GCC Partnerships with Startups & SMBs are Driving Innovation and Export Revenues: SBM Offshore

According to a recent Zinnov-Nasscom India GCC Landscape report, there are around 1,700 Global Capability Centers (GCCs) operational in India currently, with 1,100 new centers established between FY2019 and FY2024. This trend is projected to continue, with estimates suggesting that the total number of GCCs could reach 2,100 to 2,200 by 2030. Initially, GCCs operated primarily as cost centers, capitalizing on cost arbitrage benefits. However, organizations have begun to recognize their potential for streamlining and standardizing processes, thereby improving project and service delivery across international offices. This shift has been driven by GCCs’ ability to benchmark and optimize delivery methods across diverse geographical locations. As a result, they have transitioned into incubators of innovation, spearheading digital transformation initiatives to enhance efficiency and agility in response to evolving market challenges. This evolution has been fueled by the integration of cutting-edge technologies and a skilled workforce, driving the adoption of new services, ongoing product development, and sustainable growth.

As of FY2024, GCCs have generated approximately $64.6 billion in export revenue, reflecting a 40% increase from the previous year. The average size of a GCC has expanded by about 24%, with an estimated talent pool of over 1,130 employees per center. To enhance their innovation capacity and agility, GCCs are forming strategic partnerships with startups and mid-market organizations. These collaborations provide access to specialized skills and expertise, enabling GCCs to manage fluctuating workloads effectively and respond rapidly to market demands. Notably, over 120,000 AI professionals are working across GCCs in India, showcasing a robust focus on innovation through collaboration.

GCCs currently employ over 1.9 million people, with projections indicating this number could rise to between 2.5 million and 2.8 million by 2030. Additionally, more than 220 GCC units are located in Tier-II and Tier-III cities, underscoring their crucial role in global expansion strategies. They facilitate access to skilled resources, ensure cost competitiveness, and optimize processes for execution excellence. GCCs also serve as hubs for pilot studies, enabling organizations to remain agile in adapting to market dynamics while establishing local partnerships for growth. However, cultural differences can pose challenges in global project delivery. Targeted training and the establishment of role model behaviors can help cultivate a cohesive company culture, essential for the successful implementation of global strategies.

Compensation packages for top performers must align with or exceed market trends. GCCs can offer competitive benefits packages, including comprehensive health insurance for employees and their families, term insurance, education allowances, annual preventive health check-ups, hospitalization and maternity leaves, and support for higher education. This combination of competitive pay and thoughtful benefits enhances GCC’s talent retention capabilities.

GCCs also prioritize continuous learning opportunities, including short and long-term assignments to global offices for on-the-job training, well-structured training programs both for soft and technical skills, leadership courses for top talent, and exposure to multicultural environments that foster career advancement. Additionally, the intercompany movement presents excellent opportunities for career growth. Key components of retention strategies include clearly defined career advancement paths and regular feedback, ensuring that employees feel valued and engaged.

Creating a supportive work environment and promoting diversity and inclusion are vital factors in attracting and retaining talent. Employee engagement is bolstered by celebrations of achievements, sporting events, and project milestones. Flexible work arrangements, including hybrid employment options, play a significant role in attracting and retaining talent. The opportunity for employees to see projects through their entire lifecycle is another unique advantage.

Micro GCCs, defined as smaller and specialized execution teams within larger GCCs, add unique value through their expertise in specific functions or technologies. Their specialization allows GCCs to respond to multiple project requirements simultaneously with smaller teams while maintaining quality and schedule adherence. Additionally, they develop expertise to frame strategies for successful project execution in an ever-demanding market and client landscape. Micro GCCs can standardize, simplify, and optimize delivery for excellence, setting industry benchmarks.

GCCs have significantly broadened their scope to take ownership of end-to-end processes across various functions such as IT, finance, HR, and R&D. In IT, GCCs have shifted from routine support roles to leading initiatives in digital transformation, cloud migration, and cybersecurity. This evolution enables organizations to implement standardized practices and enhances data governance, aligning technological advancements with global business objectives. Similarly, in finance, GCCs now handle comprehensive financial analytics, budgeting, and forecasting, empowering organizations to make informed, data-driven decisions. By automating routine tasks and leveraging advanced analytics, GCCs provide timely insights that enhance strategic planning and operational efficiency.

In HR, GCCs are responsible for talent management and employee engagement, fostering a culture of innovation through cohesive HR strategies. Utilizing analytics to understand workforce trends allows them to implement targeted training programs that address skill gaps. Meanwhile, in R&D, GCCs integrate cross-functional teams to streamline product development cycles and reduce time-to-market for new offerings. This holistic approach not only improves operational efficiency but also drives innovation by encouraging diverse perspectives and rapid experimentation. Overall, the expanded responsibilities of GCCs position organizations to adapt swiftly to market changes and meet evolving customer needs, ensuring long-term success in a competitive landscape.