the following themes as being significant for India’s leadership of the GCC space:

• Next-generation talent is widely available across India.
• Innovation and the ability to scale up operations quickly in India can drive growth.
• India is leading a wave of digital transformation agendas – effectively. 
• India offers to support business ecosystems wholesomely. 
• Lower operating costs, and a highly skilled workforce, enable efficient experimentation. 

Seizing the opportunity

MNCs are considering these additional factors to seize the opportunity in India:

• After the pandemic, markets and operations hubs of most MNCs have assumed a truly global character. India’s high-quality, cost-efficient, workforce is a big draw for companies to set up GCCs in India.
• With India leading a wave of digital transformation, MNCs are keen to set up their technology centers of excellence here. 
• Again, as a fallout of the pandemic, millennials are choosing to work closer to their families. This is leading to a boom in infrastructure in tier-2 and tier-3 cities in India. Companies are finding it cost-efficient to set up their infrastructure in these cities.  

On the flip side, MNCs are also concerned about the continued availability of talented professionals. With the digital transformation agenda in India gaining impetus, there is a great demand for qualified and skilled people. MNCs are pushing the Indian government, industry bodies and academic institutions to help bridge the demand-supply gap. 

GCCs in India are adding huge value

When set up with focus and foresight, a GCC in India is capable of being a huge asset for an MNC. Here’s how:

• This is because India has a large pool of people who are trained in data analytics, cloud services, financial planning, treasury management, sustainability, logistics and warehousing, research and development, and in core engineering disciplines. According to a report published by NASSCOM, GCCs in India are already playing the role of core technology hubs. Niche skills available in India-based GCCs for MNCs also include Web 3.0, Digital Twins and Metaverse.  Also, India’s ability to offer new-age technologies like robotics, business intelligence reporting and people analytics makes it possible for MNCs to make the GCCs their digital transformation hubs. 
• Most MNCs are able to embed their values and culture in these GCCs. They leverage this opportunity to have the GCC embrace their standard governance policies and protocols. This makes an India-based GCC an extended arm of the MNC – and this happens almost seamlessly! 
• A GCC also becomes an MNC’s centrally-managed center for operational excellence. The GCC then leads the MNC’s global transformation agenda completely.
• GCCs in India are also, interestingly, going beyond the cost-benefit paradigm. They are now being seen as a must-have operations center for MNCs. Which is, if an MNC does not have GCC in India, it is perhaps missing out on an opportunity to create huge value. This paradigm shift has been possible only because MNCs have seen the possibility of using India’s talent pool, of leveraging India’s technology and infrastructure, and combining the two through astute leadership to create a competitive edge for themselves. This basically means working with the available high-quality talent and making them better, sharper, performers. It also means building a great culture of excellence at their GCCs. And then the MNC will successfully leverage these two new competencies to establish market supremacy.

Conclusion

Doing business globally requires more than just economies of scale. It needs companies to have high-quality talent, be agile and be technologically superior in all aspects. Having a GCC in India offers MNCs the possibility of having these distinct advantages. India’s young workforce is both skilled and agile. And the business ecosystem thrives on cutting-edge digital technology and platforms. Having a GCC based out India is no longer a prudent business choice, it is a must for any company wanting to succeed in the global marketplace. 

People also ask:

1. Why are GCCs important?

GCCs drive emerging technologies and ideate on breakthrough opportunities, thus becoming the catalysts of transformation for their respective organisations.

2. What is the role of GCCs?

GCCs are increasingly becoming critical in leading innovation and also as business drivers. As the focus has largely shifted to digitization, companies across sectors are relying on GCCs to find efficient solutions.

3. What are the four main objectives of the GCCs?

• India’s ability to offer new-age technologies like robotics, business intelligence reporting and people analytics makes it possible for MNCs to make the GCCs their digital transformation hubs.
• Most MNCs are able to embed their values and culture in these GCCs. They leverage this opportunity to have the GCC embrace their standard governance policies and protocols.
• A GCC also becomes an MNC’s centrally-managed center for operational excellence.
• GCCs in India are also, interestingly, going beyond the cost-benefit paradigm. They are now being seen as a must-have operations center for MNCs.