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Does the emergence of global capability centers (GCCs) undermine the future of technology-based service providers in India? Technology company CEOs sometimes raise concerns about future business growth when “our customers are setting up their shop in India.”

A common perception is that GCCs and technology partners (TPs) are in somewhat mutually exclusive spaces. Effectively, this means that GCCs are self-sufficient and do not need technology partners!

This is simply a myth.

The truth is that most GCCs require TPs for the following inherent constraints:
● Limited workforce that restricts technology-led innovation
● Limited skills in implementing the latest technologies like digital twins, AR/VR, RPA, etc.
● Faster scale-up, implementation, and turnaround from TPs

The 2024 Davos summit highlighted the importance of business collaboration between GCCs and technology service providers. As partners, both these entities deliver their unique strengths to the mix.

Here are 6 possible business scenarios and drivers where GCCs can engage meaningfully with technology partners:

Technology innovation

With their R&D capabilities, GCCs in India have emerged as the driving force for technology-led innovation for their parent companies. According to the latest estimates, 50% of new R&D centers around the globe qualify as GCCs. This highlights their contribution to the development of new technologies such as AI and digital twins.

As more GCCs grow into innovation-led and data-driven entities, they need the capability to quickly scale up their technology expertise. This is where well-established technology providers can deliver value through:
● Cost-effective support for innovation centers
● Targeted execution of next-gen technology solutions
● Implementation of new solutions and technologies in quick time

Operational growth

Mid-sized GCCs in India typically suffer from stagnation due to their limited size and constrained capabilities. These GCCs generally belong to medium-sized companies with limited ability to compete with the big brands for resources and talent.

Due to a lack of operational growth, mid-sized GCCs struggle to rise to be a truly “innovation” center (or CoE) – or move up the technology maturity level. An additional challenge for them is to tap into India’s pool of technology workers and reduce their skills gap.

By partnering with an established TP, GCCs can address each of these challenges and drive the next phase of operational growth. Through their holistic approach to tech-led innovation, TPs can fulfill the lack of skills and manpower needed by fast-growing GCCs in India.

Augmentation of technical skills

One of the popular perceptions is that an Indian software engineer employed by a multinational GCC is one less resource available for Indian technology companies to hire. This is far from the reality because the war for talent is still on in full force. Despite the domination of automation tools, the demand for highly skilled professionals will continue to explode in the years ahead.

Through a strategic partnership, TPs can augment the demand for advanced technical skills among GCCs. With their focus on technological expertise, TPs can also address changes in market demands – and deliver GCCs with technical resources for short-term or pilot projects. If a GCC is relatively new in a geography, augmenting skills via TPs make more sense as local talent may or may not be aware of the GCC’s brand.

Product development

Over the years, Indian GCCs have upgraded from providing low-end services for their parent companies – such as managing their IT infrastructure and applications. Modern GCCs offer digital product engineering capabilities and enable its parent companies to leverage latest digital technologies like IoT, digital twins, AI and data analytics to address their business problems.
As new GCCs are established in India each year, technology service providers can help in managing their initial setup. Besides R&D work, TPs can engage in support services like:
● Product development
● Product sustenance and support
● Team Augmentation
● Development of new product features
Through continuous engagement, TPs can help GCCs set up technology hubs and centers of excellence (CoE) to stay ahead in a competitive market.

Problem-solving capabilities

With their problem-solving capabilities, GCCs have a strategic opportunity to implement the business strategies of their parent companies. By working closely with Indian technology partners, GCCs can now address complex problems with a holistic approach.
Here’s how this strategic partnership can improve problem-solving:
● GCCs bring a deeper understanding of their company’s business objectives and values.
● TPs deliver an industry-specific understanding of common business problems – along with technology solutions designed to address these challenges.

Product sustenance and support

As new technologies continue to evolve, the collaboration between GCCs and technology providers can facilitate the navigation of future business challenges. This partnership can build the foundation for sustained product growth and support.
For more matured products, GCCs can even consider outsourcing its sustenance and support to local TPs so that the GCC engineering team can focus on core innovation, enhancements and functionalities in existing products. Technology partners can be leveraged to provide L1-L3 support for matured products.

How Pratiti Technologies can deliver business value to GCCs

The healthy GCC ecosystem in India presents a new business opportunity for well-established technology companies. This does not necessarily mean that GCCs can achieve innovation capabilities by only partnering with large-sized TPs like Infosys or IBM.
As a medium-sized technology company, Pratiti Technologies can deliver GCCs more value in specialized areas like:
New product development
Staff Augmentation
● Technology expertise in Digital twins, IoT, and Data & AI
● Technology-driven innovation
● QA, MLOps and DevOps
● Platform based product development
Our team of technology professionals can help in understanding and addressing your business needs more closely. If you are looking for the right technology partner, do not hesitate to contact us today!

Nitin Tappe

After successful stint in a corporate role, Nitin is back to what he enjoys most – conceptualizing new software solutions to solve business problems. Nitin is a postgraduate from IIT, Mumbai, India and in his 24 years of career, has played key roles in building a desktop as well as enterprise solutions right from idealization to launch which are adopted by many Fortune 500 companies. As a Founder member of Pratiti Technologies, he is committed to applying his management learning as well as the passion for building new solutions to realize your innovation with certainty.

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