As of 2019, the Indian Global Capability Centres’ (GCC) market size is approximately $28.3 billion, with over 1,750 centres and over one million employees. At present, 50 per cent of all GCCs are located in India, and over 180 of these are not just capability centres but also innovation centres that belong to Fortune 500 companies.
As per Nexdigm, a global business advisory organisation serving clients from more than 50 countries, with GCCs, there could be savings of up to 45 per cent over an average time of three to five years. Nexdigm provides customers, both listed and privately held firms, with integrated solutions to navigate complex challenges.
“Over the years, India has changed its perception from being a cost-centre to an innovation centre for GCCs. Today, we have more than 4 million people in the workforce within the IT sector, and nearly one-fourth of them work in GCCs. With more than 1,300 GCCs currently operating in India, we are seeing businesses expanding in diverse sectors, such as automobiles, semiconductors, aerospace, industrial automation, engineering, energy and healthcare. With the vast talent pool, upgraded infrastructure, and right government policies, we have shown the world that India is a great marketplace to invest for GCCs,” explains Rajiv Kumar, Joint Secretary, Ministry of Electronics & IT (MeITY).
“Technological transformation will play a huge role in making us the e-commerce technology development capital of the world. Today, 80 per cent of companies, either B2B or B2C, are doing business digitally in India. We are setting up ‘Start-up SETU’ to enable Indian and global start-ups to engage, create, and build a better ecosystem in the country. We have also opened 20 centres of excellence across Tier II and Tier III cities to boost local talent,” adds Kumar pointing that it is factors such as a large, educated talent pool, young demographics, infrastructure requirements across metros and smaller cities along with well-established intra-country connectivity, and appropriate policy support that have enabled India to maintain its leadership position in GCCs.
India’s cost to value proposition is approximately three to four times lower than the US. There has also been 250 per cent increase in GCCs in India in the last ten years. India has also been attracting global unicorns, eight of which have already set up operations in India. With an increasing focus on digital, over 75 per cent of India-based GCCs are investing across analytics, cloud migration, and robotic process automation, and over 50 per cent in artificial intelligence, machine learning, and Internet of Things (IoT).
Business continuity
As per the geographical demarcation, 70 per cent of Indian GCCs belong to US-headquartered companies, followed by 20 per cent from Europe and 10 per cent from the Asia-Pacific region. The webinar session aimed to showcase the potential of GCCs in India and highlight how multinationals can leverage India’s sizable knowledge-driven workforce to their advantage. This can be in terms of business continuity, expanding their talent pool, strengthening their operations, and globalising their back-offices.
“Indo-US enjoys a comprehensive strategic partnership that cements cross-sectoral links between them. With current trade of $142 billion, the countries have complementary strengths and capabilities that can make the combined vision and ambition of $500 billion trade a reality. The liberalised atmosphere and large talent pool are attracting a lot of global companies, resulting in them moving their manufacturing units to India. The Indo-US trade will play an important role in boosting growth for industries in India,” says Dr T.V. Nagendra Prasad, Consul General of India, San Francisco, at the Nexdigm webinar.
The webinar also highlighted that 43 per cent of GCCs are singularly focused while 57 per cent offer integrated services with a combination of IT, business processes, engineering, and R&D from one cohesive centre. A majority of GCCs in India are from sectors such as software and IT, banking, financial services, and insurance (BFSI), pharmaceuticals, telecom, electricals & electronics and manufacturing. An interesting fact is that the software plus BFSI verticals account for almost 30 per cent of the total installed talent base.
“India has executives who have a deep-rooted level of understanding and are capable of driving operations on their own. Backed with digital transformation, matured market conditions, and cost-saving business models along with an immense range of services and capabilities, GCCs have opened a gateway for not only global firms but also smaller players in India. That’s really fuelling the next wave of growth and building investments in India due to the exhaustive ecosystem created by the government,” says Peter Bendor-Samuel, founder & CEO, Everest group.
“India as a country provides minimal business risk for companies due to suitable policy backing. Hence, companies should not look at India as a makeshift set-up but as a full-fledged business unit. Also, the talent here has exceptional leadership capabilities to lead strategic businesses, which enables companies to make collaborative investment in nurturing and building up the right talent for future growth,” concludes Jerry Kinnick, president, Continuum Global Solutions.