4 minute read 24 Jun 2020
Virtual global capabilities center

Virtual global capabilities center is not the Future, it is the ‘Now’

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 24 Jun 2020
Related topics Consulting COVID-19

To embrace the ‘new normal’ successfully global capabilities centers will have to keep their employees engaged to ensure success post COVID-19.

COVID-19 has caused a lot of industries to rethink operating models as they emerge from the crisis. The global capabilities centers (GCCs) segment is no different. As the crisis unfolds, thoughts on the future have started to mature as well. Most, if not all, GCC leaders have started preparing for a sustained remote working scenario. Some leaders have also started to think more aggressively and are contemplating a permanent remote working model for many of their employees.

As we already know, remote working scenarios cut out a lot of the common challenges that employees face, such loss of productive working hours, especially in the mornings, in long commuting time. From an employer’s perspective, working remotely significantly reduces the spend on real estate, transportation and other associated costs. With the increase in productivity, there is an overall decrease in manpower requirements, ultimately reducing costs which generally constitute 70% of the total operating costs of any GCC. As per EY Cost Benchmarking Study, a virtual GCC has the potential to reduce operating cost by 25% and increase agility within the organization.

There are other implications of a remote working model that go beyond the cost discussion. For example; recruitment of new talent can now be truly borderless within a country. No longer is it required for a resource to be physically attached to the same location as the GCC. They can be anywhere in the country if they have reliable connectivity and a home office.

However, any new operating model also comes with its own set of challenges. How to keep the workforce motivated, engaged and productive in a permanent remote working scenario, is a question that many leaders are asking. Further, how do you incorporate the DNA of an organization into new employees remotely is a bigger challenge. A lot has also been recently written about the mental and emotional impact of working isolated with minimal interaction. Almost 80% of GCCs have re-allocated spends to Employee Wellbeing to support their workforce.

When thinking about a virtual GCC setup attention must be paid to the following core areas 1) regulatory and policy 2) performance measurement 3) technology 4) people and 5) culture.

While the ‘Now’ has been characterised by a large telecommuting workforce with little preparation for sustained work from home, the challenges identified need to be addressed systematically over the course of ‘Next’ and ‘Beyond’ to thrive in a virtual environment. The actions in the ‘Now’ were ad-hoc, to get the business up & running in a virtual model at short notice, considering spot-fixes to get by.

The approach for the ‘Next’, in the Transition to the virtual model. Here, the GCCs focus only on the aspects to move from a physical model to the virtual model. How would performance be measured for the same metrics as right now, in the virtual environment? Do my policies support a virtual working model? How do I re-look at my data, network and IT security in the virtual model? Etc.

During this phase, ongoing transformation initiatives continue in the background, but GCCs are considering new initiatives across the five pillars, in incremental steps, to manage change for the people and organization.

GCCs will look to incorporating end-to-end transformation, to leverage the virtual model to its full potential. Hire-to-Retire digitalization focused on self-service, is being evaluated by GCCs, to cater to their virtual workforce.
Arindam Sen
EY India Operations and Business Services Partner

In the ‘Beyond’, GCCs will look to incorporating end-to-end transformation, to leverage the virtual model to it’s full potential. In this phase, the GCCs will look at re-imagining the new operating model and cater to the virtual workforce. Hire to Retire digitalization focused on self-service, is being evaluated by GCCs, to cater to their virtual workforce.

All the GCCs have already started updating their policies to enable the remote worker. Over 80% of the GCCs had already embarked on a digital transformation journey, with technology interventions including robotics, AI and ML to enhance the effectiveness and efficiency of the workforce. Over 70% of the GCCs are looking at technology driven performance measurement tools in the virtual workplace. People wellbeing and culture alignment are the key focus of HR leadership, to pave the way to an engaged and motivated workforce, functioning as a cohesive team.

With all the GCCs deliberating, individually and as an industry, on how they navigate the challenges posed by this shift in the ways of working, ideas are being exchanged and insights derived from experiences. It is evident that their ability to successfully embrace the ‘new normal’, while keeping their employees engaged, will determine their success in the post COVID-19 world.

The article was first published on CNBC TV18.

Summary

Global capabilities center (GCCs) have started updating their policies to enable the remote worker. Over 80% of the GCCs had already embarked on a Digital transformation journey, with technology interventions including robotics, AI and ML to enhance the effectiveness and efficiency of the workforce. Over 70% of the GCCs are looking at technology driven performance measurement tools in the virtual workplace. People wellbeing and culture alignment are the key focus of HR leadership, to pave the way to an engaged and motivated workforce, functioning as a cohesive team.

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.

Related topics Consulting COVID-19