– By Gaurav Gupta and Vamsi Karavadi
Global Capability Centres or GCCs, are the centres of excellence established in leading offshoring destinations across the globe and catering to their parent organisation. India is home to more than 55 percent of the GCCs established, globally. Over the past few years, encouraged by government incentives and policy impetus, India has witnessed a proliferation of GCCs across the Banking, Financial services, and Insurance (BFSI), Fast-moving Consumer Goods (FMCG), retail, and engineering services. This growth accelerated during the pandemic as organisations across sectors embraced the digital way of working. In addition, the established base of technology talent in India enabled organisations to scale up operations and rapidly adapt to the volatile and ever-changing business landscape.
Over the years, the core value propositions for the centres have evolved. These were initially established to use economies of scale and low-cost labour in India. GCCs in their endeavour to contribute to the larger global ecosystem have expanded their service portfolio from merely providing transaction support services to delivering more complex, value-added, judgement based, knowledge processes from their India centres. The talent pool in India for some of the high-end analytics and digital roles has established its credibility to be able to contribute to global strategic initiatives.
The GCC value proposition report by Deloitte in conjunction with Nasscom indicated that outside of the US, India has the largest pool of digitally qualified talent pool. With organisations embracing the digital ways of operations, the need for large pools of technology talent was critical for their expansion. More than 6 million graduates are added to the available talent pool annually. Further, the recent initiatives by organisations and different state governments, helped the educational institutions to identify future relevant skills and proactively train the graduates to be job ready. These initiatives have transformed India’s value proposition from cost arbitrage to value arbitrage. Some key talent features of India, which have helped aid the sector in the expansion of the service portfolio include the following:
- 80–85K digitally skilled graduates
- 1 in 10 analytics professionals worldwide from India
- 30 percent growth Year-on-Year (YoY) in digital talent
GCCs in India are now faced with a dichotomous situation. They are delivering transaction processing across finance, business, procurement, HR, etc. The core focus here is to deliver the service efficiently and deliver a higher Rate of Interest (ROI). GCCs are using technology solutions and automation interventions to manage large volumes of transactions without expanding their headcounts in these functions. By centralising and automating the operations, GCCs have been able to drive greater compliance and enable stronger governance to set norms.
The available talent pool for the above services is prevalent across multiple Tier-1 and Tier-2 cities in India. The standardisation of operations and the ability to use technology has enabled organisations to explore the Tier 2 talent catchment areas and continue to expand on cost arbitrage. In addition, GCCs are investing heavily in upskilling their available talent pool to take on more value-added services.
Technology and analytics have evolved to form approximately 35–40 percent of the GCC service portfolio. This portfolio comprises complex reporting, modelling, digital product development, customised application services, etc. The target talent pool for these services comprises Tier 1 and Tier 2 engineering and postgraduate talent pool. The demand for this skill emanates from multiple industries and hence, GCCs are forced to create customised employee value propositions. GCCs look at these processes as a lost business opportunity or an impact that they would face if they were unable to deliver the required outcomes. Hence, they are not afraid of paying top dollar to attract the best talent. The heightened demand for skilled talent has led GCCs to make additional compensation investments, introduce personalised benefit programmes, and focus on building a comprehensive skilling programme. While the key value proposition in this case would be centred on value, cost arbitrage still exists.
GCCs have built their capabilities and successfully enabled global organisations to quickly and smoothly transition to a new way of working and helped drive growth and scale (using their local capabilities). This has cemented India’s position as a destination that drives value, and not just provides a cost advantage. We believe that this should pave way for more GCCs to enter the country and for existing GCCs to continue to scale.
(Gaurav Gupta is Partner and GCC Industry Leader at Deloitte India and Vamsi Karavadi is Director at DTTILLP. Views expressed are author’s own.)