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Concentration risk for GCCs - A perceived concern or a strategic advantage?
Concentration risk for GCCs - A perceived concern or a strategic advantage?

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India has been the leading hub for GCCs due to its engineering talent prowess, vast talent pool, emerging technology capabilities, and being an innovation sandbox. While this substantial GCC ecosystem has yielded considerable advantage, however it has also sparked potential concentration ie. significant portion of global organisational talent aggregated in a single country.

In the Nasscom- KPMG survey on the emerging considerations for India, only 20% of the surveyed companies saw concentration as a major concern and that too majority of them from the BFSI and TMT sectors and 89% of the GCCs surveyed were either already increasing or keen to increase their footprint only or mainly in India.

It is important to note that the reality of the concentration concern goes beyond a simple headcount evaluation. GCCs must take into account various parameters before taking an informed decision.

 

Risk gcc 1

 

  1. Scope and volume of work from the global perspective – This includes identifying the global functions being supported from India centres and assessing the volume of work rendered from Indian centres.
  2. Strategic objectives – This includes identifying and analysing which of the strategic and functional objectives of the global organisation are being fulfilled by India GCCs and weightages must be assigned for alignment to strategic objectives.
  3. Criticality of the activities – This includes evaluating the importance and the criticality of the activities handled by India centres to the HQ’s overall value chain and business continuity possibly by using a scale ranging from 1 (low) to 5 (high).
  4. Number of centres in India – Identifying and mapping the number of centres in India against the functions being supported from India and their geographical spread across cities and states.
  5. Global presence and capabilities – GCCs must assess their company’s existing global footprint and capabilities in other geographical locations to support outsourced operations managed from India. They should then evaluate the presence and knowledge of functions being supported from India with other centres or global organisations.
  1. Reliance on the Indian ecosystem and offerings – GCCs must analyse their company’s dependence on Indian expertise, talent, capability, technology, infrastructure, etc. including percentage of global tech infrastructure based out of/ supported from India.
  2. Third party and supply chain resiliency – It is important to evaluate the dependence on third parties for critical operations by GCCs in India. What part of work is driven by the third-party ecosystem and then review their resiliency and adequacy of third-party risk management mechanisms to ensure supply chain resiliency.
  3. Tech landscape – The GCCs must evaluate the platform, infrastructure, and technology service support spread provided from India i.e., the spread of data servers within India.
  4. Business continuity plans (BCPs) and contingency planning – GCCs must evaluate the adequacy of contingency plans to address potential disruptions in India and ensure business continuity in the event of unforeseen events.
  5. Cultural integration and ethical practices – GCCs must evaluate the extent to which the culture of GCC is seamlessly integrated with the Global company and vice versa.

By not just focusing on the headcount present in the country, GCCs and their HQ must have a comprehensive evaluation on these factors.

 

To read more about concentration and other considerations being faced by Indian GCCs, read the report GCCs in India : Building resilience for sustainable growth from the following links.

Nasscom Community – https://community.nasscom.in/communities/gcc/gccs-india-building-resilience-sustainable-growth

Nasscom Website - https://nasscom.in/knowledge-center/publications/gccs-india-building-resilience-sustainable-growth


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Vandhna Babu
Chief of Staff - President's Office

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