Our Take

India’s global capability centre
market: Six imperatives toscale up further
October 2023

With India fast becoming a powerhouse of global
capability centres (GCCs), Rajesh Ojha
and Vivek Prasad examine the growing footprint of thesecentres and recommend ways in which they can innovate, build
trust, transform business and align with the requirements of therecently released Digital Personal Data Protection Act, 2023.
An investment services group wanted to set up an in-house capability centre. The group needed apartner with strong knowledge of the GCC landscape in India and the capability to deliver a range ofsolutions around location assessment, facility and real estate, recruitment, HR policy and compensation,and payroll.
Our team worked with industry partners in real estate and recruitment to set up the GCC, benchmarked
compensation for the client in accordance with industry standards, and offered recruitment support andpayroll management services.
Outcome: The client was able to find a one-stop solution for an end-to-end GCC setup that capitalised
on local market knowledge.
In the last couple of years, more than 150 multinationals have set up their GCCs in India.1 Today, India is at
the heart of the GCC growth momentum, but its offshoring story dates back to 1985 when Texas Instruments
set up its office in Bengaluru.2 In the 1990s, other companies followed suit with many airlines and technology
companies starting their operations in India. Originally called ‘captives centres’, they have, over the years,
come to be addressed as GICs (global in-house centres) or GCCs (global capability centres). In 2012, there
were about 760 GICs operating out of India. In 2016, that number went over 1,000. Today, India houses over
1,600 GCCs. By 2025, the country is poised to have 1,900 such centres with the market size touching USD 60
billion.3
While these GCCs have been performing a variety of functions for their parent organisations and have grownsignificantly in number, headcount and stature, the needle has moved considerably over the past three decades
or so. Consistent performance and a commitment to shared goals have helped GCCs build trust with all theirstakeholders, including their parent companies, for long-term success and growth. As a result, silos have beenbroken, global roles are being anchored from the India offices and business has been flowing seamlessly acrossborders.
Today, GCCs operating across all service lines – IT services, BPO, engineering services and software productdevelopment – have gone up the value chain by delivering complex work requiring significant understandingof business context and imperatives. They have made a mark in key industry verticals such as banking andfinancial services, software, telecom and semiconductor with growing concentration in aerospace, automotive,
oil and gas, healthcare and pharma.

1 June 2023. Nasscom & Zinnov. India-redefining-globalization-blueprint
2 Press release
3 June 2023. Nasscom & Zinnov. India-redefining-globalization-blueprint
2 PwC | Our Take

GCCs in India: The journey in numbers

1,600+
is the total number of GCCs
in India, 65% of which areheadquartered in the US.

Of the USD 46
billion
GCC market size in FY 2023,
ER&D alone has a market sizeof USD 25.6 billion.

Of the 1.66
million+talent employed by GCCs,
Bengaluru accounts for 42% of
the total ER&D talent.

Of the 11.4%
CAGR of GCC market size,
42% of the GCCs were in the
product hub state in FY22.

960+

42%

GCCs work with a functional
shared services model. IT, HR
and F&A are key functions
driving workloads.

of the total talent added in thelast two years was in ER&D
which has been growing at a
CAGR of 10.7%.

Source: Nasscom & Zinnov. India-redefining-globalization-blueprint, PwC analysis

2023–2028
Projected*

Total no of GCCs: 2,100+
Revenue: USD 90 billion+
Total installed GCC talent: 3,400K+
Total number of GCC units: 3,200+

2015–2023

Total number of GCCs: 1,600+
Revenue: USD 46.0 billion
Total installed GCC talent: 1,659K+
Total number of GCC units: 2,740+

2011–2015

Total number of GCCs: 1,000+
Revenue: USD 19.4 billion
Total installed GCC talent: 745K+
Total number of GCC units: 1,448+

Till 2010

Total number of GCCs: 700+
Revenue: USD 11.5 billion
Total installed GCC talent: 400K+
Total number of GCC units: 1,000+

Source: Nasscom & Zinnov. India-redefining-globalization-blueprint,
PwC analysis
3 PwC | Our Take

Sanjeev Krishan
Chairperson
PwC India
India has shown tremendous growthin the GCC space over the last few
years, moving from cost arbitrage todriving technological advancements
and leveraging emerging digital
capabilities and there is even morepotential to be explored. With ourrich ecosystem of people andtechnology, India has emerged asa transformation hub presenting
immense opportunities for global
investors. As an organisation, weare committed to creating value
and positioning India at the heartof growth and innovation. It is ourconstant endeavour to pilot change,
channel the best practices throughthe Indian GCC ecosystem andprovide the best solutions to drive
exponential growth for our global
clientele.

The good news is that the growth of the global sourcing sector has ensured the metamorphosis of GCCs
into centres of excellence (CoEs), profit centres, programme management offices and an innovation hotbed
for emerging markets. New GCCs are being set up to add latest capabilities to their global portfolio (beyond
cost and scale) which, in turn, is enabling local market expansion for the parent firm and is helping them inmanaging strategic local partnerships. What’s more, some of the disruptive changes such as digital, big data,
analytics, mobility and cloud computing enable them to enhance value by creating a unique proposition for theparent firm.
This article examines the current state of the GCC industry in India, the country’s burgeoning potential andoffers recommendations for companies that consider GCCs as a strategic lever for their business and operating
model.

Current trends in the GCC landscape

GCCs are focused on value creation in the post-pandemic world
The COVID-19 pandemic, coupled with inflation and geopolitical tensions, provided a significant flip to the GCC
industry in India. After the pandemic, the share of services exports in India’s GDP rose sharply, with the highest
growth witnessed in business services exports between FY20 and FY23.4 This increase in business services
exports can be attributed to the sudden proliferation of GCCs in India.5 The Russia-Ukraine conflict and global
inflation exerted pressure on wages, encouraging global players to look towards India to set up their back office
operations to balance their cost model.6
Fast forward to 2023, GCCs are no longer viewed as mere back-office support for multinationals; instead
they are key to building global solutions and generating additional revenue streams. The following instances
highlight how GCCs are driving value for parent organisations:• An insurance company has repositioned its India GCC to drive new digital capabilities. PwC India is
assisting the GCC with its digital transformation journey by helping it implement automation and data
governance best practices, and developing new capabilities in artificial intelligence and machine learning.
• Another insurance company has set up a GCC technology hub in India that will develop digital solutions in
the insurance domain to cater to the countries that it operates in.

Partnerships with start-ups to support global technology needs
GCCs are leveraging India’s strong engineering research and development (ER&D) service provider community,
its mature start-ups, and peer-GCC ecosystem.7 They have established more than 15 incubators, over 40
accelerators, and multiple partner programmes to drive collaboration with Indian start-ups.8 Healthcare andpharma GCCs have seen an increased partnership with start-ups and academia to access newer technology.
The GCCs have explored various forms of collaboration such as innovation labs, hackathons and start-up
incubators.
In 2020, a healthcare GCC launched a digital innovation hub in the southern part of India to engage with startups and innovators who are passionate about healthcare. Another of its innovation hubs engages with start-ups
to provide solutions in automation and talent intelligence.
PwC India has also enabled GCCs to collaborate with start-ups on emerging technologies. The team helped afinancial services group to set up an accelerator-cum-co-creation platform to engage in partnerships withstart-ups.
4. Department of Economic Affairs
5. Ibid.
6. Ibid.
7. Nasscom report
8. Ibid.
4 PwC | Our Take

GCCs are tapping the talent pool in Tier-2 cities
India has significantly enhanced its infrastructural and technological capabilities, besides creating a superiortalent pool which can leverage these capabilities. In fact, the rise of GCCs in India is a testament to thecountry’s vast technology talent pool and the enabling environment for digital innovation.
With about 1.5 million engineering students graduating annually,9 the country has positioned itself as a global
magnet for tech talent and a prime destination for foreign companies that are willing to set up shared services
centres. At 21.1%, the demand and supply gap in India’s tech talent is the lowest among the top tech countries,
including the US, China and the UK10 and GCCs are taking note. Out of over 1,600 GCCs in the country, nearly
78% have established operations in India to augment or create a superior talent pool.11

Sanjay Tolia
Chartered Accountant
PwC India
Tax is like a coin with two sides; onthe one hand, it is a mandatory social
contribution and on the other, it is a costlike any other cost. Businesses therefore
have to balance paying their fair shareof taxes while optimising their tax cost.
GCCs can play a large role in helping
businesses balance both the aspects.
Centralising global tax compliance in a
GCC enables the parent organisation
to manage it in a consistent and timely
manner, including usage of data analytics
for business insights aligning with thetax strategy of the group. Moreover,centralising the same in a GCC bringsin cost efficiency using the right mix oflocation and emerging technologies thatare embedded within and around the ERP
system. Partnering with a trusted advisor
from the start could help in proactively
planning and aligning tax strategies witha GCC’s business objectives and global
policies.

9

Bloomberg

10. Nasscom. February 2022. India’s tech industry talent: Demand-supply analysis
11. Indian GCCs to create 3.64 lakh jobs
5 PwC | Our Take

GCC proliferation across India
Emerging locations
6%

3%

NCR
14%

14%

Vadodara
Ahmedabad

Kolkata

Pune
13%

10%
Hyderabad

Mumbai

11% Goa 14%

11% Goa 10%
Bengaluru

Chennai

35% Goa 38%

Coimbatore

10% Goa 11%% distribution of talentacross cities% distribution of officespaces across cities

Trivandrum
Primary locations

Emerging locations>1,600 global capability centres

Talent pool of
1.66 million

11.4% growth in GCC
market (FY15-23)>100 CoEs within
GICs

Major sectors attracting GCCs
Retail and consumer

Diversified – industrial

Semiconductor

Automotive

Healthcare

Oil and Gas

Source: NASSCOM and PwC analysis based on inputs from IT park developers and the IT/ITeS industry

The country is also among the top three in the world when it comes to producing the highest number of science,technology, engineering and math (STEM) graduates every year.12 Its ER&D sector has evolved from providing
only engineering support to end-to-end ownership of product development initiatives. According to NASSCOM,
at 56%, ER&D holds a major share in India’s GCC revenue pie with widespread digitisation and cloud adoption
as its key growth drivers.13

12. GICS In INDIA – The dream destination for centers of excellence
13. June 2023. Nasscom & Zinnov. India-redefining-globalization-blueprint
6 PwC | Our Take

This comes even as 8% of GCCs are expected to double their workforce in 2023, creating approximately
364,000 new jobs.14 These jobs are unlikely to be confined to metro cities as GCCs are increasingly focussing
on Tier-2 cities where government initiatives have resulted in improved infrastructure, real estate costs arelower, and skilled talent is available. While 92% of GCCs are in Tier-1 cities, the preferred Tier-2 destinations
for GCCs include Ahmedabad, Kolkata, Vadodara and Coimbatore.15 Other cities like Jaipur, Nagpur, Kanpur,
Visakhapatnam, Chandigarh, Guwahati, Indore and Lucknow are also drawing the attention of GCCs.
Bengaluru, Hyderabad and Chennai are the top choices for GCCs, owing to the availability of a talented
workforce and the presence of a conducive ecosystem. At least 35% of GCCs have some presence inBengaluru while 14% are based in Delhi/NCR, 13% in Pune, 11% in Mumbai, 11% in Hyderabad and 10% in
Chennai.16

Rajesh Ojha
Partner and Leader - GCC Markets
PwC India
The boundaries between GCCs and their headquarters are being redefined rapidly, with GCCs
taking on a central role in driving innovative business capabilities that enhance the value of thecompany’s products and services. At present, GCCs in India account for more than 1% of thecountry’s GDP and the share is expected to grow further. It’s also enhancing the digital literacy
initiative and prompting states to adopt GCC business-friendly policies. GCCs are reinventing
themselves to become profit centres through proprietary products and services, and there is a
growing emphasis on transitioning towards result-oriented organisational structures within GCCs.
These GCCs are pioneers not only in India’s tech ecosystem, but they are also venturing into tax,
legal, marketing and procurement, and other core function areas while extending their operation in
Tier-2 and Tier-3 cities, further fostering India’s economic growth.

14. Ibid.
15. June 2023. Nasscom & Zinnov. India-redefining-globalization-blueprint
16. Nasscom and PwC analysis
7 PwC | Our Take

Favourable policies by state governments for GCCs
Various Indian states are undertaking a multi-pronged approach to boost the GCC ecosystem by identifying
high potential industries. These policy interventions are addressing the need for fostering high-end talent andboosting a research-oriented ecosystem. The policies aim to leverage the presence of the prevailing industrial
ecosystem and IT/information technology enabled services (ITeS) industry, as organisations are investing inopen innovation platforms and setting up digital enterprises to support their digital transformation journey.

States in India are adopting a multi-pronged approach to attract GCCs through sectoral policy
interventions, fostering high-end talent and boosting a research-oriented ecosystem
Sector focus and ICT
policies targeted
towards R&D, talentand infrastructuredevelopments• Fiscal subsidies: Land-related, IT
park, additional FSI provision,
training/employment, CoE CapEx,
industrial power tariff

Source: https://karnatakadigital.in/about-us/

8 PwC | Our Take

Spoke-shore strategy
towards Tier- 2, 3 cities,
foster R&D andtech-ready talentthrough academia andindustry participation• Beyond Bengaluru initiative(Mysuru, Hubballi, Mangalore),incubation parks in automobile
clusters of Nashik, Aurangabad• Emerging locations – Coimbatore,
Vizag, Cochin, Jaipur

CoE engagement withindustry/start-ups,
innovation and productdevelopment for GVC
integration and newrevenue streams• Heavy CapEx on R&D, IT/startup
ecosystem and innovation parks
in proximity to Auto, EV andelectronics clusters• Karnataka digital economy mission(KDEM), T-Hub, Hyderabad, megaelectroprenuer centre (MEC), Chennai

UP IT & ITeS policy 2022–27• Key provisions: Land subsidy, 50% of
CoE setup cost, workforce incentive, IT
park incentive, FSI• UP skill development mission for joint
collaborations with IIT Kanpur, IIT BHU,
IIIT Prayagraj

Telangana ICT policy 2021–26• Key provisions: Land subsidy, IT park
incentive, stamp duty, industrial power
tariff, workforce incentive, IP/patent• ‘TASK’ mission to skill 10,000 in five
years, 75% training fee for courses,
design houses, IIT, IIIT, ISB

Tamil Nadu ICT policy 2018–23• Key provisions: Land subsidy, IT park
incentive, FSI, stamp duty, power
subsidy, IP/patent, OSR provisions for
SEZ

Maharashtra IT & ITeS policy 2023–28• Key provisions: Mixed land use,
rental subsidy, battery recycling,
additional FSI• Skill development incentives for AI,
ML, analytics courses, joint
programmes with IIT Mumbai, NITIE• TNSDC to skill over 100,000 in next
four years, skill and training centres,
joint training programmes andcertification courses
Karnataka IT policy 2020–25• Key provisions: Turnover linked incentive,
second-life of batteries, workforce incentive,
IP/patent• Experienced talent, 85+ chip design houses,
400+ R&D centres, IIM and IIT, 47% of India’s
engineering/ R&D talent
Source: UP policy, Karnataka policy, Tamil Nadu policy, Telangana policy, PwC analysis

State governments of Karnataka, Telangana and Tamil Nadu have launched research and development (R&D)
policies to accelerate the GCC landscape of sectors such as auto and electric vehicles, electronics, pharma
and life sciences in the states. These policies aim to develop innovation hubs in the states by leveraging theexisting industry presence, and the academic and R&D ecosystem. For instance, Telangana contributes toover 30% of India’s pharma production and is home to more than 1,000 life sciences companies and over 200
FDA approved sites for producing both innovator and generic medicines.17 In order to shore-up the productinnovation capabilities with a targeted focus on R&D and drug discovery, the state is promoting the Genome
Valley and MedTech Park – organised clusters for life sciences R&D and clean manufacturing activities, withindustry-relevant infrastructure facilities in the form of knowledge parks, special economic zones (SEZs), multitenanted dry and wet laboratories, and incubation facilities.
The Karnataka Digital Economy Mission (KDEM) aims to increase the state’s contribution to India’s digital
economy to USD 300 billion by 202618 by enabling holistic growth of the tech sectors — IT, ITeS, GCCs,
enterprise performance management (EPM) companies, and start-ups – by deepening partnerships withindustry players and developing tech clusters beyond the state’s capital to achieve higher contribution.
Consequently, leading technology companies have started their operations in Mysuru, Mangaluru and Hubballi
clusters, generating employment for more than 5,000 people. To drive this further, KDEM is enabling digital jobs
across artificial intelligence, analytics and cyber security under the ‘Beyond Bengaluru’ initiative.19
17. https://lifesciences.telangana.gov.in/wp-content/uploads/2020/12/Telangana-Life-Sciences-Vision-2030.pdf
18. https://karnatakadigital.in/about-us/
19. Ibid.
9 PwC | Our Take

Furthermore, there is a paradigm shift in the way governments are envisaging the development of Tier-2 andTier-3 locations as emerging destinations for technology and innovation centres.
In the automobile and EV segments, Maharashtra and Tamil Nadu are investing in the creation of innovation andtechnology parks catering to EV and electronics manufacturing clusters in these states, offering grade A spaces
and land allotments at subsidised prices to choose between development of standalone premises for sharedservices centres, CoEs or R&D hubs, and low upfront cost options such as plug and play, and warm shellproperties. Emerging locations such as Hosur, Nashik, Aurangabad housing leading auto and electronics OEMsare being developed as twin cities to Bengaluru, Chennai or Pune due to the availability of a skilled workforce,cheaper land prices and the presence of diverse MSMEs contributing to innovation and product development
for global value chains (GVC) integration and new revenue streams.
The key provisions offered within these policies include:• enabling infrastructure for innovation clusters and research grants support• incentivising R&D CapEx• tax concessions• enabling creation of IP and licenses• product testing capabilities• collaborative research• ensuring availability of skilled manpower for future high-end manufacturing and research.

Vivek PrasadMarkets Leader,
PwC India
The growth of GCCs in India is atestament to the country’s vast
technology talent pool and theenabling environment it provides
for digital innovation. Today, theengineering R&D sector is making
a significant contribution to India’s
GCC revenue with widespread
digitisation and cloud adoption as its
key growth drivers. PwC India taps
into this talent pool with multiple
skill-sets to help GCCs strengthen
their roots.

10 PwC | Our TakeOur takeSome challenges that GCCs often have to address include:• transforming business while driving cost efficiencies• identifying new business models for partnerships and being more solution-focussed• leveraging the external innovation ecosystem locally to enhance value• availability of talent in emerging technologies• running complex multi-shore delivery models• bridging cultural gaps.
Over time, by nurturing an environment of collaboration, learning and continuous improvement, they have beensuccessful in overcoming such challenges. Today GCCs are not only contributing to their parent organisations’
success but are also propelling India’s economic growth. At present, GCCs in India account for more than 1%of the country’s GDP20 and the share is expected to grow further. As more global players eye India to set up
their GCC operations, the government has a crucial role to play in facilitating their entry.

Dheeraj Gangrade
Partner and Leader – Consulting, GCC
PwC India
India’s ascent towards becoming a hub for GCCs is a testament
to its skilled workforce, enabling environment for innovation andcommitment to driving business excellence at a global scale. GCCs
in India are moving up the value chain and have become a sourceof competitive advantage for the parent organisations. For them toplay a much bigger role in driving complex digital transformation
initiatives, it’s important for GCCs to align their talent strategy andtechnology capabilities with the changing business needs of anorganisation.

20. https://www.scmp.com/news/asia/south-asia/article/3224005/indias-rise-worlds-back-office-spotlight-service-sector-booms
11 PwC | Our Take

Recommendations

Simplify the entry process
Navigating India’s complex regulatory environment can be challenging. Lack of a cohesive regulatory
framework can result in operational delays and increased compliance costs. The central and state governments
need to work towards streamlining and simplifying regulatory processes making them transparent and efficient.
This enables seamless implementation of the policies launched by various states. For instance, Tamil Nadu’s
Research and Development Policy 2022 offers special incentives to R&D centres and GCCs. These include a
special capital subsidy, innovation lab incentive, and subsidies for software licences and product testing andprototyping facilities.21
The Government of Maharashtra has launched a new IT/ITES policy 2023 which includes provisions for GCCs
and data centres and a special focus on establishing an integrated CoE and developing innovation clusters inline with the NASSCOM startup warehouse programme of Maharashtra Industrial Development Corporation(MIDC) in the state.22
While evaluating various growth paradigms to enable future expansions, GCCs also need to assess the statepolicies in alignment with the critical factors of business, ease and cost of operations in the long run.

Build trust and secure data privacy within the organisation
With the Parliament’s green light to the new Digital Personal Data Protection (DPDP) Act, 2023, navigating dataprotection regulations will be an added focus for the GCCs. GCCs in India often handle sensitive and personaldata, including data which has originated within the country as well as data from other countries because alarge amount of data is shared between the headquarters and the centres. The data points are usually stored
in large data lakes in a personalised database that can be accessed for processing and carrying out theoperations.
Moreover, many GCCs collaborate with third-party vendors and may need to review their contracts andagreements with service providers in view of the requirements of the Act. By demonstrating a commitment todata security compliance, putting data protection measures in place, and investing in robust security measures,
GCCs can strengthen the trust quotient and increase stakeholder confidence.
In these circumstances, it is important to partner with an advisor to help navigate the granularity of the Act andits implications.
Three key steps that companies need to take to ensure adherence to the Act include:
1. Begin by evaluating the current situation and start building data privacy within the organisation.
2. Compile a list of applications and data repositories containing personal data.
3. Identify the network of data processors which are currently in use and communicate to the third parties about
their obligations with respect to the personal data they are holding on behalf of the data fiduciary.23

21. https://www.thehindubusinessline.com/news/tn-releases-policies-on-rd-and-life-sciences-promotion/article65599274.ece
22. Maharashtra IT/ITES policy
23. PwC India, The Digital Personal Data Protection Act, 2023
12 PwC | Our Take

GCCs could consider setting up a privacy organisation that consists of a data protection officer (DPO) andrepresentatives of various functions along with their roles and responsibilities.24 Additional actions they can takecould include:
1. designing consent mechanisms to offer choices and options to data principals (individuals whose data is
being processed),
2. establishing processes to address various rights which have been provided to data principals, and3. setting up procedures to address data privacy breach management.25
GCCs could also implement data privacy technologies that can be leveraged for data protection.26

Chalk out a strategic roadmap to enable end-to-end value creation and sustainability
To enable a smoother transition towards value creation, GCC leaders need to develop prudent strategies in thefollowing areas:• Change management: It is important to implement effective change management strategies to navigate
organisational shifts smoothly. Clear communication, stakeholder engagement, and training are crucial tosuccessful transformations. Some GCCs have started factoring that in.
A multinational bank needed to overcome bottlenecks in its GCC operating model that were exacerbatedby fragmented business, system and data architecture. A team of PwC India specialists drafted acomprehensive work plan for the employees of the GCC availing of the latest technologies and adopting apeople-centric approach to change management. The team also drew up a sustainable roadmap comprisinga tiered leadership engagement model while simultaneously helping set up an enterprise resource planning(ERP) software CoE to enable the GCC to grow the expertise in-house and reduce operational costs.
• Agility and flexibility: Fostering an environment that encourages adaptability and flexibility would help
respond swiftly to market changes, customer needs and keep track of emerging opportunities. This could
involve research and development efforts, building strategic partnerships and tapping newer markets. Byprioritising continuous improvement and innovation, an organisation can remain ahead of the curve.
• Holistic performance metrics: While near-term success hinges on operational efficiencies, the distant future
requires a comprehensive shift in performance metrics. Beyond the financial indicators, GCCs must track
innovation velocity, patent filings and partnerships with start-ups. Measuring the social impact, community
engagement and environmental, social and governance (ESG) contributions is pivotal to align GCCs with thebroader purpose-driven objectives of the organisation.
GCCs in India have already joined the sustainability bandwagon. From building sewage treatment plants androoftop solar plants to using old smartphones as cameras for medical diagnosis, GCCs are finding uniqueways to create sustainable value.27 Sustainability metrics serve as indicators of an organisation’s capacity forlong-term resilience and its ability to thrive in a changing landscape.

24. Ibid.
25. Ibid.
26. Ibid.
27. June 2023. Nasscom & Zinnov. India-redefining-globalization-blueprint
13 PwC | Our Take

Empower the talentIndia’s proximity to other emerging markets is one of the key reasons why parent organisations are looking
at India to house strategic global roles. This underscores the need for companies to invest in leadershipdevelopment programmes to empower the Indian workforce to take on global responsibilities. Securing andretaining talent can also be a formidable challenge in a competitive job market. According to a recent PwC
survey, 46% of employees in India are likely to switch jobs in the next year.28 Last year, GCCs met 46% of
their talent needs by absorbing employees from IT and new-age companies, according to a survey.29 By 2030,
nearly 20,000 global roles in GCCs will be housed in India as offshore units become strategic centres for theheadquarters.30 GCCs, therefore, need to create talent in-house, incentivise company loyalty and facilitate
collaboration with the education industry to create specific training programmes.

Focus on cultural integration and inclusivity
GCCs are increasingly focusing on inclusivity and diversity as a core aspect of their strategic charter. At least
55% of the GCCs have a diversity council at their India site.31 Bridging cultural gaps between the parent
company’s culture and the local workforce can often be a tricky and sensitive job, especially in Tier-2 cities
which may have entrenched local norms. Companies need to foster a culture of inclusion and collaboration
at the workplace and facilitate cultural integration through sensitisation programmes and cross-functional
interactions. Establishing clear key performance indicators (KPIs) is essential to help employees align theirefforts with organisational goals.
A GCC delivery centre looking to evolve into a transformation hub has engaged PwC India to design a KPI
cascade and key result areas (KRAs) for their employee performance management. Our team is helping provide
the GCC’s employees with a roadmap to enable them to understand their role in achieving organisational
objectives.

Kavan Mukhtyar
Partner and Leader – Automotive,
PwC India
Automotive GCC leaders in India will need to re-orient their value
proposition, be agile, flexible, and inspire India’s highly capable andunique talent pool to build world-class capabilities and solutions.
It is imperative that Indian automotive GCCs, the Government andacademia collaborate to build a robust ecosystem that can deliver atscale to capitalise on the big changes that are now underway.

28. PwC’s Global Workforce Hopes and Fears Survey 2023
29. GCCs step up hiring
30. June 2023. Nasscom & Zinnov. India-redefining-globalization-blueprint
31. Ibid.
14 PwC | Our Take

Adopt intelligent automation
Companies looking to grow in terms of size and revenue need to reinvent their digital strategy. GCCs will haveto strategise technology adoption, from selecting the right platforms to implementing robust cybersecurity
measures and ensuring a secure, tech-enabled environment. At present, nearly 30% of the GCCs havededicated CoEs for intelligent automation in India, while 50% of the companies are in the test phase.32 GCCs
need to leverage the capabilities of cloud computing and data analytics to drive their expansion.
PwC India collaborated with the GCC of a software company to reconfigure its operating model around dataand customer insights. The outcome of this endeavour was a deeper customer engagement through datadriven customer insights, and strategic planning and throughput based on data-driven decision making.
In another instance, our team helped the GCC of a beverage manufacturer in their digital transformation journeyby bringing the right mix of technical and management skills which enabled the client to automate its key
processes and obtain data driven insights for its HR, supply chain management and procurement functions.
Our team also collaborated with the GCC of a multinational retailer to provide finance record-to-report (RTR)
process consulting along with a roadmap for data analytics. The engagement aimed to identify processes,
technology improvements and new interventions across the RTR process for simplification, standardisation andautomation while creating a transformational roadmap for technology interventions.

32. Ibid.
15 PwC | Our TakeManaging risks and developing mitigation strategies
The world we work in today has witnessed disruptions in nearly all areas – health, economics and markets,
including labour market and supply chains. The current geopolitical scenario and sanctions, among otherfactors, are adding to the complexity of the environment. The rapidly changing business environment demands
agility, cooperation and a panoramic view of risk among the C-suite.
Given these circumstances, the interconnectedness and velocity of risks have increased. Managing risk today
is about changing the way we perceive things, shifting our perspective and considering different angles toanticipate risks. As organisations undergo digital transformation, it is important to consider risks beyond the
traditional ones to ensure that the transformation programmes deliver on their expected potential.
GCCs will play a key role in driving and operationalising risk management programmes for their parent
organisation, as they focus on standardisation and transformation of processes and technology, enabling theeffective adoption and success of change initiatives. GCCs will also play a pivotal role in ensuring that risk
management approaches are part of large change initiatives within the organisation. To effectively manage risk
during digital transformation, organisations need to:• adopt a proactive approach to identify risks and develop mitigation strategies• equip employees with the skills and knowledge needed to navigate change• continually monitor progress to ensure all key risks are managed through the transformation journey.

Manu Dwivedi
Partner and Leader – Cybersecurity and Risk Consulting, GCC
PwC India
The growth story of India’s GCCs continues on a positive upward
trajectory, supported by the country’s unique ecosystem comprisinga skilled workforce, favourable business and policy environment,
and growing infrastructure. These factors are fast becoming the
key drivers of the parent organisation’s innovation and digitaltransformation agenda. As GCCs transform themselves to createand deliver additional value, it is the need of the hour to ensurethat the risk functions step up as effectual partners for businesses,
helping them to navigate these changes and acclimatise to theemerging risks, innovations and disruptions – at the same pace.

16 PwC | Our TakeFast forward
GCCs evidently are gearing up to be able to think ahead of their parent companies to drive growth andinnovation, and to continue to upskill their workforce to avoid losing top talent. The road ahead holds muchpromise:• GCCs are fast becoming the hub for digital and futuristic products for global corporates.
• They are evolving from enablers of business to strategic business partners.
• Single-function GCCs are expanding into multi-function centres.
• Partnerships between GCCs and ecosystem players are becoming deeper and wider.
• Transforming into a global sourcing hub for the entire organisation’s IT and business process needs has
become a key aspect of the GCC’s charter.
• The focus is now on business value and innovation supported by high-quality talent, technology andleadership.
As GCCs continue to realign their purpose and strategies with changing business needs, the following are a few
key aspects that are likely to shape their transformation and impact.
• Data-driven decision making: GCCs will have to harness the power of data analytics to inform strategic
decision-making. By analysing vast datasets, these centres will gain actionable insights that guide
operational improvements, resource allocation and innovation strategies.
• Cybersecurity guardrails: As technology integration intensifies, cybersecurity will become a cause forconcern. GCCs will need to prioritise robust cybersecurity measures to protect sensitive data in the light of
the new DPDP Act.
• Talent development and upskilling: Offshore units will focus on nurturing a culture of continuous learningand upskilling. Investing in employee development and providing opportunities to acquire new skills will be
crucial to attract and retain specialised talent.
• ESG initiatives: Given the heightened emphasis on ESG considerations, GCCs need to walk that extra mile
to position themselves as champions of sustainability and responsible business practices.
• Redefining the organisational structure: Clients are now looking to redefine their organisational structures
to be coherent with the parent organisation and redefine their operating model which is fit-for-purpose.
While GCCs have been evolving into strategic enablers, driving organisations to new successes, they arealso demonstrating an ability to seize opportunities that lie at the intersection of local dynamics and global
strategies.
As macroeconomic headwinds force companies to become more cash conservative, they will increasingly turnto GCCs to build systems at scale with a well-defined roadmap outlining goals and KPIs. As the line between
GCCs and their headquarters gets redefined, these offshore units will be required to embrace a forward-looking
approach that can anticipate market trends, identify emerging opportunities and show resilience in the face ofpossible disruptions.

17 PwC | Our Take

PwC India’s framework to set up a GCC in India
Before setting up a GCC, it is necessary to have a comprehensive methodology in place, combining strategic
foresight, rigorous assessment and meticulous planning to create a framework that is agile, adaptable andpositioned for long-term success.
PwC India, with its tailored strategies and extensive experience, empowers companies to• set up GCCs by being a one-stop solution in the entire journey• scale operations• integrate advanced technology in functions• navigate tax and legal complexities• undertake a smooth transition journey.

Step-by-step guide
1 Strategy development• Strategy development• Business model preparation• Sponsorship and steering committee design• Scope/process analysis• Organisation design• High-level implementation plan

• Location analysis• Vendor/partner provider selection• Change and communication management• Identification of options• Service approach decision

2 Feasibility analysis• Target operating model design3

3 Design• Detailed process/service scope
analysis• Risk assessment• Business case development• Organisation structure design• Recruitment and retention plan

• Facility design• Detailed implementation plan development• KPIs and metrics design• Transition approach development• Training strategy development• Risk assessment• Implementation• Training delivery• Risk assessment• Recruitment and hiring• Office and IT set-up• Service-level management
framework design• Governance design

4 Implementation and transition• Transition management• Process documentation development • Business case tracking

5 Optimisation and transformation• Health check• Digital finance diagnostic• Robotic process automation (RPA) • Vendor/partner contract review

6 Reassessment• Service delivery review• Business case reassessment

18 PwC | Our Take

• Operating model review• Redefining relationships• BPO contract review• Process ownership review

Step 1: Strategy development
Central to designing a strategy is process optimisation. By outlining end-to-end operations, consideringright sizing, span of control and governance model, the firm can ensure collaborative workflows in the GCC,
embedding the necessary technology stack. As part of crafting the strategy, a business case is developed,
taking into account financial projections, operational benefits and the risks associated with setting up GCCs.

Step 2: Feasibility analysis
Assessing the scope of the business case developed is crucial to enhance process optimisation. The
defined scope and feasibility study act as feedback to develop a target operating model. Ecosystem and risk
assessments can further adjust the model to fit business needs. Changes made here are like a double-edged
sword, as they can either optimise or push back the process. Having a strong change management system inplace helps in designing a strong implementation plan.
Organisations need to evaluate various parameters of growth as they plan to undertake their growth journey inIndia. In addition, they must identify the right states and locations which will enable long-term and sustainable
operations.

GCCs need to evaluate various parameters to drive growth and transformation
Factors of growth
1

Cities'attractiveness

Sectoral grossvalue add

Socio-economic
parameters

Internationalrecognition

Economic potential
index

Industry linkages

Innovation ecosystem

2
Business
imperatives

Talentecosystem

Research anddevelopment/intellectual
property creation

Talent and innovation ecosystem• IT and IT enabled service ecosystem, share of IT exports• Intellectual property, R&D and software CoE, data
centres, academia and universities, employable talentpool
Real estate and infrastructure• Potential for commercial/IT park development• Models for asset acquisition – buy vs lease3
Operations andcost-related

4

Govt policies
and incentives

Power and utility

Workforce/wages

Information andcommunication technology/IT park infrastructure

Real estate• Government and private developersp

Favourable government policies

Ease of doing
business

Fiscal/ non-fiscal
measuresSkilldevelopment

Regulatory
clearances• Information and communication technology andsectoral policy framework• Research and innovation support• Skill development and CoE engagement/public private
partnership

Step 3: Design
In the third step, the unique value proposition of the GCC’s services is defined, along with the key performanceindicators (KPIs), enabling effective monitoring of outcomes. This is followed by developing a talent acquisition
and retention plan encompassing details of the organisational structure and job descriptions. This stage is vitalfor enhancing the capabilities of the GCC workforce and facilitating training workshops and staff orientation.
Devising a phased implementation roadmap, including activities and milestones, helps the centre identify
dependencies between various phases and functions, and allocate necessary resources for each phase.
19 PwC | Our Take

Step 4: Implementation and transition
As the blueprint for building an offshore centre takes shape, the transition phase emerges as a critical juncture
in realising the full potential of the GCC. Fit gap analysis assumes centre stage for identifying the gaps
between the GCC’s functions and the parent organisation’s expectations, further paving the way for targetedinterventions. Evaluating prospective office space requirements based on workforce dynamics, occupancy
patterns, and demand management sets the stage for the meticulous selection and eventual finalisation of theideal location. During this phase, meticulous planning and creation of office layouts, along with the installationof furniture, equipment, and essential IT software and hardware all come to fruition. The recruitment process
follows shortly. Facilitating a hassle-free onboarding process that acclimatises employees to the organisation’s
vision and goals is paramount for building a cohesive workforce ready to drive the transition.

Step 5: Optimisation and transformation
Every organisation is unique, and its operational requirements differ. Collaboration with stakeholders tounderstand the pain points, expectations and areas of improvement will ensure that the GCC’s process aligns
with the company’s objectives. Next, business case tracking based on baseline data collected provides
the GCC with actionable insights for informed decision making and desired outcomes. Assessing digital
readiness is imperative for understanding the scope of technology interventions, technology gaps and areasof enhancement. This assessment helps identify opportunities where technology can amplify the centre’s
efficiency.
In this stage, revisiting and refining the operating model, encompassing cost-effectiveness, governancestructures and communication channels, ensures that necessary adjustments are made for the GCC’s optimal
performance. As part of the evaluation process, employee perception is also sought and analysed, and theirviews factored in. Organisational relationships are also reviewed to enable effective knowledge sharing and acollective effort towards achieving GCC’s strategic goals. This step also becomes the first stage of assessment
for any further strategic changes and new implementations along the way.

Step 6: Reassessment
Engaging key stakeholders to conduct GCC visioning workshops and data collection interviews is key toframing a strategy that will align with the firm’s objectives. This is followed by a thorough talent evaluation
process, business case reassessment and strategy development to ensure seamless integration of capabilities.
A thorough review of the operating model, vendor/partner contracts and process ownership is also conductedto ensure a seamless implementation of the strategy.

20 PwC | Our Take

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Contact us
Vivek Prasad
vivek.prasad@pwc.com
Markets Leader, PwC India

Rajesh Ojha
rajesh.ojha@pwc.com
Partner and Leader - GCC Markets

Manu Dwivedi
manu.dwivedi@pwc.com
Partner and Leader - Cybersecurity and Risk
Consulting, GCC

Dheeraj Gangrade
dheeraj.gangrade@pwc.com
Partner and Leader - Consulting, GCC

Also contributing to this article were Unnikrishnan Padinjyaroot, Vishnupriya Sengupta, Shruti Kumar, Savan
Tirthe, Ruchika Uniyal, Rumela Sinha and Jhanvi Sharma.

DesignKirtika Saxena

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