What’s Next
Drilling into the data, we looked specifically at the GCCs set up in the last two years. Nearly half of these GCC leaders plan on expanding staff in the next 24 months. What’s interesting is that a similar number also plan to scale back or even exit their GCC during the same time frame. This is consistent with what we wrote about the different
challenges and plans for GCCs depending on when they were established.
GCCs have emerged as a very viable operating model for organizations, and a majority of GCCs are set up in India (much like the delivery capabilities of most outsourcing providers) due to the scale of talent, the availability of specialized skills and the cost advantages. What is clear from our research and discussions with enterprises is that the alignment of a GCC with the company’s objectives is critical. When it’s not aligned, plans start to change. And sometimes that change takes the shape of a full exit.
We expect GCC activity to remain high as more enterprises evaluate the potential merits of this operating model, in addition to – or as an alternative to – outsourcing. Meanwhile, we also expect to see strong market activity from service providers (including those who have a relationship with the parent organizations) who are interested in buying GCCs that are not meeting enterprise objectives.
I hope to see you at the NASSCOM GCC Conclave in a couple of weeks where we can discuss this more.