GenAI a top priority for 70% GCCs in India, more than half leveraging it to boost ops and customer experience: EY Survey

• Among the top 3 priorities for GCCs are sustainability, enhancing functional capabilities and driving digital transformation
• Talent reskilling and upskilling with focus on AI integration, key to GCC growth
• Cybersecurity, data privacy, and tax compliance top concerns for GCCs

Mumbai/Bengaluru, 13 November 2024 – The adoption of Artificial Intelligence (AI) within Global Capability Centres (GCCs) in India is accelerating, with nearly 70% of centres investing in generative AI (GenAI), according to the EY India GCC Pulse Survey 2024. The EY report highlights insights from 88 GCCs in India across diverse industries and functions. The survey reveals that 78% of GCCs are upskilling teams for GenAI adoption, while 37% are piloting use cases, highlighting a shift from experimentation to practical applications of AI focused on talent management and risk mitigation.

When asked about GCCs’ top 3 priorities for the next year, notably 100% respondents identified climate change and sustainability agenda as the top focus area. This was followed by 85% wanting to expand functional capabilities and 61% wanting to drive enterprise wide digital transformation. Key risks to these priorities include the rising cost of talent, challenges in attracting talent at the required scale or speed, and improvement in leadership development.

Reflecting on the report findings, Arindam Sen, Partner and GCC Sector Leader – Technology, Media & Telecommunications, EY India, said, "The survey highlights the transformative role of technology in driving growth within GCCs, with a clear emphasis on GenAI. As GCCs prioritize talent, digital transformation, and robust security frameworks, they are not only improving operational efficiency but positioning themselves as global innovation hubs. The next frontier for GCCs will be in integrating GenAI into their core business functions to create intelligent workflows, enhance decision-making processes, and offer more personalized customer experiences." 

Subir Mehra, Partner and GCC Sector Leader – Financial Services, EY India, says, "While GenAI offers huge potential for GCCs, navigating the complex tax and regulatory landscape across jurisdictions remains a critical challenge. Further, organisations adopting GenAI across business units need to overcome key implementation challenges across scalability, legacy systems, inconsistent data quality (both input & output) and privacy.”

The EY GCC Pulse Survey 2024 examines the evolving operating model of GCCs, focusing on four critical pillars: strategy, digital, talent and security.

Navigating AI frontiers

The survey asked GCCs about the top three areas where they plan to leverage GenAI capabilities. 69% of firms mentioned customer experience, which includes applications such as automated chatbots, personalized support, and sentiment analysis. This was followed by 57% citing operations as the next focus area, and 47% aiming to leverage GenAI for IT and cybersecurity. Product development, finance, HR, sales, and marketing were also identified as key areas of focus.

Talent first

For 51% of GCCs, growth is increasingly reliant on technology rather than expanding headcount, with a clear emphasis on reskilling staff in emerging areas such as AI. The report finds that data and analytics skills are essential to GCCs, with strong demand for these skills to be integrated into service offerings.

76% of firms are integrating talent from GCCs into core global innovation teams, while 78% are upskilling their internal teams to facilitate GenAI adoption. Business Intelligence (BI) and Data Visualization skills are especially in demand, enabling GCCs to drive deeper insights and create value through data-driven decision-making. For 71% of GCCs, fostering a leadership-driven innovation culture is a key differentiator. Additionally, 34% of GCCs believe driving a "digital mindset" is critical to improving workplace flexibility.

The future of work remains hybrid working model. 70% of survey participants believe that the majority of their workforce will continue to work flexibly for the next 12 months, with only 9.9% of their workforce expected to work entirely from the office. However, this shift does not pose a significant risk to business productivity or service quality. 

Primary tax and regulatory concerns

Among the key tax and regulatory concerns for GCCs, transfer pricing continues to be a notable challenge. When asked about their expectations for supporting growth and expansion, 75% of GCCs highlighted the need for simplified compliance processes, 65% sought tax benefits and incentives, and 60% emphasized the importance of enhanced infrastructure. Additionally, talent development programs and stronger data privacy and security regulations were also seen as important policy priorities.

Balancing technology and risk

The report reveals that the risk of confidential information leaks due to increasing cyber-attacks and data breaches is a top concern for GCCs. With prolonged hybrid and remote work expanding the attack surface, security intelligence and monitoring is a priority for 73% of GCCs. Additionally, 82% of GCCs believe it is crucial to enhance cybersecurity awareness among employees while implementing robust cybersecurity policies and procedures.

Other strategic priorities

GCCs are increasing their budgets for technology and transformation initiatives, with 26% of respondents allocating over 20% of their budget to these areas. 100% of all GCC firms surveyed are championing the climate change and sustainability agenda. Furthermore, 35% of GCCs are focusing on enabling culture imperatives and enhancing their employee value proposition.

About the survey

The EY GCC Pulse survey 2024 was crafted to evaluate the major trends shaping India’s GCC sector, with questions organized around four core pillars: strategy, digital, talent and security (data and cyber). The survey period spanned Aug to Oct 2024. This year’s survey engaged 88 GCCs from diverse industries, with centers in India and additional locations such as the Philippines, Malaysia, Poland, Hungary and Mexico, averaging 1,354 FTEs across sites. The India center headcount represented approximately 20% of the global workforce.

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