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Global Capability Centers and IT Services Providers in India - Moving From Hungry me vs. Hungry you, to Hungry Us
Global Capability Centers and IT Services Providers in India - Moving From Hungry me vs. Hungry you, to Hungry Us

January 1, 2025

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About 25 years ago, when I first joined the IT services industry, optimism was high in India. IT Services organizations were expanding rapidly, hiring more people, and taking on complex projects traditionally handled by clients themselves. "Offshoring" and "Global Delivery Model" were buzzwords as we increased our footprint and financial share with Fortune 500 clients.

A senior leader in his farewell address remarked that engaging with clients on offshoring and global delivery had not felt like a job, but more like being part of a mass movement. This perfectly captured the spirit of that era. It wasn't just about revenue or profits; it was about promoting a new project execution model that benefited both our clients and ourselves.

Fast forward to today and there is again a similar sense of optimism and growth in Indian technology services, and this time Global Capability Centers (GCCs) are receiving significant attention. Currently, India hosts over 1600 GCCs, with expectations for this number to surpass 2000 within the next few years. The term "captive" is now considered outdated, as it 

implies a servile and order-taking mindset. Conversely, the term "Global Capability Center" highlights the significant enhancement these centers bring to their parent organizations' capabilities. As a result, the Indian technology services landscape has seen a massive shift. A major tipping point was in 2023, when the combined manpower hiring by GCCs exceeded the hiring made by leading IT services consultancies. This included both lateral and fresh hires. Today, large GCCs have strong hiring engines and are competing with services firms for talent! That is good news for anyone working in technology.

I see three big positive steps that GCCs are taking -

 

  1. Global organizations with a Global Capability Center (GCC) now allocate a significant portion of their overall technology workforce to the GCC. The center in India is not a minor or specialized team; it plays a crucial role in the organization's talent acquisition and execution strategy.
  2. GCC employees now hold global leadership roles, with India-based leaders managing teams worldwide, including teams in the US and Europe. There is no career ceiling in a GCC now!
  3. GCCs are involved in emerging-technology and advanced PoCs in areas such as Generative AI. The range of projects that India centers now anchor, goes far beyond traditional 'support' engagements and 'non-strategic' systems. 

     

GCC leaders frequently present proposals to their parent organizations to undertake additional responsibilities. Often, peer GCC leaders contribute by illustrating to the global leadership the kinds of work they are effectively managing. This cooperation occurs even when the respective parent organizations may be competitors in some international markets. Such a collegial atmosphere is a significant factor contributing to the growth of GCCs.

 

The Future

GCCs are hungry for growth and strategic significance - and so are services firms. In earlier years there was a tendency for GCCs and services firms to view each other with suspicion and mistrust. But this mindset is rapidly disappearing. A GCC CEO told me recently, "It need not be Hungry me vs. Hungry you. How can we collaborate, deliver value to my global organization and become Hungry Us?" 

The very fact that such conversations are happening indicates that there is a positive momentum building. Here are some thoughts on how we can continue to progress, to a "Hungry Us" collaborative model -

 

  • More coverage by service providers - Service providers should acknowledge that GCCs are important clients without any exceptions - the lingering tendency to view GCCs as competitors should be eliminated. To achieve this, service providers should invest in senior-level relationship management coverage in India. An example of this practice is my organization, which has established a strong India-based relationship management team and is continuing to expand. 
  • India-based leadership connects - GCC leaders and Service Provider delivery leaders are often based in the same city in India. But, their meetings happen more often than not, when some senior leader from the parent entity visits! How good it would be, if there was a regular set of interactions between leaders. The responsibility for this lies on both partners. 
  • GCC managers should adopt proactive measures. Often, these managers operate at the level of merely requesting resumes and personnel. It is essential for them to invest time in comprehending the full scope of service providers' capabilities, which extend beyond mere resourcing. No GCC can achieve complete self-sufficiency; therefore, it is incumbent upon GCC managers to identify partners who can complement and enhance their existing capabilities.
  • Combine skills to succeed together. GCCs bring deep domain knowledge, while service providers offer broad industry insights and scalability. A CoE model can leverage both strengths to create proofs-of-concept for the parent organization.

To summarize, the GCCs and service providers equation is not a zero-sum game! In fact, both parties are so powerful, that the equation is 1+1=3!


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