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Indian GCC's are thriving despite an IT slowdown! Here's how

By Antal International
25-01-2024

In the midst of an IT services slowdown, India's global capability centres (GCCs) are undergoing a remarkable transformation. Once known for back-end operational support, these centres are now emerging as innovation hubs for multinational corporations (MNCs). Despite the challenges faced by the IT industry, GCCs are thriving, driving cutting-edge innovations and experiencing a surge in hiring.

The Evolution of India's Global Capability Centres

Global capability centres in India are no longer confined to providing round-the-clock technical support; they have become instrumental in fostering innovation for their parent MNCs. This shift is evident in diverse sectors, from pharmaceuticals to retail, where GCCs are driving significant advancements.


Innovations Across Industries

  1. AstraZeneca's Virtual Reality Training: AstraZeneca's Innovation and Technology Centre in Chennai is utilizing virtual reality (VR) to revolutionize drug production training, reducing waste and costs significantly.

  2. Rakuten's Digital Payment Platform: Rakuten Group's Bengaluru Global Capability Centre developed Rakuten Pay, showcasing the transformation of GCCs from support functions to managing entire products, driving innovation and strategy.

  3. Lowe's Self-Checkout System: Lowe's GCC in Bengaluru played a pivotal role in developing a self-checkout system, enhancing transaction efficiency and positively impacting the company's bottom line.

The GCC Boom in India

India is experiencing a surge in the establishment of GCCs, with more than 1,580 captive centres employing 1.6 million people. The $40-billion-plus Indian GCC industry is now handling in-house technology and innovation work that would traditionally be outsourced to IT services majors.

The Driving Forces Behind GCC Growth

GCCs in India are capitalizing on factors that sparked the IT boom, such as a vast pool of English-speaking tech talent available at affordable rates. Companies are recognizing the value of in-house capabilities, leading to a wave of MNCs establishing their captive bases in India post-Covid-19.

Beyond Cost Arbitrage - India's Allure for GCCs

While cost arbitrage was a primary motivation in the past, India's GCCs are now attracted by a blend of talent, a thriving start-up ecosystem, and a digitally adept industry and customer base. The successful validation of remote work during the Covid-19 era has further fueled the growth of GCCs.

 

GCCs - Vital Contributors to Global Growth

GCCs are playing an indispensable role in the growth of their parent firms. AstraZeneca estimates that about 55% of its IT operations are based in India, emphasizing the significant contribution of Indian GCCs to the global value generated by MNCs.

Challenges and Future Outlook for GCCs

Despite their growth, GCCs face challenges in attracting and retaining talent. However, with a diverse range of roles and the ability to move across functions, GCCs offer unique career opportunities. The slowdown in the IT sector is also prompting companies to strategically retain critical tasks in-house.

Unleashing the Potential of India's Global Capability Centres

As India's GCCs evolve into innovation powerhouses, they are not only driving global operations but also contemplating revenue streams within India. The sector is poised for tremendous growth, promising higher-quality jobs and positioning India as a global leader in technology and innovation.