Topics In Demand
Notification
New

No notification found.

India's success is bolstered by  global capability centers
India's success is bolstered by global capability centers

2122

0

India's economic expansion in recent years has made the world take note. A key contributor to this has been the Global Capability Centre sector – a multi-faceted force. India comprises a hefty 50% market share of GCCs across the globe, estimated at about 1500 and still growing. Projections set out that within 5 years it could reach 60-85 billion US dollars, resulting in one of largest clusters of Fortune 500 companies in the world. This sector not only had a noteworthy human capital impact but also boasted a 3X revenue multiplier effect and a 5X jobs multiplier effect.

 

GCCs have progressed leaps and bounds since their early days, four decades ago. Initially, they just supported multi-national enterprises with background operations; in the present, GCCs are spearheading the adoption of new technologies and pioneering game-changing possibilities. This development is only expected to become more pervasive thanks to numerous worldwide variables over recent years. Essentially, three things have worked especially in favour of GCCs: first, we have seen a significant rise in digitalisation across sectors that were not typically thought-of as targets for transformation (for instance energy, industrial, and banking); second, a concentration on sustainability has moved the mission for swift innovation towards knowledgeable GCCs that provide multiple procedures under one roof; and third, the effort to disentangle supply chains from their single geography reliance with a 'plus one' approach has led to more openings (which were earlier focussed in limited locations and offices) becoming accessible to Indian capability centres. All these elements coupled with ‘Make in India’ initiative guarantee an amplified role for GCCs going forward. To put it another way, India’s GCCs will be leading global “Making" once more!

 

Evolution in the maturing focus areas for GCCs is becoming increasingly obvious. Current surveys of GCC and global leadership indicates that 2 out of 3 centres will be prioritising building new capabilities & CoEs in the next three years, with digital capabilities such as Data & Analytics, Cloud Engineering, AI/ML, Cybersecurity and Process Automation highly sought after. ER&D and digital engineering revenues are projected to constitute a significant portion of GCC revenue in the near future, growing at a CAGR of ~20%. Given the increased acceptance of decentralised teams, formerly headquarters-centric functions such as ER&D are gradually moving to GCCs. In India alone, over 50% of these centres serve as technology centres of expertise; with about half focusing on developing capabilities & 25% dedicating their efforts to R&D. Deloitte & nasscom's latest demand market ER&D pulse survey revealed that 43% global leaders were striving to expand their R&D base through either inhouse centres or service providers - largely found in India. This survey additionally pointed out that India-based centres play a pivotal role in driving end-to-end product lifecycle digitalisation (as affirmed by 42% respondents)

 

As a result of this pursuance of advanced digital and ER&D capacities, the overall ecosystem is likely to be improved due to the co-sourcing prospects. It appears as if this concept has been quickly taken up as 80% of participants in the previously mentioned survey specified that their firm is either set to adopt or has already employed a model of co-creation with start-ups, engineering service providers, educational bodies or even rivals so they can hasten their operations across all areas. In India we have witnessed an increase in the number of CoEs and other such collaborative initiatives involving organisations and universities. But arguably, startups are reaping the most rewards from this situation. It looks as though there is an interdependent relationship between GCCs and startups as both could take benefits from what one another can offer each other. On one hand GCCs are being transformed by introducing inventive minds and leaders into their structure, which was conventionally only made up of implementers and optimizers; on the other hand, they long for agility enabling them to react quickly - qualities affiliated with a startup’s outlook.

A notable growth in the GCC’s contribution to India’s GDP can be attributed to a rise in the number of Indian and international businesses establishing secondary centres in Tier 2 cities. This is due to the sizable, digitally proficient talent pool available at competitive prices, unlike that of Tier 1 cities, where competition and attrition are becoming more frequent. Evidently, many state governments have come to recognise this potential too, offering attractive incentives to draw companies into their second-tier metropolises.

 

It is evident that GCCs have progressed from simply managing and optimising to brainstorming and creating. For example, they now have their own individual investment pots in many circumstances. This has caused a changing of roles, as it has shifted from managing existing products/services to developing new ones “made in GCCs”. The Indian market is very well-suited to meet the requirements of international enterprises; it won’t be long before we witness GCCs encouraging relocating businesses across different areas to India.


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


Technology Enthusiast

© Copyright nasscom. All Rights Reserved.