Latest trends driving transformation in the GCC Sector

By Keerthi Kumar, Deloitte India Consulting partner

Understanding the foreground
India is home to a sweeping 50% share of global GCCs. It has been a witness to the paradigm shift in the evolution of GCCs, from back-end centers to global multi-functional and strategic capability partners. The Covid-19 pandemic compelled GCC leaders worldwide to embrace radical ways of working, which has led to rapid advancements in the post-pandemic 2022 GCC landscape. Deloitte’s Global Engineering R&D pulse survey 2022 stated over 85% satisfaction levels among demand markets on the performance of their India ERD GCCs primarily owing to the way in which GCCs in India handled the pandemic situation.

With back-to-work and hybrid set-ups normalizing, as per Deloitte’s 2021 Global In Shared Services and outsourcing survey, GCCs are going through some revolutionary transformations, orbiting around the three key focus areas – the work, the workforce, and the workplace.

GCCs are now transforming the way of working, and putting the amplified focus on automation, developing specialized digital capabilities (such as analytics, cloud, AI/ML), innovation, and espousing integrated and flexible talent practices. Automation and Digital Transformation RPA, automation, reporting, and process excellence are now priority areas of at least 52% of GCCs, leading to large-scale transformation initiatives across the organization. The customer’s need for digital-first solutions is resulting in redesigned and end-to-end integrated processes. We have seen an exponential adoption of RPA solutions, with 69% of GCCs using RPA to streamline processes across domains like enabling data transfers, payroll processing, financial analysis, audit and reconciliation, employee onboarding, and help desk, amongst others. However, the digital agenda has moved beyond RPA. ~50% of GCC firms are also prioritizing areas like single-instance ERP, cloud systems,
agile enablement, self-service platforms, virtual support, case management, and workflow tools.

Given that gradually more end-to-end processes are housed in GCCs, there is also increased traction in reporting analytics through predictive and cognitive AI/ML/NLP capabilities, to gain a better 360-degree business view, and deliver real-time insights for both internal and external stakeholders. Our survey shows that 67% of companies say that the primary focus of their GCC in the next 3 years will be on building new capabilities or centers of Excellence around data & analytics, cloud, process re-imagination, emerging technologies, etc.

Talent Integration
As per the 2021 GCC Value Proposition for India Nasscom Deloitte report, GCCs directly employ 1.2 -1.3 million people, contributing as a 4X multiplier to create 5.2- 5.5 million jobs. Thus, GCCs have a significant impact on shaping human capital for the future. This has mandated GCCs to prioritize the development of strong culture, well-being, and flexible and hybrid work practices, in conjunction with financial incentives for its workforce.

GCCs have groomed 50-60k future leaders through training and exposure, over the past five years, and have trained ~200k employees in futuristic digital skills. Thus, generating an adept workforce, for better global integration. The rapidly increasing focus on employee well-being has also led to flexible and hybrid work environment, and remote work policies. With the pandemic changing the working model, hiring has become location agnostic to get the benefits of increased productivity and reduced costs.

Innovation and Rapidly evolving Ecosystems
Our survey indicates that 43% GCCs find process and technical complexity, and siloed automation as their biggest challenges. To combat these and other challenges, GCCs have employed more than 300 start-ups in India, helping them generate ~USD 15 million in revenue annually.

As per the 2021 GCC Value Proposition for India Nasscom Deloitte report, Global organisations with GCC in India invested ~USD 1.5billion in Indian start-ups in the year 2019 alone, and more than 500,000 students gained AI and IOT skills through academia partnerships. Deployment of emerging technologies and use cases has enabled cross-sector development. It has provided better outreach, and integration of deeper insights into stratified customer needs. It has also created an ecosystem of talent, start-ups, and corporates, that has led to a mutually beneficial partnership, and is driving a culture of innovation.

Traditionally, GCCs played the role of a ‘doer’ with close monitoring from the parent organisation, primarily handling support functions. Over time, GCCs have been able to build domain knowledge, and more importantly the business context. Thus positioning themselves as a transformation partner for the enterprise, actively involved in capability development and R&D. The GCC value proposition for India 2021 report shows that ~50% of GCCs already acting as the ‘thinkers’, ‘influencers’, and ‘process owners’ in their organizational hierarchy, breaking the barriers of traditional service delivery model. Hence, it is evident now, that in their evolutionary journey, GCC is truly becoming a miniaturized version of its parent organization, and in the future may even arise as ‘sponsors’.

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