Beyond execution and delivery, the GCC's product and innovation agenda with digitalization defined
How would you describe the evolution of GCCs In India? What makes India a destination of choice for these centers?
From being functional support to the world, to becoming a core strategic base for global enterprises, India has come a long way in the global capability and service delivery chain. The country ranks number one in the list of Global Corporate Centre (GCC) hot spots in the world when assessed on software engineering maturity, cost, tech talent pool and ease of doing business, according to an industry study. The last two decades have witnessed a dramatic shift in the way GCCs are integrated and partner with their firms and clients around the world. It’s moved from being wholly focused on helping to run the firm through to looking at how they can help change the firm. As a result, GCCs are moving up the value chain and the evidence is in the increasingly complex roles and profiles that now comprise a bigger part of the employee base in India. GCCs have transformed from the traditional cost-arbitrage service center model to becoming new-age, future ready innovation and technology hubs.
What has propelled this transition?
Access to a diverse and highly skilled talent pool has always been one of India’s key strengths. But in addition, we have seen an improvement in infrastructure across the country in many more cities along with various industry initiatives to help business build a strong eco system. Over the years, the GCC operating model has also evolved into a more mature framework focused on driving strategy and innovation agenda, in addition to cost optimization. Today, large GCCs aim to generate value through deep-end capabilities, domain expertise and depth of understanding of the business. And these are the reasons why we see not only senior leadership roles but also technology and product roles being based at the GCCs in India. New technologies are only driving this transformation further. India is a front runner in AI/ML, RPA, Digital, Cloud, emerging tech adoption and delivery. Mature GCCs have set up new tech centers of excellence in India with an eye on driving global execution strategy and decisions. To sum it up, from the humble beginnings as tech or ops service centers, many large GCCs have now evolved into becoming a microcosm of the parent firm itself.
Is cost still a big advantage despite the labor market becoming competitive?
While cost is still a big advantage for GCCs, India is a talent powerhouse. We have abundant availability of talent, a deep talent pool in STEM, a favorable demographic profile and a mature eco system. The digital talent pool continues to grow as does the focus on niche digital skills.
What are the key challenges with regards to attracting and retaining the right talent, especially for the higher value-add roles?
Demand for digital talent in India is expected to grow significantly, at times outstripping fresh talent supply. This can pose challenges in terms of pressure on benchmark remuneration rates. The other watch point is possible skill-set mismatches for hiring for niche roles. Reskilling existing staff, and an increased focus on the campus sourcing strategy, could be ways of mitigating some of these talent challenges. Several GCCs have set up new offices or consolidated their presence with state-of-the-art buildings, including us with a 830,000 sq feet campus and a world-class work environment in Hyderabad last year. We will see similar moves in many more cities in the years to come.
What changes has the pandemic brought about with respect to the functioning & role of GCCs?
The pandemic has been a catalyst for accelerated digital transformation at GCCs. Global centers have embraced digitization and Intelligent Automation with a focus on developing more agility over the last two years, which have been key drivers of productivity. At J.P. Morgan, for example, our investments in technology over the years, agile capabilities, and enhanced collaboration tools and processes enabled our capability centers to continue to support the firm globally despite 90 per cent of employees working from home.
What are the key challenges facing GCCs in India? How can they be resolved?
Cybersecurity is an important focus area. GCCs need to ensure they build controls to support WFH & hybrid models. Workplace flexibility and the future of work are important aspects to think about as well. The hybrid work model needs to be flexible, inclusive and collaborative while keeping a sharp focus on innovation. GCCs need to keep pace with the accelerated digital transformation taking place across the business. GCC leadership will also have to keep a watch on the war for talent over the next 5-7 years. We need to build a talent pool which will be future-ready. Upskilling and reskilling will play a vital role in meeting this objective. In our capability centers in India, around 65,000 courses were taken up by our employees in just one year to deepen skills in data & tech literacy, market & product knowledge, controls & conduct, client engagement & collaboration among others.
Leadership development – both local and global – will also be an important factor in the GCC story in the coming years. GCCs must focus on mid-level management growth as they keep the organizational scale and goals in mind.
What sort of growth can the GCC sector see in India in the years to come? What will be the key pillars of this growth?
India will witness newer GCCs being set up, while existing centers scale up in size and value offerings. We will continue to see an increase in the complexity of roles being performed in India – i.e. a larger number of senior leaders based in India having global responsibilities as well as product ownership. The availability of skilled talent across various parts of the country also makes India very strategic from a risk mitigation and business continuity point of view. All put together, global capability centers are poised for tremendous growth in India in the coming years.
Deepak Mangla is CEO, Corporate Centers in India and Philippines, J.P. Morgan.
