Global capability centers (GCCs) are playing a crucial role in driving innovation and growth in the digital world by leveraging technology and talent. link: https://www.polestarllp.com/ebook/global-capability-centers-driving-innovation-growth-in-digital-world

1. www.polestarllp.com
Global Capability
Centers: Driving
Innovation and
Growth in a Digital
World

2. 1) Executive Summary
2) Emerging Stats in GCC Ecosystem
3) Industry Potential
4) Growth Levers for GCC Sector
5) Key Challenges and Recommendation to Sectors
Growth
6) Top Priorities to Augment the Growth in this sector
7) The changing vision of GCCs located in India
8) 5 Pillars to define future operating model of GCCs
9) Conclusion
Table Of
Contents
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3. In such a digital-first world, organizations have no option but to accelerate their tech
adoption. But they have multiple bottlenecks, disrupting existing models, and the need
for speed in an increasingly fluid business environment is the need of the hour. Global
Capability Centers (GCCs) have become critical enablers for overcoming these challenges
and boosting tech adoption in enterprises.
Executive Summary
Over the last 30 years, 1,500+ Global Capability Centers (GCCs) have
been established in India. While the initial reason of the
establishment of GCCs was ‘cost arbitrage’, recent years have shown
a significant shift in the strategy to focus on transformation and
innovation.
This E-book looks closely at
the GCC industry, its growth
levers, priorities, key drivers,
and how the industry is
now driving strategic
innovation for global
corporations. We analyze
India at the core of the GCC
ecosystem and visualize the
synergies between specific
industries and cities.
A quick snapshot of GCCs in India in 2021 :
1.38 Mn+
Total Installed GCC
Talent
55,000+
Installed GCC Tier-II Talent
11.7 % CAGR
(2015-2021) GCC
Market Size
40+
AI/ML CoEs among
GCCs In India
60%
Acceleration Of Digital
Transformation Within GCCs
Due To COVID-19
30-32%
Diversity(Women
)
across GCCs
GCCs
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4. The global GCC analytics market
is expected to grow from $17.6
billion in 2020 to $35.2 billion
by 2025, at a CAGR of 14.9%.
MarketsandMarkets
70% of GCCs are involved in
digital transformation initiatives,
and analytics is a critical enabler
of these initiatives.
Zinnov
More than 70% of GCCs are
using analytics to improve
customer experience, by
providing personalized
recommendations and targeted
promotions. NASSCOM
50% of GCCs are investing in
building analytics capabilities,
and more than 80% of them
have established analytics
centers of excellence.
Everest Group
The adoption of cloud-based
analytics solutions is expected to
grow rapidly in GCCs, with
cloud-based solutions
accounting for more than 50%
of GCC analytics workloads by
2024.
Gartner
GCCs are becoming strategic
partners to their parent
organizations by providing
analytics-based insights that
help them make better
business decisions, optimize
costs, and drive innovation.
HFS research
Emerging Stats in
GCC Ecosystem
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5. Industry Potential:
Key Focus Areas
GCCs in India have explored numerous opportunities for innovation and growth through
various technology-led digitalization efforts – from exploring newer operating models to
finding the right balance across magnitudes of people, technology, cost, and
partnerships, to focusing on innovation – both internally and externally. GCCs have paved
their paths to future-proof themselves against interruptions and redefine, realign, reboot,
and reimagine their global organizations to thrive in the new normal. Let us take a swift
look at the top priorities to augment the growth of GCCs in India further.
Global business models
• Understand global business models
• Innovation and focus on global
strategies
• Align delivery excellence with global
solutions
Innovation-ready workforce
• Skill upgradation of workforce
• Focus on global solutions, not just on
process excellence
• Digital transformation is the game -
changer
Leadership and Talent
• Develop leadership talent for digital
future
• Skills to manage a diverse digital
workforce
• Delivery excellence and global vision
for greater leadership impact
Enterprise performance
• Linking GCCs to global business
performance
• GCC contribution measured against
global parameters
• GCC contribution to topline growth
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
IT & Consulting BFSI Healthcare
& Pharma
Retail &
Ecommerc
e
Automotive &
Manufacturin
g
Aviation Other
60.1%
29.5%
2.2% 2.2%
1.1% 1.0%
3.8%
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6. Growth Levers For GCC Sector
While the GCC Ecosystem in India has matured over time, there is still tremendous
headroom for their growth in India in the coming years. Let us quickly examine the key
themes driving India's leadership in this sector.
Key Themes That Are Driving India’s
Leadership In The GCC Ecosystem
Destination for
Next Gen
Talent
Dual Core
Growth Engine:
Innovation &
Scale
Spearheading
Digital Transformation
Charters
Ecosystem
Development &
Leverage
Experimentation
& Efficiency Hub
Source Report: GCC India Landscape: 2021 & Beyond
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7. However, the impact on India is directly linked to the total number of employees
in the sector; there is an opportunity for growth amongst existing GCCs to
increase penetration in global operations and attract new GCCs from
international organizations not present in India.
Source: Deloitte
Current
Market
(PY 2020)
Total
Potential**
(FY 2025(E))
More of
Same
Expand
Functions
Higher
Value Work
Transactional
Work
Higher
Value Work
Potential(US$
bn)
Scale existing GCCs Attract new companies
$33.8 bn
$3-8 bn
$3-8 bn
$9-16 bn
$3-7 bn
$8-12 bn
$60-85 bn
Opportunity to extend scale across
transactional
Services on the back of current services delivery
And a strong case to deliver capabilities across
digital, analytics, etc. and business operations
support
Predominantly a value play – attract for
R&D and niche capability centres/ COEs
to maximise value for the parent
through
Talent arbitrage
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8. Key Challenges and
Recommendation
To Sectors Growth
While the sector has a long runway for
growth, solving the challenges it faces
will be critical in achieving its potential.

9. Challenges Recommendations
Uncertain policy framework
Demand supply gap on skills
Limited visibility to innovation
ecosystem
Low cost, low value
perception of India
Infrastructure not keeping pace
with sector’s needs
Favourable policy environment
Meeting evolving talent requirements
Driving innovation and
developing ecosystem
Branding India as a global GCC
hub
Accelerate physical and digital
infrastructure
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10. Top Priorities To Augment
The Growth In This Sector
GCCs in India have explored numerous opportunities for innovation and growth through
various technology-led digitalization efforts – from exploring newer operating models to
finding the right balance across magnitudes of people, technology, cost, and
partnerships, to focusing on innovation – both internally and externally. GCCs have paved
their paths to future-proof themselves against interruptions and redefine, realign, reboot,
and reimagine their global organizations to thrive in the new normal. Let us take a swift
look at the top priorities to augment the growth of GCCs in India further.
Global Market Focus: With the pandemic blurring the lines between
locations., there is an increased focus to drive market expansion activities with
high-quality cost-efficient products / solutions from India.
Digital Transformation: The effect of the pandemic has increased the
pace of adoption of emerging digital platforms and tools across portfolios,
along with a focus on tech COE setups.
Talent: Increased pace of Digital Transformation is creating a
huge demand for niche skilled workforce. GCCs, industry
bodies, and government will need to bridge the skill demand-
supply gap and continue to focus on upskilling/reskilling of
talent.
Infra: The rise of remote working, millennials seeking
opportunities to live closer to their families, and the
financial advantages has led to the development of
tier-II and tier-III cities. This in turn is leading to a rise
in demand for good infrastructure in these locations.
Source: Nasscom
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11. The changing Vision Of
GCCs Located In India
It is no secret that GCCs in India are primarily helping drive the transformation
agendas of their respective parent organizations worldwide. Not surprisingly, many
GCCs were initially set up only to serve as operative process hubs. The advantage to
the parent organization was the cost arbitrage derived from establishing hubs in
India. However, they quickly realized that such centers could blossom into
technology hubs and eventually into full-fledged global capability centers catering
to the holistic transformation agenda for the company.
With this change in emphasis and scope, the GCCs in India today have become
hotbeds of innovation and incubators of fresh ideas. They conceptualize new products
and services based on evolving market needs. And these innovations leverage cutting-
edge solutions to business challenges and digitalization using emerging digital
technologies. The work being done by the GCCs here, in India, impacts global business
radically and provides strategic advantages. The recent EY’s GCC Pulse survey 2020
vindicates our belief that GCCs in our country are uniquely positioned to play an even
more integral role and are poised to become the epicenters of efficiency, innovation,
and modern practices in the next few years.
Source: Statista
The GCCs in India today have become hotbeds
of innovation and incubators of fresh ideas.
Bengaluru 34%
16%
13%
12%
12%
10%
Delhi
Hyderabad
Mumbai
Pune
Chennai
0% 5% 10% 15% 20% 25% 30% 35% 40%
Percentage of total
GCCs
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12. 5 Pillars To Define Future
Operating Model Of GCCs
Vision and Strategy: With a significant majority focusing on next-
generation thinking, the GCC leadership is now playing a critical role in
defining their strategy centered on technology enablement and
developing an innovation culture.
Digital: As part of the impetus on digital transformation initiatives, GCCs are
reinventing products, engaging with customers, optimizing operations,
and empowering employees.
Operations: As service delivery evolves to remote and digitally augmented
models, organizations must navigate scalability and demand allocation
challenges.
Resilience: With the GCCs focussing on creating long-term stability, they
evaluate their approach towards critical risk management, data security,
and business continuity planning.
Talent: Employee engagement practices and talent management
initiatives are paramount for the success of any GCC with a sustainable
focus on delivering customer-centric offerings.
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13. Conclusion
Leveraging modern technology can go a long way in transforming the face of GCCs and
help them achieve higher efficiency, low costs, improved employee retention, and
enhanced business agility. Moreover, it should also focus on bridging the demand-supply
gap in skills and continuous reskilling/upskilling of the workforce to develop India as a
GCC hub. Contact us to learn more about GCC services if you want a strategic technology
partner.
www.polestarllp.com
At Polestar Solutions, we have tailored our services to bring innovation, deliver value and
lead the evolution of GCCs from resource centers to Centers of Excellence (CoEs). We
enable Global Capability Centers (GCCs) to leverage emerging technologies, analytics, and
automation to drive innovation in an organization across geographies.
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