 "Bhaskar Verma, Regional Director, Nasscom, Pradeep Menon, MD, HSBC Tech India, Vijai Kishan, India Regional Chair, Fidelity Investments, Andrea Zimmerman, SVP & President in India, Target, and Milesh J, VP, SAP, during the session at Bengaluru")
India’s global capability centres (GCCs) are fast evolving from back-office support centres to dynamic hubs of innovation and talent, tech industry leaders said at the ‘Bengaluru Tech Summit 2024’ on Wednesday. Companies which had started operations for cost arbitrage are now chalking out their future course of action here, they said.
“GCCs are no longer supporting backend functions. They have evolved in terms of driving innovation,” said Milesh J, vice president, head of strategy and operations at technology company SAP.
He gave the example of SAP India, which began its operations in 1996 with headquarters in Bengaluru and 100 employees. It has 16,000 employees now.
Back then, it started with enterprise resource planning (ERP) solutions for the Asia Pacific market and some industry verticals.
“But, we took a conscious call of not running it as an offshore centre, which is doing some low end jobs. We wanted to actually integrate our India development centre into the four global hubs of development centres that we had,” said Milesh. “I am very proud to say that SAP pioneered the concept of distributed research and development.”
In 2004, Milesh started a product team in which half of the employees were freshers. In the next few years, this team ran the entire support operations for those products. This then evolved into product development and business responsibility.
“I think this is exactly how Indian entities from a GCC standpoint have followed,” said Milesh.
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India’s GCCs are projected to become a $100 billion industry by 2030, employing over 2.5 million professionals, according to a report.
The study, titled ‘India’s GCC Landscape: A Strategic Pathway for Mid-Sized Aspirational Corporations to Scale Beyond’, highlighted India’s position as a hub for over 1,700 GCCs. These centres collectively generate around $64.6 billion in annual revenue while employing 1.9 million professionals across diverse operational areas.
“The level of work for (GCCs) has changed including the type of ownership and capabilities,” said Andrea Zimmerman SVP and president for retail giant Target in India. “That is important because it paves the way for the ambitious growth in front of us.”
Zimmerman said the rapid growth of the GCCs is the testament of the investment and time that has been spent on nurturing this ecosystem.
Zimmerman said what is special about ‘Target India’ is that the company has every single capability represented at its site in Bengaluru. This includes merchandising, store design, architecture, finance, human resources and supply chain.
“That unlocks for us the ability to drive elevated impact and value for Target back in the US, because of the way these teams work together,” said Zimmerman.
“The last time I was here, our team was about 1800 people and now we are over 5,000.”
Vijai Kishan, head of Fidelity Wealth & Brokerage, India and India regional chair, Fidelity Investments, said that like many others his company had also started its operations in the country for cost arbitrage. However, that has changed.
The plans related to how the company should look in the future are being made in the country.
“We have created the microcosm of the whole firm here in India. The beauty of what happens here is that you are not working on market hours, though we trade globally. What we can achieve is the business coming together to build the future of the firm. That is what we are focused on right now, in terms of bringing in talent across technology operations, analytics and data science. And essentially build out what this company should look like in the future,” said Kishan.
“There are some very wonderful solutions that have been actually thought through here and taken global. A lot of partners are really amazed to see the share of the digital economy and the financial inclusion in the country,” he said.
Pradeep Menon, MD and CEO, HSBC Technology India said that the GCCs and IT ecosystem has evolved over the last 30 years and there is a lot of good talent in the country.
“To make this more significant, the ‘business connect’ and ‘customer centricity’ is very important,” said Menon.
“This has to be inculcated by culture as much as the ecosystems in which we play. There is this adage which we keep talking about and it says, ‘What got you here won't get you there.’ That is also true in the GCC space,” he said.
At a time when artificial intelligence is bringing the most disruptive and profound change the technology industry has ever witnessed, Milesh of SAP was of the view that GCC would have to adapt to the change and focus on skilling in emerging technologies.
He also pointed out that India has to invest a lot to build an AI ecosystem and file AI patents. This is mainly being dominated by China and the US. “At SAP, we are building our own foundational model (a form of GenAI) and India is playing a significant role in it,” said Milesh.
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