NASSCOM Study Highlights Key Drivers for GCC Growth in India

Amidst the complexities of the modern business environment, the Global Capability Centre (GCC) ecosystem in India is solidifying its role as a growth and innovation catalyst. A new study by NASSCOM, in partnership with KPMG in India, reveals critical insights for GCCs shaping their future strategies. The report, titled "GCCs in India: Building Resilience for Sustainable Growth," was unveiled at NASSCOM's annual GCC Conclave in Bengaluru. The findings are based on surveys and interviews with top executives from a diverse range of GCCs in India.

As of FY2023, India hosts over 1580 GCCs, with new centers being established each quarter. Factors such as access to a vast pool of digitally skilled talent, the drive to adopt new technologies, and the focus on enhancing customer impact are propelling the growth of GCCs in the country. This upward trajectory is expected to continue over the next few years, with more global players building technology centers and transformation hubs in India.

However, this rapid expansion also brings challenges that need addressing as GCCs evolve. The report identifies four critical areas for GCCs to focus on as they ascend the value chain: talent management, strategic adoption of emerging technologies, regulatory navigation, and addressing concentration concerns.

Navigating the Evolving Talent Landscape

As GCCs in India transition and expand their roles, there is a rising demand for high-value digital skills in fields such as automation architecture, cloud development, AI/Machine Learning, and Data Science. The competitive talent market poses challenges in talent availability, attraction, and retention. Building a pipeline of deployable talent with emerging skills and nurturing talent for global leadership roles have become key concerns.

To tackle these challenges, GCCs are employing innovative workforce strategies like Hire-build-scale, borrow-augment, and co-create models. These strategies ensure a steady supply of skilled professionals to meet current and future business needs. Additionally, GCCs are implementing measures to develop future-ready leadership and enhance functional capabilities for global roles.

Futureproofing GCCs with Emerging Technologies

GCCs are transforming from traditional centers focused on transaction delivery and cost optimization to strategic hubs driving innovation and value creation through the adoption of emerging technologies. These centers are developing capabilities in areas like GenAI and optimizing GenAI governance processes for global organizations. GCCs must rethink, redefine, and reimagine their approaches, leveraging a four-tiered transformational ecosystem for technology adoption. Key strategies include continuous skill development, minimizing the impact of tech implementations on customer experience, and fostering an innovative workforce with strong cultural values.

Navigating Regulatory Compliance

Regulatory compliance is a major concern for GCCs, with over 55% of leaders highlighting its importance. Key regulatory considerations include transfer pricing, SEZ/STPI regulations, and labor laws. To address these, the report introduces a self-assessment compliance maturity framework, enabling GCCs to evaluate their regulatory standing and ensure adherence. Proactive engagement with regulatory frameworks is crucial for sustained success and reinforcing India's position as a global business hub.

Addressing Concentration Concerns

The report emphasizes the need to de-layer concentration concerns, which go beyond mere headcount evaluations. By adopting diverse metrics, GCCs can identify critical exposures, assess potential vulnerabilities, and implement proactive measures to mitigate risks. Comprehensive reporting to global organizations is also essential.

Industry Insights

Srikanth Srinivasan, Vice President at NASSCOM, commented, “The remarkable growth of GCCs in India is driven by various factors. As GCCs advance, adapting to blurring geographic borders and technological disruptions, they continuously navigate the dynamic risk landscape to succeed.”

Shalini Pillay, India Leader – Global Capability Centre, KPMG in India, added, “India is poised to attract more global players to establish and scale their GCCs in the next few years. As these centers build, innovate, and adopt new operating models influenced by emerging technologies, they are fortifying their resilience in a dynamic risk landscape.”