Global Sourcing/Offshoring is relocating an enterprise’s business operations, in part or whole, to another country, leveraging talent availability and cost efficiency.

What worked in favor of the GCC model? Cost and talent leverage continue to be the primary levers. Access and ownership of talent by the parent company in a GCC setup tilted the balance in favor of GCCs.  This enabled the teams to be directly connected to the core of the business, paving the way for transformation and innovation, protection of IP, and retention of knowledge within the company.

Typically, there are two broad categories of companies that consider setting up GCCs or insourcing talent at offshore geographies-

• The experienced – companies who have experienced the talent and cost advantages of outsourcing or offshoring via third-party vendors are looking to venture into a GCC mode. A hybrid approach with a balanced mix of outsourcing and insourcing (GCC) is gaining ground as a preferred mode.
  

• The uninitiated – companies have neither experienced outsourcing nor offshoring and are looking to commence their journey with a GCC setup. Attracted by peer success stories, the proven cost and talent leverage, the ready thriving conducive GCC ecosystem, and their business drivers.
  

Multiple levers need to be balanced to derive value and to keep the GCC on track on the maturity curve. The viability of a GCC is proven and there are enough, and more examples of strategic value added to the enterprise. However, not all GCCs are deemed to be successful! So, how does one ensure success? There may not be a simple formula for success as every company is unique.  However, there are some key parameters that any GCC program needs to consider to increase its chances of success.

• The Global Sourcing/Offshoring Strategy – Adopting the right strategy depending on the various objectives and constraints of the enterprise should be the first step.  It will address a few topics (like, Work Type, Location, Platform, Governance, Positioning, etc.) that will act as the guide rails for the program.
  

• The Operating Model – This refers to the way the GCC interacts with the enterprise.  From the initial days of staff augmentation to the Team extension model adopted by mature GCCs, where the GCC has the same vision, values, and culture as that of the enterprise.
  

• GCC Leadership – Although it might seem logical to hire senior leadership as the GCC grows, more successful GCCs have invested in leadership capability upfront and across all key functions.
  

The GCC ecosystem has matured over the past two decades. For someone who is thinking of embarking on their GCC journey, there are many successes and failures in the industry to learn from. The GCC industry is witnessing a paradigm shift. The use case for a GCC has moved beyond the obvious talent and cost play.

• Talent – Talent continues to be the biggest pull to countries like India. The abundance, required skills, language ability, and the deep talent pipeline for the future, with India as the home of the largest youngest population in the world.  This is the best answer for solving the problem of scale.
• Cost – The cost of talent, the cost of operations, and the cumulative cost savings derived out of efficiencies, and currency exchange advantages are significant.
• IP – Intellectual property and knowledge are retained within the company when the work is done out of the GCC, this has been a primary reason for companies moving to the GCC mode. The trend of setting up COEs, increasing R&D work, and filing patents from GCCs has been on the rise.
• Data & Analytics – A related impact has been on using the GCC for data and analytics work. India is home to a large talent pool with an increasing focus on new-age skills in AI/Machine Learning, making it attractive for companies to use the available talent.
• Innovation/ transformation – Companies are realizing the cumulative cost and talent advantages and are setting up innovation and transformation centers at offshore locations. This type of work would be taken up as they were earlier a sign of maturity of a GCC but now companies are directly setting up these centers, changing the GCC maturity paradigm.

The GCC success story has reached far and wide to countries, sectors, and businesses beyond the obvious. Traditional offshoring engagement models are being challenged, and progression on the maturity curve is being fast-tracked or stages jumped to realize the business objective. A GCC enabler’s role has become more critical. Gloplax comprises a team of GCC practitioners driven by the objective of making GCCs simple and accessible. We offer flexible engagement models, and bespoke solutions, and have developed a digitally enabled GCC ecosystem that comprises tools and frameworks that are developed specifically for supporting the GCC at every stage of their lifecycle.