ABC of Global Capability Centers

 

Understanding GCC

I assume you are a pizza lover as well as a foodie, like me. I enjoy relating things to food, so let me tell you what I learned about GCC using my pizza analogy.
Imagine you're at the helm of a global pizza empire with branches scattered across the world. Each of these branches is skilled at crafting delicious pizzas, but behind the scenes, there's a covert team known as the Global Capability Center (GCC).

Think of the GCC as the superhero kitchen, tucked away in a secret lair. They aren't the ones directly serving customers, but they're the culinary maestros behind the scenes, holding the keys to secret sauce recipes, the perfect cheese blend, and incredibly efficient pizza-making techniques.

Whenever a branch faces a culinary challenge or needs an extra kick of flavor, they speed-dial the GCC. Picture it as having a dream team of pizza experts who understand every nuance of creating the best pizza experience. They generously share their culinary wisdom and cutting-edge techniques with all the branches, ensuring that every pizza is nothing short of extraordinary, no matter where you are in the world.

In essence, the Global Capability Center emerges as the pizza brain trust, diligently working behind the scenes to keep your global pizza empire robust and flavorful. While they might not bask in the limelight, they are the unsung heroes ensuring that every slice is a delightful culinary masterpiece!


Beginning of GCCs

Back in the early 1990s, the Global Capability Centers (GCC) burst onto the scene as the offshore divisions of major multinational powerhouses. Like pioneers setting sail into uncharted territories, General Electric, Texas Instruments, Citigroup, and American Express paved the way for a new era of global collaboration. The GCCs became the unsung heroes, working tirelessly to streamline processes, enhance efficiency, and bring a touch of magic to the business landscape.

The love affair between Global Capability Centers (GCCs) and India

India has become the sweetheart of GCCs, with the relationship deepening as companies recognize the immense value the country brings to the table.

The growth of GCCs in India tells a tale of symbiosis, where both parties benefit. One of the main driving forces behind this expansion is the emphasis on engineering and research and development (R&D) services, which contribute a significant 56% to the total revenue. This is not just a numbers game; it's a testament to India's prowess in fostering innovation and cutting-edge solutions.

So, why India? The answer lies in a perfect blend of factors that make India an irresistible partner. First and foremost is the talented labor pool that India boasts. With a wealth of skilled professionals in technology, engineering, and research, GCCs find a rich resource pool to tap into for their diverse needs.

India's supportive corporate and legislative climate is another key factor in this love story. The business-friendly environment, coupled with policies that encourage innovation and investment, creates a nurturing space for GCCs to thrive. It's like finding the ideal setting for a love story – supportive, encouraging, and full of potential.

Moreover, India's developing infrastructure plays a crucial role. As the country invests in improving its technological backbone, GCCs find themselves in an environment that is not only rich in talent but also equipped with the infrastructure needed to support cutting-edge services.

In the grand scheme of things, GCCs in India aren't just remote offices; they're key technology hubs for their headquarters. With a keen focus on specialized knowledge areas like cloud computing, artificial intelligence (AI), machine learning (ML), and natural language processing (NLP), these GCCs become the epicenters of technological innovation.

But the story doesn't end there. These GCCs are not content with the status quo; they're the pioneers of the tech frontier. In addition to their expertise in established domains, they venture into new territories such as cybersecurity, advanced analytics, blockchain, and the Internet of Things (IoT). They are the avant-garde, pushing the boundaries of what's possible.

And as part of their parent organizations' innovation ambitions, these GCCs become instrumental in exploring the latest and greatest technologies – the likes of Web 3.0, Digital Twins, and the Metaverse. It's not just about adapting; it's about leading the charge into the future.

So, the love story between GCCs and India isn't just about the present; it's a journey into a future where innovation, collaboration, and technological brilliance intertwine. As they explore the uncharted territories of the tech landscape, the relationship only deepens, creating a narrative of success, growth, and a shared vision for what's to come.

Now, let's talk numbers.
The market size of GCCs in India tells a compelling tale of growth. The Compound Annual Growth Rate (CAGR) from 2019 to 2023 stands at a robust 11%, showcasing the sustained momentum of this partnership. Looking ahead, from 2023 to 2030, the projected CAGR is an even more impressive 14%. These numbers project a future where the GCC market is not just thriving but surpassing expectations.

By the year 2030, the GCC market in India is predicted to soar beyond the US$ 100 billion mark, possibly reaching around US$ 110 billion. The anticipation extends to the proliferation of GCCs across India, with a forecast of 2,400 such centers. Yet, given the country's ascent as a global technology and services hub, this number might even surpass expectations, potentially exceeding 2,500.

India is poised not only to be a significant player in the GCC realm but also to emerge as the world's technology and services center. These numbers not only quantify the love story between GCCs and India but also hint at a future where innovation and collaboration continue to thrive in this dynamic partnership.

Source

List of some GCCs in India

Companies	CTO/CIOs
IBM	https://www.linkedin.com/in/manishguptacto/
Capgemini	https://www.linkedin.com/in/mukeshjaincoach/
Deloitte	https://www.linkedin.com/in/vinayakmuzumdar/
Cognizant	https://in.linkedin.com/in/achalkataria
Tata Consultancy Services (TCS)	https://www.linkedin.com/in/abhijitmazumder/
Infosys	https://www.linkedin.com/in/rafeetarafdar/
Wipro	https://www.linkedin.com/in/krsanjiv/
HCL Technologies	https://www.linkedin.com/in/ajit-kumar-12010a96/
Genpact	https://www.linkedin.com/in/piyush-sharma-4b086b1b7/
Accenture	https://www.linkedin.com/in/nirav-sampat-a533ab113/

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Government as an ultimate matchmaker

 

Karnataka's Spoke-Shore Project:

The Karnataka government is taking a bold step with its Spoke-Shore project, aiming to accelerate the establishment of GCCs across the state. By strategically focusing on clusters in Mysuru, Hubbali, and Mangaluru, the government aims to diversify the talent pool beyond Bengaluru. The ambitious goal is to generate one million direct and indirect job opportunities by 2026. This initiative not only promotes employment but also facilitates the seamless expansion of GCCs in specific regions.

 

SEZs and Incentives in Tier-2 Cities:

Governments at both the state and central levels are incentivizing the IT/ITeS industry's expansion into non-Tier-1 regions. Special Economic Zones (SEZs) have been established in Tier-2 cities, creating favorable conditions for businesses. Under Tamil Nadu's ICT policy 2018, enterprises setting up or expanding in B&C districts are eligible for additional capital subsidies, fostering growth outside the traditional hubs.

 

Union Budget 2022-23:

The Union Budget 2022-23 introduces innovative measures to reduce tax litigation and enhance ease of doing business. Allowing the option of filing an updated or fresh return of income and deferring the filing of an appeal by the tax department in cases where an identical point of law is pending reflects a commitment to streamlining tax processes.

 

Ease of Doing Business 2.0:

The government's focus on "Ease of Doing Business 2.0" is a positive stride towards trust-based governance and reduced compliance burdens. The introduction of C-PACE, encouraging voluntary winding up of firms, and emphasizing a decrease in duplicative compliance are significant steps in creating a business-friendly environment.

 

New Legislation for Enterprise and Service Hubs:

A noteworthy development is the announcement of replacing the Special Economic Zones Act with new legislation, paving the way for states to participate in the "Development of Enterprise and Service Hubs." While detailed specifics are awaited, this move signals an intention to modernize and align regulations with evolving business needs.

 

GIFT City Initiatives:

The establishment of world-class universities in GIFT City aims to bolster the financial services sector's workforce through education. Additionally, plans for an international arbitration center in GIFT IFSC enhance dispute resolution mechanisms, contributing to a conducive business environment.

 

Focus on Skill Development and R&D:

The government is keenly investing in skill development, aligning initiatives to provide continual skilling opportunities, sustainability, and employability. This strategic move is designed to enhance skill accessibility, particularly benefiting the GCC sector.

 

R&D in Emerging Opportunities:

Recognizing the significance of research and development, there's an increased focus on emerging opportunities such as artificial intelligence, geospatial systems, and drones. This initiative aims to fortify GCC concentration in these cutting-edge sectors, positioning India as a global leader in technological advancements.

As the government continues to weave this love story, these initiatives collectively nurture a dynamic ecosystem for GCCs, ensuring a long-lasting and mutually beneficial relationship between these global powerhouses and the vibrant landscape of India.