What are GICs?
GICs – (Global In-house Centres), are also known as Global Capability Centres (GCCs) or Virtual Captives. GICs are offshore centers that perform designated functions and service delivery operations for large organizations or MNCs, typically from low-cost geographies.
To succeed in the digital landscape, CIOs have begun to think globally and consider establishing international teams in talent-rich countries to help their efforts accelerate digital transformation.
GICs in India.
India has had an IT sector since the early 1980s, but outsourcing did not really take off until the early 1990s. IT businesses started outsourcing their back-office work to India after some major international airlines like American Express, Swissair, British Airways, and GE established captive units in India. The sector has developed proven practices through time to provide top-notch IT software and technology-related services.
MNCs have identified India as the top destination for producing high-quality work in a cost-effective manner. In India, GICs are flourishing and getting more prominent over the last two decades. The path to global standards of work and technological innovation is being carved out for top technology professionals in India as more GICs are being established. As they progressively expand their activities across the verticals and generate numerous opportunities, top technology talent in India will have access to it.
Current Scenario of GICs in India:
- There are 1510+ GCCs in India, as of September 2022.
- Across these, there is 1.38 Mn total installed GCC talent.
- Bengaluru continues to remain the top destination for companies to set up their centers in India, with 9 new GCCs set up in Q3 of 2022.
- In Q3 2022, 15 new GCCs were set up in India.
- 85% of the total GCCs established, are in Bangalore, Mumbai, NCR, and Hyderabad.
- 55%+ of the total Healthcare & Pharmaceutical GCCs in India are US-headquartered.
- The GICs in India are generating approximately $23 billion in revenue.
How Emerging Technologies & Evolving Business priorities of Enterprises are impacting GICs?
Technology has become a central & crucial driver for organizations to prioritize and bring change to enable enterprises to contact customers more frequently, across more channels, and in a more targeted way by aiming for a “segment of one” rather than traditional broad segmentation. The Agile technique has superseded lengthy planning cycles which motivate businesses to spend 45% of their IT budgets on initiatives to expand their businesses.
Although each industry has a different commercial focus, yet they all need similar technical capabilities to achieve their digital objectives. These include machine learning, artificial intelligence (AI), IoT, AR/VR, RPA, mobile engineering, and other fields that are in high demand because they touch on all dimensions of developing a successful virtual entity of a company in the digital era. Enterprises are increasingly considering setting up Global Capability Centres (GCC) due to the unexpected demand for talent that has relevance and commitment to the digital transformation process.
Data and analytics have become an analytics center of excellence that generates sustainable competitive advantage for the enterprise in the functions owned by GICs.
Businesses demand technologies like Cloud to enable hyper-connectivity throughout functions and processes, which allows real-time feedback, personalization, and convenience that ensures transparency across departments. GICs in India have been on a recruiting spree due to increased demand for talent well-versed in emerging technologies. As a result, GICs require strong and extensive reskilling programs to retrain their staff in cutting-edge fields including AI, big data, and cloud computing.
GICs as Innovation Hub for Start-up Ecosystem.
India is one of the top five global hubs for tech start-ups, and the nation’s businesses are vigorously adopting the newest technologies. Working with Indian start-ups would be a smart step for GICs to accelerate the innovation agenda and stay up to date with the newest technologies available. Start-ups are now associated with innovative thinking, zeal, and a desire for disruptive vision. These qualities are desired by large organizations, although only a few had much success in achieving them.
Start-up businesses often feature flat hierarchies and a light structure, which allows them to operate in a quick and agile manner, which can benefit from the parent organization’s size, subject-matter knowledge, and access specialists to speed up their processes and produce a more polished, market-ready result by partnering with GICs.
Further, considering the large number of start-ups working to create solutions tailored to particular industries, GICs can not only innovate within their current business practices but also directly increase their companies’ revenue. Prototypes of the solutions can be developed in the setting of the GICs and delivered to the larger company. For Indian GICs, these are exciting times. The benefits of partnering with start-ups are exponential, but GICs must also be willing to embrace failures along the way and consistently seek out new opportunities through experimentation. GICs would ultimately be better able to manage turbulence, make wise decisions, and keep innovating with a well-designed risk mitigation plan.
Leveraging Digital Transformation with domain-specific Tech Talent.
Global CIOs are seeking for GICs to increase domain knowledge and the caliber of leadership, making organization and talent crucial enablers. GICs should excel at this by utilizing effective talent-sourcing strategies, robust leadership development programs, and a culture that prioritizes the needs of the client.
Companies have been adapting over the past few years to a business environment that is changing quickly because of both the expectations of customers and staff. Now that 2023 is here, it is time to take decisive action. You can boost your Digital Transformation journey while reducing costs if you have the right technology, tools, and people to help you reach your maximum potential.
Functions like finance, HR, procurement, and IT, which GICs have supported for decades, are already being impacted by emerging technology. Before becoming redundant, businesses must learn to embrace disruption and recognize newer opportunities and places that could put them on a tactical path as a leader in a specific domain.
GICs gradually develop into centers of excellence by using their extensive domain knowledge and end-to-end process expertise to fully own operational excellence. GICs are taking on new challenges in the face of the arrival of disruptive digital technologies, greater complexity, and available opportunities.
As Sapan Choksi, CEO of Systems Plus says, the key to driving transformation is strengthening digital, analytical, and technological capabilities.
He explains that GICs are emerging as centers of excellence (CoE) for innovation and that digital and technological innovation are the new levers of growth for GCCs. In today’s world, Sapan adds, no organization can remain tech-agnostic, irrespective of its nature/line of business. Post-pandemic, organizations have an even higher push to offer their products and services in an omnichannel, seamless, anytime-anywhere manner. These trends push for the case of GICs.
What does it take to attract top talent? Flexible working hours, including the option to work from home or in a hybrid setting, as well as market-competitive salary, rewards, and perks. In such cases, GICs have them all.