Global In-house Centers: Fuelling Growth, Innovation and Differentiation

With increasing digitization and mounting customer expectations, fostering an innovation-driven culture has never been more important to businesses. Today, enterprises are expected to implement new digital initiatives, proactively use analytics, and provide custom services and solutions at the speed of ideas. How can businesses fulfil this tall order while creating sustainable value and enhancing customer experience?

01-Apr-2018

EnterGlobal in-house centres (GICs) or captive centres. Global players across industries are making astute investments to build strategically strong and well-positioned GICs in regions best known for their talent availability and high growth rates.  In India alone, there are more than 1,100 GICs,generating approximately $23 billion in revenues. 

  • Here are three ways companies can leverage GICs to transform and expand their business in today’s fast-paced digital environment:

  • Drive value and market expansion: According to Nasscom strategic review 2017, GICs are growing at the rate of 8.2% in India. Chartered Bank, for instance, plans to increase the headcount at its Bangalore center from 3,300 to 6000. The reason:GICs are no longer seen as support units or cost saving mechanisms but rather as value plays that create competitive differentiation or innovation hubs that drive market expansion. Companies are increasingly leveraging GICs to improve quality of products and services through process standardization and optimization, and managing end-to-end delivery of global products through improved coordination with parent company. For companies looking to improve business outcomes and capture new market opportunities, GICs also offer the capability of conceptualizing, designing and delivering new products by managing strategic local partnerships.

  • Foster continuous innovation for competitive differentiation: The current business environment is complex, agile, and influenced by rapid digital transformation. To stay abreast with the explosive pace of change, businesses can transition their GICs into centres of excellence that deliver innovation and strategic value.A team of experts positioned in the GIC can lead open innovation initiatives, devote more projects to R&D, and leverage platformsto source innovation ideas,boosting growth and competitive advantage. A large multi-national oil and gas company set up a GIC in India to create cost advantage. But the company stayed on to take advantage of the huge skilled talent pool in the country, and subsequently, transformed the GIC into an open technology hub for driving R&D initiatives and furthering research in clean energy solution.
  • One way to turn a GIC into a deep knowledge house is to establish campus training and recruitment programs that hire and nurture domain experts.Take the case of Bosch India’s innovative GIC that has a clear ideation to development process, where the ideas are meticulously identified, incubated and funded.  GICs also offer the capability to develop custom solutions to drive digital transformation, enhance service delivery, and create holistic and sustainable differentiation. Companies such as Amazon, Walmart and Expedia are already leveraging GICs to deliver on their digital promise.

  • Hire skilled and culturally aligned talent to deliver on strategic objectives: With the unemployment rate in the US currently standing at 4.1%, the ability of businesses to attract and retain global talent is clearly the new competitive advantage in today’s tight labor markets. In response, GICs are evolving into talent hubs, enabling companies to access rich local talent pools and deliver on strategic goals.  A joint study conducted by Bain & Company and Nasscom found that GICs in India employ 8,15,000 highly skilled people. However, in order to nurture and retain such talent, it is imperative that HR takes a customer-oriented approach to deliver consistently high quality services to employees. This would mean capturing employee information, developing a talent management strategy, and focusing on personalization.

With increasing data proliferation and emergence of new technologies that enable faster cycle time, adopting agile ways of working and using the DevOps paradigm to increase collaboration is imperative for GIC success. Building GICs of future not only means placing digital IT at the heart of organizations, but also investing in high quality leadership and disruptive technologies such as AI and automation.  The appeal of GICs lies in the high level of control and security they afford parent companies while ensuring end customer proximity and innovation – an unbeatable mix of benefits that spells success.