Global Capacity Centres: Driving Transformation for Multinationals

08 Oct 2022

Global Capacity Centres (GCCs), which emerged in the early 1990s in India, were the offshore units of large global organizations which were established to perform designated technology and business supporting operations for their parent organizations.

Global Capability Centres concentrate workers and infrastructure to perform back-office functions, corporate business-support functions and offer IT support functions for global organizations, thus enhancing their productivity and increasing profits. Some firms also use GCCs as centres of excellence for innovation.

Since their inception as cost-saving centres to deliver IT and business services, GCCs in India have come a long way. GCCs are evolving as digital transformation hubs, spearheading global innovation and delivering high-value work across emerging technologies and sectors. Over the past few years, GCCs have moved up the ladder from being low-cost routine service providers to centres of excellence for advanced digital capacities.

GCCs bring about significant cost saving, risk mitigation and business alignment. Considering the robust growth of GCCs in India, it can be assumed that over the next 4 to 5 years, GCCs will witness a significant rise in the industry. Currently, a quarter of the world’s global firms have presence in India, which suggests that India is among the most preferred GCC destinations in the world.

The covid-19 pandemic forced many organizations to rethink their idea of remote working. The growth of global capacity centres in India has been increasing steadily, which caused an increase in the number of organizations opening up to the idea of remote working. 

As one of the fastest growing economies, India has been a preferred investment destination, attracting many multinationals. Multinational firms are planning to expand their GCCs in India to help fulfil business targets following a rise in demand.

With over 77,000 startups, India is now one of the largest startup hubs in the world, and this startup landscape is only getting bigger by the day. Banks and financial services companies are now collaborating with the fintech in specified areas, integrating them with technology, thus making India a preferred destinations for skill and talent. Having one of the largest university systems, there is immense quality and quantity of resources available across engineering and finance backgrounds in the country. 

India presents a unique and favourable ecosystem for the expansion of GCCs. In the fields of AI, machine learning, big data analytics, cloud computing etc., GCCs are prioritizing the need to build niche skill capabilities. 

GCC’s have demonstrated high resilience to the pandemic and have created significant value within the Indian tech ecosystem. There has been a significant uptake in the adoption of technology and customization in talent and branding. GCCs today can create significant social impact within the ecosystem due to factors such as presence of a skilled workforce and a clear view on ground-level issues.

Moving forward, to make GCCs more resilient, strategized operating models must be designed in collaboration with the Government, educational institutes, high-tech startups and service providers. For India to attract more GCCs, it must work on amplifying success stories to build brand India as an innovation hub, with increased focus on skilling its talent base in digital tech areas, while developing an overall infrastructure to prepare for the future of work.

Today, in the post-pandemic world we live in, GCCs are playing a bigger role in driving growth and value for big organizations. In the near future, they are expected to become even more strategic to an organization’s balanced functioning, armed with advanced digital capacities and a highly skilled workforce. 

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