Indian Global Capability Centers Transform, Thriving Amid IT Slowdown

By Consultants Review Team Tuesday, 23 January 2024

India's global capability centers (GCCs) are flourishing despite a slowdown in the IT sector, shifting from providing 24x7 backend operational support to becoming pivotal players in global operations, spearheading innovative initiatives for their parent companies. With more than 1,580 captive centers in India employing 1.6 million people, the Indian GCC industry, valued at over $40 billion, is taking on in-house technology and innovation tasks that would traditionally have been outsourced to third-party IT services giants like TCS, Infosys, and Wipro.

AstraZeneca's Global Innovation and Technology Centre in Chennai exemplify this trend. The center has developed a virtual reality (VR) training module that immerses users into a digital replica of the company's drug production facility in Sweden. This innovative software, which allows employees to simulate drug production processes without the need for physical resources, results in significant cost savings and a reduction in waste. Siva Padmanabhan, MD & Head of Global Innovation and Technology Centre at AstraZeneca, compares it to pilot training on simulators.

The Bengaluru Global Capability Centre of Rakuten Group, a Japanese conglomerate, played a pivotal role in the creation of Rakuten Pay, the Japanese equivalent of Google Pay. The center oversees the entire product, managing UX, back-end processes, and strategy. From incorporating new features into the app to handling the surge of users on their e-commerce platforms, Rakuten India's CEO, Sunil Gopinath, emphasizes that all operations are efficiently managed from their Bengaluru center.

Lowe's, a US-based home improvement retailer, credits its GCC in Bengaluru for the success of its self-checkout counters. The center developed a cost-effective in-house system, leading to a significant increase in transaction numbers. Ankur Mittal, Senior Vice President-Technology & MD of Lowe’s India, notes that this system, now deployed across 1,700 stores in the US, has positively impacted Lowe's top and bottom lines.

The trend of MNCs establishing captive centers in India has seen a surge post-COVID-19, with an estimated net addition of 365,000 jobs in 2023, as reported by talent solution firm NLB Services. Despite a slowdown in the hiring activities of India's IT services sector, these captive units are thriving by undertaking critical technology and innovation tasks internally, emphasizing the growing preference for in-house capabilities over outsourcing to third-party IT services.

Current Issue