A new study commissioned by CaptiveAide, and conducted by Feedback Insights reveals that while India remains a prime destination for Global Capability Centers (GCCs), companies face significant challenges in fully leveraging the country's vast talent pool.
The study, titled "Back to the Future: What You Didn't Know About Setting Up a Successful GIC in India – Today," surveyed 255 decision-makers from US and UK companies, shedding light on the key factors driving GCC growth in India and the hurdles they face.
Although a significant 52 per cent of GCCs surveyed prioritise access to a deep talent pool as a key decision to choose India as a destination, this diverse talent pool is not just about quantity; it's about quality. Organisations still face several challenges in fully leveraging these advantages. Key hurdles include cultural and communication differences, regulatory compliance complexities, infrastructure limitations, and talent retention issues.
Yet, India still boasts a vast reservoir of skilled professionals across a spectrum of domains, from technology and engineering to finance and customer service. The study also found that companies of all sizes, from those with revenues under $500 million to those exceeding $5 billion, consistently rate access to talent as a top priority.
Navigating Challenges for Sustainable Growth
While the opportunities in India's GCC landscape are significant, the study identified several challenges organisations must address. These include:
Culture and Communication: 84 per cent of respondents cited this as their top challenge, despite India's perceived cultural compatibility. The study emphasises the need for cross-cultural training and fostering an inclusive work environment.
Compliance: 55 per cent of respondents identified regulatory compliance as a major hurdle. The report stresses the importance of robust compliance frameworks and proactive engagement with local authorities.
Infrastructure: 45 per cent of GCCs grappled with infrastructure-related challenges, particularly in Tier-II and Tier-III cities.
Administration and Facilities Management: 42 per cent of companies faced difficulties with administrative processes and logistical bottlenecks.
Cybersecurity and Data Privacy: 38 per cent of organisations highlighted this as a major concern.
Talent Acquisition and Retention: Despite India's vast talent pool, 35 per cent of respondents cited this as a significant challenge.
Solutions and Best Practices
The study offers key recommendations for GCCs to overcome these hurdles:
- Implement robust compliance measures and engage proactively with local authorities
- Leverage local partnerships more effectively to navigate the business ecosystem
- Focus on data classification and privacy to ensure regulatory compliance
- Invest in developing strong local leadership with cultural fluency and industry expertise
- Improve talent mapping to align organisational capabilities with strategic objectives
India's Talent Magnet: Attracting Global Companies
The study, however, reaffirms India's position as a global hub for GCCs, driven by a compelling business case that offers multiple advantages:
- Cost Efficiency: 57 per cent of respondents cited significant cost savings as a primary driver for establishing GCCs in India.
- Talent Pool: 52 per cent prioritise access to India's deep talent pool, spanning areas such as management, technology, engineering, product development, sales, and marketing.
- Intellectual Property (IP) Protection: 42 per cent of the respondents agree India's robust legal framework ensures the security of organisational assets.
The Evolving Role of GCCs
The study's findings underscore the evolving role of GCCs in India. They are no longer mere cost-saving measures but strategic assets that can drive innovation and growth for the entire organisation. As companies increasingly embrace digital transformation, GCCs in India are well-positioned to play a pivotal role in developing new products and services, optimizing business processes, and delivering exceptional customer experiences.
"Our India strategy allows us greater speed, control on Product User Experience and greater cultural cohesion with our global teams," stated the President of a Billion Dollar Financial Services firm participating in the study, highlighting the diverse benefits that India offers companies of varying scales.
"India's GCCs are at a pivotal moment," said Ganesh Jayaraman, Business Head - Advisory Services at Feedback Insights. "Our research reveals a dynamic landscape where GCCs are poised to become global centers of excellence, driving innovation and strategic growth for their parent companies. This can be enabled by empowering local leadership with cultural intelligence and decision-making autonomy and an environment for fostering exceptional talent."
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