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GCCs: Key Drivers for Maximizing Effectiveness and Alignment in the Digital Transformation journey
GCCs: Key Drivers for Maximizing Effectiveness and Alignment in the Digital Transformation journey

June 21, 2022

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India is no longer the place where Global Capability Centers (GCCs) are set up merely from the standpoint of cost-effectiveness. Today, India is a popular destination for instituting GCCs that are becoming shadow headquarters (HQs) and are owning more functions, creating innovative products, formulating and implementing best practices, engaging in capability development, R&D, as well as market and business development, leading to greater accountability and responsibility. In fact, an increasing number of parent organizations are making substantial investments in the leadership in GCCs that can own certain design, architectural decisions as well as technology. There is a remarkable shift from the traditional role of GCCs acting solely as executioners and support services to the Headquarters, to now transforming into global R&D centers and digital tech Centers of Excellence (CoEs).

Axiomatically, India today is of the leading Talent and Innovation hubs with respect to GCCs, housing more than 1,400 capability centers hailing from various global enterprises with a total installed talent of over 1.38 million and a total GCC Market Size of USD 35.9 billion by the end of FY2020-21. The Nasscom-Deloitte June 2021 report on GCCs titled ‘GCC value proposition for India’ predicts the GCC market size to grow up to USD 60-85 billion by 2026.

Further, in the first quarter of 2022 (January 2022 – March 2022) itself, 20 new GCCs have been added, the majority of which have been established in Bengaluru (7) and Hyderabad (6) and hail from US-headquartered organizations. Moreover, considering the breakneck speed at which digital transformation is being adopted and embedded in organizations today, accelerated by Covid-induced disruptions, it is no surprise that even though we are nearly a little over 2 years into the pandemic, in Q1 2022, more than half of the GCCs established in India were from the software and internet sector vertical, followed by BFSI and automotive.

With digital embedment at their epicenter, the 5 key levers for GCCs that can help them maximize effectiveness and alignment with the parent enterprise in the digital transformation journey are as follows:

ABCD

1. Resource allocation

Dedicated personnel possessing the right set of skills, as well as clearly outlined and communicated adoption goals, help each branch of the GCC/CoE train their staff to support, communicate effectively, and partner with the parent organization in the adoption and implementation of broader digitalization goals.

2. Communication

Driven by Intrapreneurial leadership, GCCs can transition into 'Innovation Hubs'. Establishing clear, open, and effective communication channels so that the GCC/CoE can support, contribute to and eventually replicate the success of the parent firm in the digital transformation journey is paramount.

3. Enablement strategy

Accessibility and understanding of how to utilize the digital solutions in their daily business processes is a must for the GCCs to truly embrace and imbibe digital transformation at the core.

4. Assistance framework

GCCs need to act as a robust support system to the parent enterprise in the digital transformation journey by providing accurate and timely feedback on key success metrics measured and tracked to calibrate digital progress. They can also enable adequate and timely support with skilled talent and insightful data.

5. Governance

The timeless quote by management guru Peter Drucker - ‘What gets measured, gets managed; what gets managed, gets executed’ holds true for GCCs too. A robust governance model needs to be instituted at the GCC level to provide a broad framework that keeps the other four pillars in sync with the overall digitalization goals of the organization and underpins structured and coherent decision-making.

From Doers’ and ‘Optimizers’, mature GCC centers are now evolving into ‘Process Owners’, ‘Innovators’ and ‘Transformers’ as they are scaling up high-value work across digital, automation, analytics, etc. The GCC ecosystem has not only survived but in practice thrived and displayed an ‘anti-fragile’ ethos even through the tumultuous time of the pandemic. Resurgence and resilience are two words we can thus, confidently associate with the growing GCC community.

 

To know more about GCCs, please download the following reports available at the below-mentioned links:

INDIA GCC TRENDS QUARTERLY ANALYSIS Q1CY22 –

Website: https://nasscom.in/knowledge-center/publications/india-gcc-trends-quarterly-analysis-q1cy22

Community: https://community.nasscom.in/communities/gcc/india-gcc-trends-quarterly-analysis-q1cy22

GLOBAL CAPABILITY CENTERS IN INDIA: A PILLAR OF STRENGTH IN INDIA’S HOLISTIC SOCIO-ECONOMIC PROGRESS –

Website: https://nasscom.in/knowledge-center/publications/gcc-value-proposition-india

Community: https://community.nasscom.in/communities/gcc/global-capability-centers-india-pillar-strength-indias-holistic-socio-economic

GCC INDIA LANDSCAPE – 2021 & BEYOND! –
Website: https://nasscom.in/knowledge-center/publications/gcc-india-landscape-2021-beyond
Community: https://community.nasscom.in/communities/gcc/gcc-india-landscape-2021-beyond

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Prerna Buckshee
Manager - Research

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