Re-aligning the compass: Location strategy for Global In-house Centers

Document created by Nerurkar Diksha on Jun 16, 2016
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Today’s world is characterized by rapidly shifting markets, consumer demand and dynamic economic drivers. Further, across the globe, there are emerging pockets of talent and access to these resource pools are now a source of competitive advantage. An effective global delivery network encompassing service delivery across continents that assures flexibility and scalability is thus of paramount importance.


GICs led the first wave of outsourcing, and while in the initial years, locations were often selected on the basis of costs, today outsourcing is seen as more than just labor arbitrage offering multitude of advantages, and therein lies the increasing importance of a location strategy for GICs. A good location ensures not only efficient and seamless delivery of services and support, but today also plays a crucial role in facilitating access to new markets and new market entry, new product development, and innovation in process and services.


With significant gains at stake, location assessment today has assumed increased importance highlighted by a collaborative effort in development, high levels of responsibility and accountability. Selecting the right location is a function of multiple parameters with varying importance placed in these parameters by the organization.



The organization has to build the framework driven by its requirements in order to prevent any alterati

eon to the business case. Therefore, it is utmost important for organizations to carefully assess each parameter and optimize the benefits within a given set of constraints.


GICs look to mitigate concentration risk though adoption of a location strategy, while the emergence of niche services delivery from select cities is actually leading to development of a global supply pool of talent. GICs today are being increasingly empowered to make strategic decisions. At the same time, the advent of tier 2/3 cities as viable delivery locations is ensuring significant rethinking on established location strategies.


Therefore, it is best for companies to strengthen their location assessment mechanism before embarking a GIC model. A well thought out framework with emphasis on the larger picture will ensure that the location selected more than meets expectations.


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