How GCCs are evolving into global value organizations

How GCCs are evolving into global value organizations

Authors

  • Arindam Sen

    EY India Global Business Services & Operations Partner

  • Subir Mehra

    EY India Operations and Business Services Partner

3 minute read 22 Sep 2023
Related topics
Consulting
Workforce
Technology

The Global Capability Center (GCC) Pulse Survey for 2023 highlights the current trends and priorities of GCCs across various geographies and functions.

In brief

  • 86% GCCs cite service expansion as their top business priority.
  • 55% have established a mature data and analytics practice as part of their digital strategy.
  • 77% GCCs continue to operate on hybrid mode.

The Global Capability Centers (GCC) industry in India maintains a bullish outlook, placing growing emphasis on value-added services that are propelling them towards becoming Global Value Organizations (GVOs). EY has been closely collaborating with GCCs in India for over 17 years. For our GCC Pulse Survey 2023, we engaged with 87 GCC leaders to gain insights into the industry’s strategic imperatives. 

The participating GCCs have established their centers not only in India but also in regions such as Argentina, Poland, and Malaysia, with an average workforce of 1,340 full-time employees spread across these locations. Notably, their headcount within India centers accounted for nearly 25% of the global workforce. This year’s GCC pulse survey explores priorities across four pillars: strategy, digital, talent, and security.

Future of GCCs in India: leadership dialogue

As GCCs evolve and progress up the value chain, our captivating video series aims to provide valuable insights to GCC leaders and government officials about the industry’s future prospects.

Know more

Strategic pathways

The report finds that GCCs are expanding their services beyond IT, Customer Interaction Services, Finance, HR, and Supply Chain, and are exploring domains like Marketing, Legal, and ESG (Environmental, Social, and Governance).

 

Key priorities

 

In 2021, a mere 17% of GCCs were actively involved in supporting global sustainability and integrated reporting. However, as of 2023, this figure has surged to 47%, signifying a substantial increase in the number of GCCs supporting sustainability initiatives, that involves environmental data analysis, sustainable supply chain management, and corporate social responsibility reporting. 

 

Nurturing digital horizons

 

While the adoption of Metaverse and Blockchain technology has not gained significant traction in comparison to other technologies, our survey shows that 55% of participants have reached an advanced stage in using data and analytics as part of their digital strategy. This is closely followed by cybersecurity and robotic process automation, both of which play crucial roles in supporting GCCs’ digital transformation efforts and driving value across various business functions. 

A global life science GCC has created an innovative digital solution for laboratory water system management, which offers features like remote monitoring, efficient support, and seamless access to critical data, all aimed at boosting laboratory productivity. 

Key priorities of GCCs

A major retail company has leveraged an India-based GCC to revamp its technology infrastructure, resulting in the development of a global e-commerce platform. This modernization has enhanced agility and enabled the delivery of timely and relevant client experiences.

Putting Human@Center

According to the survey, GCCs have experienced an average attrition rate of 12.5%, with nearly 60% reporting attrition rates falling between 5% and 15%. Interestingly, about three-fourths of the survey respondents expressed concerns that increased attrition, driven by the competitive talent landscape, continues to pose a high to medium risk for their business.

Over the past 12 months, the synergy between the GCC sector and start-ups has led to the creation of new products. Additionally, GCCs are offering a range of learning opportunities to their workforce, with the goal of up-skilling and cross-skilling, thereby strengthening their operational capabilities. 

Addressing scalability in operations

The GCC industry has a well-developed future of work strategy and consistently adapts to the evolving dynamics of work in the modern landscape. However, participants acknowledge the growing and evolving necessity to redefine their Employee Value Proposition (EVP), with 38% of survey participants planning to implement changes in their EVP.

Risk to resilience

With the hybrid work model becoming the new normal for GCCs in India, leakage of confidential information due to increased cyber-attacks is seen as a major threat to operations. Today, GCCs are better positioned to manage cyber security requirements, where 92% of respondents stated that they have a robust cybersecurity policy and a protected network, as compared to 43% in 2021. However, the increased risk of data breaches stemming from remote and hybrid working arrangements remains a cause for concern, given the evolving tactics employed by cyber attackers and the constantly changing threat landscape.

Remote / hybrid working arrangements

Download the full pdf

PDF (2 MB)

How EY can help

Related articles

Selecting a future-fit chargeback model: an imperative for GCCs

EY highlights selecting the right chargeback model is crucial for fair cost allocation, efficient resource utilization, accurate budgeting, and fostering collaboration and innovation within the GCC.

Arindam Sen + 1

How India is gearing up for a US$110b GCC industry by 2030

Discover how GCCs in India are expected to become even more critical to the global IT and business services industry by 2030. Know more about India's GCC industry.

Arindam Sen

How are GCCs delivering value while optimizing cost and operations in a changing environment?

Find out how GCCs have a seat at the elusive strategy table and are focusing more on value adding niche capabilities amid increasing overall cost.

Arpit Dharma Arpit Dharma + 1

    Summary

    The outlook for GCCs in India is promising, as they are poised to play an even more significant role in  their parent organizations. There will be an increased emphasis on research, innovation, digital transformation, ESG, and enhancing the EVP (Employee Value Proposition). To maintain global competitiveness, we anticipate that GCCs will continue to expand their services and improve operational efficiency through digital skills and technologies, enabling the transition of GCCs from ‘Capability Centers’ to ‘Value Creators.’

    About this article

    Authors

    • Arindam Sen
      EY India Global Business Services & Operations Partner
    • Subir Mehra
      EY India Operations and Business Services Partner
    Related topics
    Consulting
    Workforce
    Technology

    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.