4 minute read 17 Mar 2022
Top trends of Global Capability Centers in India for 2022

Top trends of Global Capability Centers in India for 2022

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 17 Mar 2022

As GCCs prepare for employees’ return to office the priorities of GCC Heads must reflect upon the key business imperatives.

In brief

  • Many GCCs are shifting towards technology and innovation-led initiatives to become a global innovation hub.
  • EY’s top five trends for GCCs in India for 2022 are – increasing investment in technology resources, hiring and reskilling for niche skills, redefining Employee Value Proposition (EVP) in the post-pandemic era, hybrid working model and threat from cyber-attacks.

Today, the priorities of Global Capability Centers (GCCs) has shifted from back-office tasks to technology and innovation led initiatives. Their understanding of organizational resilience has further strengthened post the pandemic, and GCCs in India are making a continuous effort to recalibrate their existing operating model. They are also diversifying their talent pool and making key investments in digital technologies to become the global innovation hub for their parent organizations. Currently, as GCCs prepare for employees’ return to office, the priorities of GCC Heads must reflect the key business imperatives, including growth, innovation and scalability. GCC Heads must find the right multipliers backed by digital technologies to enable these business imperatives. 

We are increasingly seeing product-based innovation, use of technologies like artificial intelligence and analytics to drive process efficiency and enhanced service portfolio becoming key business drivers. With the abundant skilled digital talent in India and keeping future of work central to their strategy, GCCs can deliver on their digital transformation agenda.
Arindam Sen
EY India Operations and Business Services Partner
  • Increasing investment in technology resources: During the pandemic, we saw GCCs shift their ERP and legacy applications to the cloud and increase adoption of technologies such as advanced analytics, artificial intelligence, machine learning, among others, across different functions. This surge in investment in technology resources, be it tech talent, data mining and processing, tech tools, etc., will only pick up pace in the coming year as there is a massive demand from the parent organizations for the GCCs to drive innovation and become tech hubs for the organization.

  • Hiring and reskilling for niche skills: In the post-COVID era, we have seen the emergence of a war for talent across industries, and GCCs are no exception. Inability to attract and retain talent and upskilling the existing workforce with niche skills is poised as a major risk for GCCs in India. The war for talent has also led to an increase in people costs due to higher salary costs from talent possessing next-generation tech skills and niche skill sets. To counter this, we expect a higher focus and increased investments by organizations to hire and reskill workforce with niche skills (i.e., AI/ML, blockchain, data analytics, Natural language processing, among others) through lateral and campus hiring, and thereby, expand their talent pool for niche skills. This will in turn enable the GCCs to deliver customized digital solutions and services to their customers.

  • Redefining Employee Value Proposition (EVP) in the post-pandemic era: One aspect which is becoming increasingly clear is that employee expectations have shifted over the course of the pandemic, thereby giving rise to higher attrition rates for GCCs in India. This phenomenon requires GCCs to review and redefine their EVPs going forward. The EVP must be scrutinized and augmented across four main areas¾ organizational culture, nature of work, career growth and rewards and compensation. As the competition for talent continues to intensify with the evolution of new working models and with the pace of development of the EVP over the last 20 months, EVP warrants closer attention and active review by HR leaders. We expect GCCs to reimagine their EVPs across the four areas in 2022 to avoid long-term risk of losing competitive advantage due to higher salary and attrition.
  • Hybrid working model: At a recently hosted EY GCC Leadership Forum, a virtual discussion with leaders from GCCs leaders across sectors and functions, the prime focus was on a hybrid working model and the need for flexibility, for both employees and employers. We expect the hybrid working model to become the new normal going forward in 2022 and a natural choice for GCCs in India. Hence, there is an urgent need to develop necessary policies keeping in mind employee productivity and well-being, company culture and business operations, to ensure long-term hybrid workplace success.

  • Threat from cyber-attacks: In the last 12 months we have seen more instances of data breach due to remote working as compared to earlier years and loss of confidential information owing to increased cyber-attacks. This threat is likely to increase in 2022 on the back of digital transformation initiatives, hybrid working model, misinformation campaigns, ransomware attacks, deepfake technology, among others. GCCs should stay aware of these risks and make sure that they have the suitable solutions and measures in place to prevent them without disrupting their normal business flow.

(Sayan Banerjee and Saket Khanduri, Senior Managers at EY also contributed to this article.)

Summary

Global Capability Centers (GCCs) in India are making a sustained effort to recalibrate their existing operating model to become the global innovation hub for their parent organizations. To recalibrate and align their efforts towards becoming a much more strategic function, five key trends have emerged strongly which have been articulated in the article here. 

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.