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India is home to around 1,700 GCCs/GICs, a massive 50% of all such centres globally. Ramesh Pathania/Mint
India is home to around 1,700 GCCs/GICs, a massive 50% of all such centres globally. Ramesh Pathania/Mint

GCCs use automation to increase biz during covid

Indian units evolve from being centres of cost optimization to profit generators

Indian global capability centres (GCC) and global innovation centres (GIC) have made use of the covid-19 pandemic to drive more business for their parent companies, said industry leaders at Mint’s CXO Dialogues webinar on Global Capability Centres: Future Re-imagined, Now.

India is home to around 1,700 GCCs/GICs, a massive 50% of all such centres globally. GCCs employ more than 1 million people in India, accounting for a fourth of the 4.3 million-strong tech employment base in the country, generating a total economic value of around $28.3 billion in 2019-20.

Covid has prompted global MNCs to reassess their business and tech preparedness, identify customer needs and implement innovative solutions to drive higher productivity. This is where GCCs are evolving from being centres of cost optimization to profit generators through the effective use of automation.

“We have been discussing ways to implement efficient cost models. Since the pandemic, we have businesses moving from developing countries to our India units as part of measures taken in those countries, generating additional work here. Also, measures to optimize these operations through automation is helping us deploy talent resources to core domain activities," said Binoj Varghese, programme manager, Mercedes-Benz R&D.

According to Varghese, bots helped deliver more work at a minimum additional cost for the parent company, Daimler, which continues to be a driver for technology investments. The company saw a 30% increase in business shifting to the Indian GCC since the covid outbreak, which led to a spike in hiring requirements.

“GCCs were created for situations like these. Automation also increases the level of domain knowledge required from employees, creating better career opportunities," said Anand Devanathan, director, IT, VMware.

In areas of sales and marketing, people with domain skills can be better utilized for building efficient automation models and better employment opportunities, said Devanathan. This, in turn, is shifting major innovation and decision-making capacities of their global businesses towards Indian GCCs.

While the captive business is volume-based with low margins, it is driven 80% by staff augmentation and 20% by managed projects. However, covid is rapidly changing traditional staffing models.

Manoj Jagani, head, robotic process automation, Sony India, said: “The offshore model centres around the volume of full-time equivalent resources that comprise a large share of costs. The pandemic reduced investment capacity of organizations, which impacted hiring capabilities as well as intention of people to switch organizations. Using robots to enable the existing full-time resources can significantly improve cost saving in addition to performing better work. So, the automation-enabled hybrid staff model is here to stay."

He added that automation also helps businesses hire fewer employees with more well-rounded capabilities. Even at 50-60% expertise match, it is possible to hire people as the remaining capacity can be either groomed organically or automated. Further, a lot of HR processes across GCCs are automated, allowing the recruitment teams to also focus on better skill-building programmes.

“The pandemic has helped GICs realize which areas are ripe for automation due to either the mundane nature of the work or high level of repetition involved as they turn their attention on value-added work created now," said Sumeet Pathak, digital workforce evangelist, IMEA, Automation Anywhere.

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