I followed the recent “GCC Summit” event organized by ET1; during the session “GCCs: The Innovation Hub for Borderless Enterprise Transformation”, Mr. Santosh Kulkarni from IBM shared a few interesting observations regarding current business environment and its implications on GCCs.
Citing a study by McKinsey2, he made an important point, that over the last 85 years, the lifespan of an average large corporation has come down drastically from 90 years to just 18 years. We can extrapolate that the corporate lifespan is going to get even shorter, given the drastic business impact of Covid on businesses. ET has also covered the topic on 19th May 20202 “Global firms file for bankruptcy amid coronavirus crisis”.
The GCCs are not exempted from this impact and must act to stay relevant. GCCs should strive to be the “borderless” “innovation hubs” to help the parent organization “transform”.
When we talk about transformation, we need to rethink the corporate vision and a new operating model to deliver the objectives. There are multiple examples: the players in Automotive industry no longer think about themselves as automotive-product companies but as “mobility solution” providers; Banks don’t need branch-footprint for catching new customers who are more comfortable with, and demand digital transaction services; Retailers don’t need expanding footprint of Brick-and-mortar stores but e-comm platforms for a wider reach to an anytime-anywhere tech-savvy buyer who wants to buy the latest fashion at their own convenience; Oil companies no longer think about themselves as fuel-retailers, they are “energy solution” providers, and as customer shows a preference for “renewable energy” which is more environmental friendly, oil companies have shown willingness to extend their offering portfolio.
Innovations that were very product oriented (look/style of the product, performance, etc.), has become more service oriented (utility like consumption, extremely reliable, consistent quality, etc.); for example, a person who buys a car, is not really buying a car, the customer is buying a solution to go from point A to point B – a mobility solution. When you start to think radically, and challenge all assumptions about what the customer wants, the solutions take a completely different form in this era of hyper connected world; IT makes solutions better.
More than ever, at present the GCCs need to focus upon ways to accelerate the parent’s transformational journey; from IT perspective, gone are the days of planning in terms of years and months for the next release, “Agile” is the newly established way of working.
When Covid constrained workforce’s mobility, the work-around solutions, to get work done from home-offices had to be implemented overnight. It did not always need a radical new thinking but an almost instantaneous and massive scaling up of solutions that had been proven to work, but were accessible to a limited few.
The pandemic also exposed that some of the constraints to work-from-anywhere were enforced by established business practices, and new thinking is required to unshackle the workforce.
The impact on continuity of business operations, due to the extent of integration across geographical borders, has been felt widely. The organizations have learnt their lessons and the newer operating models would be more resilient to such vagaries of nature.
The new models would optimize the geographic footprint. GCCs, may no longer be separated by thousands of miles from the headquarters – it may be a new optimal mix of same-shore, near-shore and off-shore operations. GCCs of the future may not be behemoths, having thousands of workers at each single location. In addition to home-offices, smaller offices, and multiple offices in the same city may be a strategic choice exercised by many.
It would be increasingly more important to deploy the right talent, quickly, to accelerate the transformation agenda. Re-skilling and re-training employees – not just IT workforce but business-process executives, to be effective in this new scenario, is unavoidable.
A combination of these factors would mean many more GCCs, but spread across multiple locations, with far fewer people in each office.
To measure the success of a GCC, KPIs and benchmarks may no longer be from the same industry, as GCCs would increasingly learn best practices from cross-sections of industries.
All these changes in operating models will be possible because GCCs leverage optimal mix of legacy and newer technologies, that would allow employees and business partners to operate and collaborate across borders, from anywhere in the world. Hybrid-cloud and multi-cloud solutions would be even more relevant in the future, because they have proven to be reliable and resilient – across the provider spectrum.
The GCCs have been the key enablers of Digital transformation and have driven strategic initiatives like connected cars, autonomous cars etc. The role of the GCCs is going to be even more critical when the consumer are drawn to services and platforms rather than product itself. Successful companies of the future may be the ones who are successful at building industry leading platforms rather than focusing on product attributes. Increasing market valuation of some of these e-comm companies reflects the faith reposed by the investors in this formula. The beauty of this model is the opportunity it offers to extend the product and service line, and generate more profits than otherwise possible through core products and services (example – merchandise retailing by fuel companies).
The key takeaway for the GCCs, from the session were –
- Transformation should focus on better experience for all stakeholders – customers, employees, investors, analysts, ecosystem-partners
- Leverage Machine Learning and AI into your solutions – these are the key ingredients into building better experience
- Collaborate across geographic and organizational boundaries to leverage right talent for each strategic initiative
IBM has the right pool of services and products to assist you in this journey. Based on our experience, IBM would recommend an approach that relies upon a “garage” approach to test and scale quickly, to build intelligent workflows to deliver consistent, and better results at speed, and leveraging hybrid and multi cloud solutions for optimal cost, resilience, security and scale.
I found this perspective very apt for the current business environment and very pragmatic for making it actionable.
Footnotes:
1 https://etgccsummit.dreamcast.in/live
