4 minute read 14 Jan 2021
Global Capability Centers (GCCs) in the new normal

Global Capability Centers to be the epicenters of efficiency, innovation and modern practices in 2021

By Arindam Sen

EY India Operations and Business Services Partner

Seasoned technology executive with rich experience in digital transformation. Leader in setting up GCCs. Enjoys playing badminton, drums and composing electronic music.

4 minute read 14 Jan 2021
  • Expansions and new incubations of GCCs saw a surge
  • GCCs are increasingly considering reductions in their footprint, converting working spaces into collaboration hubs and shrinking the floors through hot-desking

COVID-19 disrupted many industries and sectors in 2020. Global Capability Centers (GCCs) felt the indirect cost pressures trickling from parent organizations coupled with demand pressures of continuing to deliver business as usual under unusual circumstances.

The year challenged a lot of the traditional ways of working across GCCs, requiring many to bring in drastic changes within a short period of time. However, this was also a year of immense opportunity. Corporations with existing centers looked to enhance their value through the addition of more specialized and complex processes to their service delivery portfolio. With the conventional wisdom of “physical proximity requirements” challenged this year, more processes were earmarked to transition to the centers. Companies that did not have a GCC setup or had postponed their decision to setup one, were back to the drawing board to explore the renewed possibility to add efficiencies and scale to the bottom line and with access to cross border talent that transcended boundaries. Expansions and new incubations of GCCs saw a surge.

The latter half of the year saw an increased focus on accelerating technology initiatives. As the COVID-19 impact was felt across the world, those who had invested in Technology early (mobility devices such as laptops, tablets, collaboration tools, cloud based infrastructure, robust cyber security framework, investments in VPN/VDI and network resilience) were able to move to a virtual working environment with far less disruption, than those who did not.

Cybersecurity investments continued as they had in 2019 with little or no disruption. This was particularly important since the working population was now remote and particularly vulnerable to cyber threats. As expected, workplace technology grew at a faster pace than any other area. Over 90% of the GCC leadership we spoke to had either invested in strong collaboration and communication platforms or were in the process of expanding and strengthening that area. Every single leader we spoke to explored making ‘virtual setups’ efficient, user friendly and less stressful.

A recent study indicated that 54% of new businesses focused on Digital services being delivered out of the GCCs.

The talent pool available to the GCCs became boundary-less with virtualization. As more diverse talent now became a part of the mainstream pool, culture and engagement ruled the agenda with increased emphasis on communication to continue making the virtual employee feel connected to the organization. With culture moving virtual, cues to drive engagement and aligned behaviors moved out from the physical workplace.

Primary caregivers and high quality talent in Tier-2 and Tier-3 cities now were a part of the talent pool. The reach of the GCC to source high skill expanded during the pandemic. The skills being demanded by the GCCs have also evolved from transactional to specialist leading edge competencies.

The role of the office has seen a dramatic shift in the year. With offices being used only for essential activities, large office spaces and designated seating has come under the scanner. GCCs are increasingly considering reductions in their footprint, converting working spaces into collaboration hubs and shrinking the floors through hot-desking. Any additional space that was considered or being planned for was shelved with lease termination clauses being explored for early release of the physical footprint.

With an increased focus on employee health and wellbeing, the office saw physical changes with social distancing norms and safety enhancements being implemented. Digital enhancements in the workplace was another theme with increasing adoption of Employee Health, and Safety apps to monitor COVID exposure of their workforce, providing employees with wellbeing support through digital health services, etc.

Nitee Gupta, EY also contributed to the article.

Summary

In 2021, GCCs will continue to be the epicenters of efficiency, innovation and modern practices. What remains to be seen is the impact the last 9 months will have on the evolution of these centers. While it is too early to call, recent trends indicate that GCC would move to a hybrid model – part physical and part virtual, and highly digital.

About this article

By Arindam Sen

EY India Operations and Business Services Partner

Seasoned technology executive with rich experience in digital transformation. Leader in setting up GCCs. Enjoys playing badminton, drums and composing electronic music.