Adoption of Innovation in Global Capability Centres (GCCs)

Post-Pandemic Digital Era

The world has embraced digitalization like never before. While Industry 4.0 was already progressing before the onset of the COVID-19 pandemic, the lockdowns and work-from-home mandates have significantly accelerated this transformation. Customers now prefer to engage with enterprises through digital channels, making Artificial Intelligence (AI), automation, and machine learning (ML) integral to business operations. In this digital-first landscape, enterprises are compelled to accelerate their technology adoption. However, they face numerous challenges, including disruption of existing models and the need for speed in an increasingly dynamic business environment. Global Capability Centres (GCCs) have emerged as crucial enablers in overcoming these challenges and advancing tech adoption within enterprises.

Catalysing Digital Transformation

GCCs empower parent companies to re-engineer their operational models and embrace the latest digital technologies, such as virtual-connect and collaboration platforms, cognitive automation, AI, IoT, predictive analytics, and blockchain. In a post-pandemic hybrid work culture, GCCs offer scalable digital systems designed for distributed workforces, enhancing enterprise agility, resilience, and flexibility. Over the past few years, numerous global MNCs have established GCC centres in India to drive digital transformation and innovation. For example, 7-Eleven’s global tech centre in Bengaluru and 3M’s technology centre in Bengaluru focus on accelerating digital transformation at scale.

AI models are inherently disruptive and fraught with risks, often failing when applied in real-world settings due to their complexities. GCCs assist enterprises in navigating these challenges by providing viable incubation centres to test and refine AI models before full-scale implementation. Data scientists at GCCs create, develop, and train algorithms that enhance product delivery cycles, improve process efficiency, analyse financial performance, and identify key market and consumer trends. For instance, Sabre’s GCC in Bengaluru develops advanced algorithms for statistical and econometric analysis, big data analytics, and other sophisticated processes to address challenging business problems.

The rapid advancement of technology and the fragmentation of digital platforms have made enterprise ecosystems increasingly collaborative. Successful enterprises curate a network of skills and talent, with GCCs playing a pivotal role. For example, Ikea’s GCC centre in Bengaluru is part of a global network of remote centres focused on digital innovation. GCC service providers leverage robust IT infrastructure and high technical competencies to deliver top-notch services, engage with academia, participate in trade forums, and collaborate with start-ups offering niche services.

Collaborations between GCCs and startups in emerging technologies are highly beneficial. GCCs benefit from startups’ expertise, accelerated innovation, increased customer focus, competitive edge, and new revenue streams. To foster these collaborations, GCCs implement various models such as innovation labs, startup incubators, hackathons, and funding initiatives.

In the automation sector, a significant player has partnered with startups, leading to product development, access to new markets, and technological advancements. In the IT sector, a prominent networking hardware company has collaborated with startups specializing in IoT, AR, VR, and Blockchain technologies. This partnership has enriched the GCC’s application portfolio.

GCCs leverage academic research, theories, and intellectual capital, while academic institutions gain research funding, endowments, and increased recognition for their achievements. Often, academic institutions promote the study of emerging technologies such as AI and ML. For example, an IT and outsourcing company has partnered with a leading Indian engineering institution in data science and AI, establishing a faculty fellowship position. This partnership grants the company access to cutting-edge expertise in these technologies.

The evolution of GCCs into innovation hubs, housing experts in emerging technologies and collaborating with startups and academia, marks a significant shift from their initial functions. It is not only prudent to capitalize on low wages, a highly educated and skilled workforce, and a thriving startup ecosystem but also essential. Failing to innovate and expand into external ecosystems would squander a GCC’s potential, leading to missed opportunities and a competitive disadvantage against more ambitious, creative, and innovative rivals.

The global GCC market, valued at approximately US$ 40 billion, constitutes 25% of the global offshore services market. About 27% of US-based Global 2000 firms have established a GCC in India, with over 1,300 GCCs employing more than 1.3 million people and generating USD 33.8 billion in gross revenue. For enterprises to remain competitive in the post-pandemic decade, reliance on GCCs is crucial. MNCs are transforming their GCCs into innovation hubs, expanding existing facilities, and creating new Centres of Excellence (CoEs). These developments collectively indicate that GCCs are not merely recovering from the pandemic but are leveraging it as an opportunity to reinvent themselves, becoming more resilient, innovative, and strategically vital to their parent organizations. The future of GCCs looks promising, with a continued focus on driving value through innovation and digital transformation.