Indian GCCs take on a more strategic role

Indian capability centres show no signs of looking back. As companies of all hues line up to open centres with increasingly cutting-edge capabilities, here is a look behind the scenes.

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India’s tryst with global capability centres known as GCCs began in the mid-1980s, nearly in tandem with its appearance on the global stage as a favourable IT outsourcing destination.

A few teams at these centres handled advanced mandates like analytics and R&D, but the main drivers for global companies to set up these offices was to leverage India’s twin strengths of cost arbitrage and scale. By building a resource pipeline that would take over transactional processes such as accounting and payroll, companies hoped to boost the bottom line.

Around 2015, a growing number of GCC teams had matured to own processes from merely executing them. Matters then started to take an interesting turn, as some centres began to emerge at the forefront of innovation and digitization in their companies. They were now referred to as Global Innovation Centres (GICs).

A key reason for this is the evolution of Indian tech talent over the years. With constant global exposure, GCC teams were no longer content to function as back offices and pushed the envelope on working more closely with headquarters to contribute to business objectives.

Recent research by Deloitte and industry body NASSCOM has found many such examples. The Indian global capability centre of an Israeli software company is working with local start-ups to deploy machine learning and artificial intelligence to improve customer experience for an Indian telecom company. Another centre of a French bank used machine learning to automate the local KYC processes, so it could move on to advanced work. A third capability centre for a US home-improvement retail firm employs 55% of its global analytics talent and accelerated the company’s migration to cloud.

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