1. Guide to scale
innovation at
GlobaI In-house
Centers(GICs)
kpmg.com/in
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2. The changing paradigm
of innovation at GICs
In order to step-up as a business partner and play a consultative role
to the enterprise, GICs can adopt an integrated strategy to scale
innovation in digitisation...
Digital disruption seems to be fundamentally changing the ways
in which organisations operate. Adopting digitisation is one of the
imperatives and staying ahead of the innovation curve is the new
norm. This requires a paradigm shift in GICs’ perspective towards
innovation to thrive in the digital era…
1. http://articles.economictimes.indiatimes.com/2004-12-11/news/27407344_1_offshoring-neoit-supplier
2. https://hbr.org/2013/03/offshore-centers-can-offer-more-than-low-costs
3. http://www.business-standard.com/article/economy-policy/india-based-captives-move-up-the-value-chain-114050700199_1.html
Source: KPMG in India analysis, 2015.
Enterprises focussed on
cost arbitrage through
low cost destinations.
Offshoring was driven
by global consolidation
coupled with unified
technology platform
roll-outs.
GICs achieved critical
mass and moved
up the operations
maturity curve through
Operational Excellence.
Digital disruption
seems to be the next
inflection point. It will
be important for GICs
to lead this wave and
become a true business
partner to the enterprise.
For GICs to move up the
value chain, it is important
for them to build stronger
strategic partnerships with
their eco system.3
Business Standard
• Mobility and
social media
• Cloud/SaaS
• Analytics and big
data
• Robotics process
Digital
transformation
3.0
• Standardisation
• Automation
• Process
Re-engineering
• Centres of
excellence
Originally designed
to provide labour
cost arbitrage, these
centres are pushing the
boundaries of efficiencies
and are on the brink of
being a source of strategic
advantage. 2
HBR
Operational
efficiency
2.0
Offshoring
• Cost arbitrage
• Technology
platforms
• Access to global
skills
• Data management
Global sourcing has
become a corporate
mandate for both leading
corporations and global
service suppliers.1
Economic Times
1.0
Cost and
Scalability Productivity
Business
Partnering
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3. Framework to scale innovation
Source: KPMG in India analysis, 2015.
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4. Mandate
Set budget and drive sponsorship for innovation- Leading
GICs work closely with their parent organizations to identify
a budget which is spent on innovation and also drives
sponsorship at an enterprise level.4
Involve the parent organisation closely during execution-
GICs must involve the parent organisation and business
units while prioritising and executing ideas. This can
help the GIC move up the learning curve, showcase its
capabilities, help build trust with the parent and drive a
culture of working together with the enterprise and not limit
innovation to GIC’s scope.
Drive focused innovation- Few GICs have a dedicated and
focussed innovation cell that poses problem statements
to employees to garner bright ideas. Leading GICs in
technology sector also set-up ‘garage time’ for employees
to build on their ideas and passion.
Mentorship
Assign idea champions and provide commitment- Assign
a suitable subject matter expert to help ensure technical
and functional guidance is provided to foster the idea. In
addition, leading GICs show commitment through their
senior management to create the right enterprise level
network to drive support and execution of ideas.
Motivation
Align performance to innovation goals- Employee
performance goals not aligned to innovation goals may
not help drive bottom-up innovation across the GIC. The
centres must explore opportunities to drive innovation by
linking organisation objectives to their existing performance
management system.
Drive ideation at grassroots- GICs must focus on building
an ideation culture at various levels of the organisation and
not restrict it to only a part of the organisation. Drive the
culture of ‘everybody can innovate’.
Align rewards and recognition to innovation- Create a
recognition platform for contribution to innovation at an
enterprise level and identify inputs to compensation, based
on employee contribution.
People & culture
4. KPMG in India analysis, 2015; Interviews conducted with leading GICs.
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5. Real time data
Leverage customer and operations data- Access to real
time customer and operational data can be a powerful tool
towards cutting edge analytics that can drive innovation.
Leading GICs thrive on such data that have resulted in
development of mobile apps and algorithms. This possibly
has changed the way organisations interact with their
customers and vendors on the process innovation front.
Look inside-out- Besides access to customer data, GICs
must also leverage internal audit findings on an on-going
basis and benchmark their maturity of operations to
continuously improve and sustain innovation on the process
and productivity front.
Tools
Collaborate through ideation platforms and social media-
GICs have fostered two approaches to generate ideas–
bottom-up (crowd sourcing) and top-down (innovation
cell). Leading GICs have been successful in both these
approaches with the support of right collaboration and
social media tools. While many GICs leverage readily
available enterprise social collaboration tools, few of them
deploy sophisticated in-house tools.
Generate ideas from events and analytics- GICs must
organise focussed events to generate ideas. On the
technology and product development front, leading GICs
conduct hackathons to address customer challenges while
others run analytics camps to generate insights and drive
innovation.
External ecosystem to drive innovation
Ecosystem How GICs can collaborate and leverage the
ecosystem
Academia
• Long term research projects focussed on product
innovation and ideation forums
• Few GICs leverage academia to solve complex business
problems and build complex algorithms
Service Providers • Explore gain share model to drive process innovation and
operational excellence
Start-Ups • GICs in the technology sector lead the pack by creating
innovation accelerators in product innovation and the
analytics space
GIC Network • Leverage the existing GIC clusters to share and learn
leading practices
Capacity
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6. kpmg.com/in
KPMG in India contacts:
ViralThakker
Partner
Management Consulting
T: +91 22 3090 1730
M: +91 99 6706 8657
E: vthakker@kpmg.com
Saurabh Mathur
Director
Management Consulting
T: +91 22 3983 6000
M: +91 98 3363 6933
E: saurabhmathur@kpmg.com
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© 2015 KPMG, an Indian Registered Partnership
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Printed in India. (003_BRO0415)
Skills
Hire the right talent- GICs must look at enhancing their
talent acquisition approach by driving innovation and
creativity related assessments to gauge the innovation
quotient of candidates especially for product innovation.
Train the talent on creativity- Develop training modules and
programs like Design and Innovation workshops to hone
creative thinking skills of employees.
Align career path- Create positions, alternate career paths
and growth prospects for employees who contribute
heavily to idea generation, groom them to become Idea
Champions and drive innovation in the GICs.
Exposure
Build business context- GICs can offer a secondment
option to resources to move temporarily to the parent/
business units to gain business understanding. This can
drive innovation not only at a GIC level but also help them
play a consultative role to the innovation value chain.
Digitisation helps in gaining business context as it provides
a platform for GICs to get closer to business.
Leverage domestic business- GICs, whose parent entity
has a domestic business in India must make use of the
opportunity to support domestic operations, get closer to
the customer and build business exposure.
Build technology context- GICs can drive digital innovation
by developing capability to build certain technology
capability and tools in-house or leverage the external
ecosystem.
Capability
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