The Transformation and Evolution of Global In-house Centers
Global in house center transformation (GICs) were operated primarily to offer offshore technology support. However, that model is today witnessing a transformation as GICs are beginning to take advantage of the domestic market for revenue and sales opportunities. GICs are now expected to deliver technology support as well as produce revenue by winning IT deals. From a genuine cost arbitrage model, GICs in India has developed into a value-based model to become tactical centers that generate over $23 billion in revenue.
Having demonstrated that the model can produce lasting value and growth over time, GICs have the ability to develop collaborations founded on mutual organizational objectives and a degree of innovation that distinctively benefits the parent firm. Many businesses have built capabilities and moved up the value chain to establish global Centres of Excellence (CoE).
Led by large scale digital trends, big firms initially considered developing nations such as India, Thailand, China, Mexico, Brazil, and Philippines in the 1990s to subcontract their functions with cost savings and organic global growth in mind. Soon after, these firms recognized the need for control over quality, so they shifted to offshoring from subcontracting and started GICs. These firms established in-house centres in developing nations to carry out select tasks for the parent firm with a direct hold over productivity, efficiency, and work quality. GICs allowed firms to benefit from cost savings along with high-quality service and improved productivity.
Evolution of GICs in India
GICs have been instrumental in their power to adapt and transform their functionality while discovering new and ground-breaking ways to successfully back their parent firms.
Due to this, the GIC landscape has grown on a large globally. In India, GICs have certainly transformed in the last two decades. India is presently home to over 1200 GICs engaging close to 1 million individuals. These GICs produced revenues of close to $28.3 billion in the last financial year. With rising digitization and the enhanced role that technology today plays, GICs are on their way to make an even greater impression in the coming years.
From the onset, GICs were proposed as a way to enhance cost savings. However, with the growth of the disruptive tech ecosystem, assessments of the manner in which GICs typically work are beginning to change. Firms are getting aware of the fluctuating tide and appreciate the need to modernize for sustainable growth on the global front.
Large firms are singling out India as the flashpoint for excellent work being delivered efficiently. GICs are burgeoning in India with each year the number steadily increasing. With more GICs being launched in India, the path of growth toward financial independence and employment is widening. GICs in India are on a hiring spree as they gradually spread their functions across the verticals and build countless opportunities.
How Digital Disruption is Testing the Strength of Businesses
The tech industry is constantly changing, and this perpetual flux influences the global market as ground-breaking new technologies impinge on the value of current services and products. Businesses are starting to experience the ramifications of digital disruption. Evolving technologies such as big data analytics, ML, blockchain, and automation coupled with different business models are reimagining the way companies operate.
Since GICs work in an ecosystem where tech-driven transformation is speeding up, it is important for GICs in India to adjust to this change. With the arrival of technologies such as AI, NLP, and cognitive automation several jobs are likely to get automated in the near future. This could cause wide-ranging problems to the way GICs operate. RPA, AI, and NLP empower machines to carry out certain functions more effectively than humans. For example, tasks such as document reviews and CRM requests can be done more quickly and efficiently by machines.
Innovative technologies are influencing functions such as finance, HR, procurement, and IT for which GICs are normally offering support for decades. Businesses must embrace the disruption and discover new opportunities that could put them on a recovery path before they turn redundant.
