India is emerging as a top destination for companies to set up their Global Competency Centers (GCC). Estimates suggest that by 2025, India will have 200 new GCCs. In the next three years, GCCs will acquire nearly 45-50 million square feet of office space, which will contribute to over 40% of the country’s office leasing activity.
All thanks to India’s robust economic growth and thriving talent market, offshoring is on the rise. Today, companies prefer India over other countries because of its current value propositions and the anticipated value it will generate for businesses.
But this wasn’t the case a few years ago.
Companies would set up their offshore operations in India for cost-savings. They outsourced backend functions, where the India team didn’t own the outcomes. Their role was limited to enabling businesses to focus on the core functional areas.
Things are changing now.
Businesses are quickly moving from looking at India as their “backend outsourcing destination” to a “strategic hub” for innovation and growth. India has now emerged as an innovation center for building new products at par with the best in the world. Tesla, Triton Electric, Bloom Energy are some of many companies bringing their end-to-end product development functions to the country.
The growing infrastructure, availability of high-quality talent, ease of doing businesses, and economic growth are key reasons companies now invest in India for their offshore operations. But most businesses look at the obvious and often miss on deep-rooted, long-term benefits that India can bring for them.
The hidden benefits of India expansion
Cost savings has always been one of the primary benefits for businesses moving their operations to India. Easy availability of quality talent at almost at one third of the rates in US has always been an attractive proposition. But there are growth levers that go beyond cost optimization.
- Nurture Global Leadership
India has a pool of talented, smart, and dedicated individuals[NM1] , willing to upskill and build leadership competencies. With the second largest collective of MBA graduates in the world, companies can access the best talent. GCCs are now hiring and - Expand Innovation Capabilities
India has a wide startup ecosystem that is ready to incubate new ideas by offering ready-to-utilize infrastructure and talent. By setting up a GCC in India, businesses have the opportunity to diversify their innovative capabilities and partner with startups as incubations centers for their future growth. It also offers them faster market launch for new products in the market. - Run Business 24/7
Having a GCC in India entails 8-12 hours of time zone difference from offices in the US, Europe and other countries. This enables companies to run their operations 24×7 from multiple locations. When the head office team wraps up their work, the India team can take over where they left and continue to work on the project. With operations always on, companies can achieve shorter product development lifecycles, which allows them to stay agile and become market-responsive. - Partner with top B-schools
Companies setting up their operations in India have the advantage of partnering with some of the top B-schools and campuses in India to attract top talent as they graduate. It drastically reduces their cost of acquiring new talent and brings individuals who have real-world project experience. Such strategic partnerships will help companies build a strong employer brand in India. As they tap into fresh talent from top campuses, they can also ensure a [NM2] continuous inflow of skilled employees.
- Leverage the growing GCC Ecosystem
As more and more companies establish their trust with Indian partners, the GCC ecosystem continues to evolve. Today, it offers everything – from robust infrastructure to streamlined processes to highly-skilled talent. But the ecosystem also offers quick support for problems and a toolkit to navigate the complex GCC landscape. Partner companies in India that help set up offshore operations are now providing innovative solutions that can resolve all the challenges in the process.
Capitalize on India’s Offshoring Potential Now
Today, India has proven to be a preferred destination for offshoring business operations. Nearly 1,600 centers [NM3] have already been set up while over 200 are on their way. Therefore, the question has shifted from “should we setup a GCC in India?” to “how should we setup a GCC in India?”
Companies must be confident to start their operations in India because of the low risk and lower cost of experimentation that add to the value proposition. In the next couple of years, India is set to become a leading destination for MNCs as they see the huge potential of the Indian market, talented individuals, and the government legislation in favor of foreign investment.
As more and more businesses set up shop in India, the competition will heat up. The cost of talent acquisition, infrastructure, and more will rise.
Such complexities can be challenging to navigate, especially when businesses do not understand the India market. The rules and regulations can be scary, infrastructure costs can soar without local partnerships, and talent can leave without a thought if the business misses aligning their operations with the country’s culture.
Therefore, businesses need to act now and capitalize on the GCC ecosystem by partnering with professionals who can help them navigate these complexities. They need a GCC company that can take care of everything and mitigate establishment risks – from regulations to infrastructure to managed services – and kickstart the offshoring journey as quickly as possible.
[NM1]add some numbers on MBA grads and engineers coming to talent market every year
[NM2]this can be clubbed with the first point on leadership talent
[NM3]source and time period