GCCs are driving innovation and digital transformation: Avaali

Avaali is a prominent digital solutions provider, specializing in cost-effective solutions for upper mid to large enterprises. With over 160 successful engagements across Asia, MEA, and parts of Europe, Avaali has demonstrated expertise in shared service automation, delivering significant reductions in process cycle time (35-50%) and costs (10-15%). 

Operating under Velocious, Avaali offers both product lines and consulting services in collaboration with various technology vendors, focusing on improved visibility, governance, and transparency. Notably, Avaali is a leader in procure-to-pay automation, boasting over 100 successful implementations in this domain.

Srividya Kannan, Founder and CEO, Avaali Solutions, tells us more. Excerpts from an interview: 

DQ: What services does Avaali offer, and how do your clients benefit from them? Additionally, how has Avaali assisted organizations in establishing and automating GCCs/shared Service centers?

Srividya Kannan: Avaali's approach prioritizes cost optimization, thoroughly evaluating organizations' operational and functional business processes. Guided by three foundational pillars, our operational framework ensures a comprehensive strategy for our clients.

The first pillar, Global Business Services (GBS) or Shared Services, involves aiding companies in establishing captive shared services. From developing visionary frameworks to identifying integral functional business processes, we guide clients through adopting new technologies and maximizing existing investments. 

We craft blueprints and actively implement strategies, handling projects of varying complexities, including transitions from outsourced to in-house operations and expanding existing services. Avaali's successful track record is evident in our assistance to over 100 large organizations globally in setting up or automating their GCCs/shared service centres' business operations, including companies like Bidco Africa, UPL, Compass Group, etc.

The second pillar focuses on creating digital workplace solutions, utilizing cutting-edge tools like intelligent document processing, workflow automation, records management, and digital signatures. These innovations enhance stakeholder experiences and contribute to reduced costs, shorter cycle times, and increased agility, demonstrating our commitment to delivering value and operational efficiency across various business domains.

Our third pillar is dedicated to automation, empowering organizations to significantly shorten process cycle times through solutions like robotic process automation (RPA) and process mining. This focus on efficiency is a key part of our commitment to delivering value and operational efficiency across various business domains.

Our commitment to these pillars has enabled over 300 large enterprise customers to substantially reduce cycle times, ranging from 40% to 70%, while lowering operational costs.  

For instance, we supported one of the largest FMCGs in East Africa – Bidco Africa, to set up their shared services for AP, AR, supplier onboarding, MDM and several F&A processes, enabling 55% touchless invoice posting, 40% cycle time reduction for reconciliation processes, 50% for AR processes and over 70% for Master Data process. This significant impact reflects our dedication to delivering value and operational efficiency across various business domains.

DQ: How has the role of GCCs evolved from cost-saving centers to strategic value-adding units for global enterprises?

Srividya Kannan: Global Captive Centers in India have undergone a significant strategic shift within global enterprises. They have evolved from being cost-saving centers to becoming strategic value-adding units. Initially established primarily for cost advantages, GCCs are now integral to their parent companies' operational and strategic frameworks. 

They focus on delivering high-value services, including research and development, innovation, and advanced technology solutions, which are critical for driving business success in a competitive global market.

One key factor in this evolution is the emphasis on talent development and retention. GCCs have emerged as attractive destinations for skilled professionals, offering opportunities to work on cutting-edge technologies and complex projects. This focus on nurturing talent enhances the capabilities of the GCCs, and ensures that parent companies benefit from a highly skilled workforce that can contribute to innovation and strategic initiatives.

Furthermore, GCCs are at the forefront of driving innovation and digital transformation for their parent firms. By harnessing emerging technologies such as AI, ML, and cloud computing, GCCs are developing innovative solutions that cater to evolving market demands. This agility enables parent companies to swiftly adapt to changing customer needs and market dynamics, reinforcing the strategic importance of GCCs.

Additionally, GCCs foster collaboration and knowledge sharing between their parent firms and the local ecosystem in India. By partnering with startups, academic institutions, and research organisations, GCCs are at the forefront of innovation, ensuring their parent companies remain competitive and relevant. 

This collaborative approach enhances the overall value proposition of GCCs, making them integral to their parent organisations' global strategy and success. In summary, GCCs have transitioned into vital strategic assets that significantly contribute to the growth and innovation of global enterprises.

DQ: How do you see GenAI transforming specific functions within GCCs and GBS, such as procurement, supply chain management, and customer service?

Srividya Kannan: GenAI is set to revolutionize various aspects of GBS and GCC operations, spanning from initial setups to well-established functions covering sourcing, procurement, supply chain, HR, legal, customer service, and more. Noteworthy applications include automated document creation and summarization for processes such as RFIs, RFPs, proposals, and contracts.

Intelligent NLP chatbots powered by GenAI offer stakeholders access to pertinent information from multiple sources, addressing needs like customer delivery status inquiries. There's a significant opportunity to delve deeper into supplier profiles, considering factors like ESG, risk assessments, market research, and production impacts to enhance order fulfilment and bolster enterprise resilience.

In supply chain management, GenAI facilitates demand forecasting, seasonal promotion recommendations, and anomaly detection, thereby optimizing inventories and enhancing working capital management. The potential use cases extend to warehouse layout design and talent sourcing.

Across the spectrum of GBS processes, GenAI presents extensive possibilities for transformative applications. Its adoption promises substantial efficiency gains and the exploration of new frontiers through disruptive innovations in this domain.

DQ: Can you elaborate on AI's potential to enhance decision-making processes within GCCs, particularly in areas like supplier risk assessment and demand forecasting? 

Srividya Kannan: AI holds significant potential to enhance decision-making processes within Global Capability Centers (GCCs), particularly in areas such as supplier risk assessment and demand forecasting. The integration of AI enables GCCs to leverage advanced analytics, automate processes, and provide actionable insights that drive strategic outcomes.

In supplier risk assessment, AI can transform how GCCs evaluate and manage supplier relationships. By integrating vast datasets from internal and external sources, AI can analyse supplier profiles, assessing factors such as sustainability practices, financial stability, and compliance with regulations. 

This comprehensive approach allows organizations to visualize supplier performance and identify potential risks more effectively. For instance, AI can automate the creation of Requests for Information (RFIs) and Requests for Proposals (RFPs), summarising supplier contracts and profiling suppliers to streamline the procurement process. This capability enhances compliance management and supports proactive decision-making, enabling GCCs to mitigate risks before they escalate.

In terms of demand forecasting, AI offers powerful tools for optimising inventory management and enhancing operational efficiency. By utilizing predictive analytics, AI can analyze historical sales data, market trends, and external factors to generate accurate demand forecasts. This capability allows GCCs to make informed decisions regarding inventory levels, seasonal promotions, and supply chain adjustments. 

Furthermore, AI can identify anomalies in demand patterns, enabling organisations to respond swiftly to unexpected changes in consumer behaviour. This proactive approach improves working capital management and enhances overall supply chain resilience.

Beyond these specific applications, adopting AI in GCCs fosters a culture of innovation and agility. AI empowers decision-makers to focus on strategic initiatives rather than operational details by automating routine tasks and providing predictive insights. Additionally, the ability to quickly adapt to changing market conditions positions GCCs as vital partners in their organizations' growth strategies.

DQ: Elaborate on the expansion of GCCs in Tier 2 cities and towns, shedding light on the talent pool and digital infrastructure available.

Srividya Kannan: The expansion of Global Capability Centres into Tier 2 cities in India represents a significant shift in the operational landscape, driven by the availability of a skilled talent pool and improving digital infrastructure. Initially concentrated in major cities like Bengaluru, Pune, and Hyderabad, GCCs are now establishing a presence in emerging cities such as Ahmedabad, Jaipur, Mysuru, Indore and Coimbatore, capitalizing on the unique advantages these locations offer.

One of the primary drivers of this expansion is the rich talent pool available in Tier 2 cities. Approximately 11-15% of India’s tech talent resides in these regions, with a growing number of graduates entering the workforce each year. 

The cost of talent in Tier 2 cities is significantly lower—25-30% cheaper than in Tier 1 cities—making it an attractive option for multinational corporations looking to optimise operational costs. Moreover, many skilled professionals who previously migrated to larger cities for employment are now choosing to remain in their hometowns, further enriching the local talent landscape. This trend is bolstered by government initiatives aimed at skill enhancement, particularly for women, promoting inclusivity and diversity in the workforce.

The digital infrastructure in Tier 2 cities is also improving rapidly, providing the backbone for GCC operations. As companies increasingly seek to establish GCCs in these locations, local governments incentivise this growth through favourable policies, including payroll subsidies and infrastructure development initiatives. This has led to a robust ecosystem that supports the establishment of GCCs, enabling them to deliver high-value services such as technology, cybersecurity, advanced analytics, and research and development.

The establishment of GCCs in Tier 2 cities not only generates direct employment but also stimulates local economies through secondary benefits. These centers drive innovation, enhance operational efficiencies, and create opportunities for local businesses through extensive supply chains. As GCCs continue to expand, they are expected to contribute significantly to regional development, alleviating urban burdens and promoting a more balanced economic growth across the country.

DQ: How do you see the role of GCCs in India evolving over the next 5-10 years?

Srividya Kannan: Global Capability Centers in India are poised for significant growth and evolution over the next 5-10 years, driven by the country's abundant talent pool, technological expertise, and favorable business ecosystem.

India's deep talent pool, renowned for its understanding of functional business processes and proficiency in cutting-edge technologies, positions the country as a premier destination for Global Business Services (GBS). This unique blend of skills enables India to excel as both a developer and an expert in integrating emerging technologies like artificial intelligence, machine learning, and cloud computing with business operations, driving impactful outcomes.

While Tier 1 cities have a significant percentage of the installed GCC talent, a noticeable trend of Tier 2 and Tier 3 cities is rapidly catching up. These emerging cities offer attractive real estate propositions, with multiple options available to accommodate GBS operations. 

Factors such as increased talent availability at reduced costs, improved infrastructure, and favourable government policies are creating a much sought-after business ecosystem for GCC expansion in Tier 2 and Tier 3 cities.

The role of GCCs in India is also expected to evolve significantly over the next 5-10 years. Initially focused on enabling functions, GCCs have transitioned to technology enablement, business operations, and capability development. They are poised to build niche competencies, cultivate global leadership, monetize services, and drive innovation and digital transformation for their parent organizations.