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EY Survey: 86% GCCs cite service expansion as their top business priority

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Global Capability Centres (GCCs) in India are expanding their services with a focus on transformation, innovation, and knowledge-based capabilities, as per EY India’s GCC Pulse Survey 2023. The survey states that 86% GCCs are looking at service expansion as their top business priority over the next 12 months, followed by driving enterprise-wide digital transformation (69%). The report analyses the evolving operating model of GCCs, focusing on four critical pillars of strategy, digital, talent, and security.

Highlighting insights from 87 GCCs across diverse geographical locations and industry sectors, the EY report emphasizes that GCCs are actively driving product development, design thinking, and technological innovations.

Commenting at the launch of the report, Arindam Sen, Partner and GCC Sector Leader – Technology, Media & Telecommunications, EY India, said, “Today, GCCs are moving from ‘back office’ organizations to a more integrated, ‘one-office’ structure. With value-added services taking the center stage, GCCs are moving towards becoming Global Value Organizations (GVOs). To remain competitive on a global scale, GCCs must continue their service expansion journey and invest in operational efficiencies through the use of digital skills and technologies.”

Key report findings:
Focus on knowledge-based capabilities and innovation
According to the survey, GCCs are expanding their offerings beyond the usual IT, finance, HR, and supply chain services to include marketing, legal, ESG, advanced analytics, and data science, led by technology. Compared to the EY GCC Pulse 2021 survey, there is a notable increase of 36% (from 50% last year to 86% now) in GCCs enhancing capabilities and functional scope.

There has also been a significant rise in the number of GCCs supporting sustainability initiatives. In 2021, only 17% GCCs were actively supporting global sustainability / integrated reporting, which has increased to 47% in 2023. About 74% survey respondents are looking to introduce an idea sharing platform to foster innovation. Moreover, there has also been a 30% increase (from 47% in 2021 to 77% in 2023) in focus towards building an innovation culture in an organization.

Adoption of digital technologies
The survey stated that 55% participants have established a mature data and analytics practice as part of their digital strategy. This is closely followed by cyber security and robotic process automation, which support GCC’s digital transformation journeys. The adoption of metaverse and blockchain technology has been slow compared to other technologies.

By leveraging digital technologies, 81% participants offer the scalability required to execute large-scale digital initiatives, and 79% respondents are acting as a global hub for digital skills and delivery, which is the backbone for digital transformation journey. 56% GCCs are developing customer facing products, in comparison to the 28% in 2021 survey.

Prioritizing employee value proposition, well-being, and inclusivity
GCCs are actively rethinking their employee value proposition (EVP) and placing people’s well-being and inclusivity at the center. 77% of the GCCs surveyed believe that a majority of their workforce will continue to work in a flexible manner (hybrid) for the next 12 months, while 75% believe that less than 25% of their workforce will work remotely.

The participants have seen an average attrition rate of 12.5% with almost 60% of the GCCs having an attrition rate between 5% and 15%. About three-fourth of survey respondents believed that their business is still at high to medium risk from high attrition brought on by the war for talent.

80% respondents stated that improving diversity and inclusion (D&I) integration is a key focal point for their center. There is also a remarkable surge of 70% in planned D&I integration drives, compared to the previous findings in the 2021 survey.

Risk to confidential information and increased data breaches are key watchouts
According to the survey, 66% feel that leakage of confidential information due to increased cyber-attacks is a major risk to their business. The survey also reveals that 92% GCCs have a robust cybersecurity policy and a protected network, however they still feel that increased risk of data breaches stemming from hybrid working arrangements remains a cause for concern.

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