More than cost-cutters: GCCs are also a strategic investment for growth

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Let’s face it – cost optimization is the major reason most companies establish their global competency centers (GCCs) in India. I have come across several MNCs that have set up their offshore operations to reduce operational costs. But what if I told you that setting up your GCC in India can be a strategic investment for achieving business growth rather than just an establishment for saving a few bucks?

We all can agree that India has long emerged as a sought-after destination for global companies. Companies are investing in skilled Indian talent. The infrastructure is top-notch yet inexpensive. And the government is highly welcoming companies looking to set up their base in the country.

Traditionally, companies came to India to delegate their back-office operations. They have looked at offshore centers as spaces that carry out their support functions. But times have changed. Companies are looking beyond cost savings and delegation of secondary activities. Today, several of these Indian captive subsidiaries or GCCs as they are now called have become hubs for innovation and operational excellence.

While offshoring back-office operations is all well and good, there’s a whole world of untapped potential that GCCs can offer. Here are a few areas that come to my mind which can transform India setup into a growth engine for companies –

  1. Achieve R&D Excellence
    India is slowly rising as an innovation hub, which means better opportunities for research & development. Investments in advanced research and intelligent engineering is rising, leading to growth of skilled talent for R&D. And for the same cost in India, you can 3X your team and R&D capabilities, with added excellence and skills. We can witness the evolving R&D infrastructure and talent in India that is now open to MNCs looking to innovate with India’s capabilities.

  2. A Global Marketing Team
    I have always thought of marketing as a worthy offshoring function. Today, marketing is more than flashy campaigns – it involves a lot of data analytics, content creation, and campaign management. Companies need people who can assemble all these things together, do the laywork, and even provide ideas for marketing execution. It also helps them build from one capability to another. Imagine you outsource for UI development and get additional support for website maintenance and digital marketing. A win-win scenario.

  3. Harnessing Consulting Power
    We are witnessing an explosion of companies eyeing towards India for harnessing its prowess in consulting. By hiring smart B-school graduates from the top institutes in India, companies can build their consulting function without the complexities and costs involved in building a team on-site. While it starts with tasks like creating presentations and putting together data, as their experience grows, these consultants would be available to take on global roles as the business grows.

These are just a few examples. There are other successful offshore based teams that manage global sales lead generation, HR recruitment among others. History has shown that those who look at this as an opportunity beyond cost arbitrage, will benefit immensely over time.

I think it’s a great opportunity for companies to capitalize on the potential of these areas by setting up a GCC in India. Conventionally, companies have been less considerate towards these functions. The limited nature of such functions and a lack of confidence were the key reasons why companies didn’t consider separate centers for them. But as India continues to evolve in its talent and infrastructure, I am sure companies will be more than willing to invest in these areas.

In such case, I would suggest the virtual plug-and-play model for offshore setup. This model, also known at CaptiveAide as warehousing, enables companies to quickly setup their operations in India without any hassle. All the employees are under the payroll of the GCC company, and they take care of all the infrastructure needed to successfully establish their India arm.

Companies like Oracle have successfully brought important functions to India, which are now delivering impact and contributing to business growth. It established a highly successful tele sales team, housed in India, calling prospects all over the world and driving sales. Tied to an account manager, their team became more efficient, and became a strategic hub for increasing revenue.

While moving functions to India helps in cutting cost, I believe some companies have restricted GCCs to only such activities. There are areas, which are by their very nature, small and don’t allure companies in setting up a separate entity. But leveraging the talent, infrastructure, and ease of doing business in India, companies can transform these functions as drivers of business growth rather than just support activities.

Can companies build GCCs for key functions that drive business growth? I believe they are ready to take the leap.

What do you think?

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Girish Kamath

Sr. Partner, Head – GCC Operations

30+ years in the Indian IT industry. 18+ years of experience as a Managing Director building and running Global Competency Center (GCC) captives. Built and operationally managed 1800+ resources across multi-city, multi-functional GCC for a leading US gaming company for over 10 years. Subsequently has built 5 additional GCCs in India.

Earlier in his career, he managed large, distributed programs for global customers across Europe and US for a large global IT services company.

Suma Subramanian

Co-founder and Managing Partner

30+ years experience in People Management, Human Resources Strategy, Design, Change Management and Operations. Formerly, Chief People Officer with a leading Infrastructure Management services company and before that, with one of the world’s largest IT services firms, managing HR for their largest business division with 10,000+ workforce and responsible for their key “Best Employer practices” in her corporate HR role

Transitioned captive operations for some of the world’s largest financial institutions. As the HRO Practice Leader, she is responsible for creating the high-performance workplace, creating a work culture that mirrors the GCC parent.

She is an Executive Coach, and is Certified in Change Leadership from Cornell University, a Certified NLP Practitioner, a Lead Assessor ISO9001 & Assessor BS7799

Narayanaswamy H (aka Swamy)

Co-founder and Managing Partner

35+ years of Finance and Operations experience with over two decades of CFO/COO level experience with global companies. Significant experience in Mergers & Acquisitions, raising Capital, post merger Integration

Been an advisor to several global enterprises and their offshore capability centers As CFO for the captive delivery center of one of the largest decision sciences companies, played a key role in growing it to 2000+ people. Prior experience includes setting up MNC subsidiaries including legal, regulatory and compliance matters

Jawahar Bekay

Founder & Managing Partner

Established CaptiveAide in 2016 as a specialist consulting and operations capable firm dedicated to helping companies from outside India to set up their captive entities or what are now called Global Capability Centers or GCC.

35+ years in the global IT industry with over two and half decades as CEO and strategic-level experience with global enterprises and markets. Co-founded one of India’s leading IT services companies in the infrastructure space. Co-founded Asia’s leading internet software development company. Global head of strategy and CEO for Indian captive operations for a $350M IT services company.

He has worked with large F500 and Global 200 clients in successful offshoring strategies both service provider and captive. Has built, acquired, integrated and managed multiple, cross-border companies.

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