The role of a local partners in setting up and enhancing GCC (Global Capability Center) in India

By Kumar Rajagopalan

• Global Capability Centers (GCCs) have evolved from cost-saving and capability enhancing hubs to strategic assets, driving innovation and digital transformation with advanced technologies like AI and cybersecurity.
• Reskilling initiatives and enhanced employee value propositions are key for GCCs to attract and retain top talent while expanding into Tier-II cities in India for cost benefits and searching the newly growing talent pools.
• Local partners are crucial for GCCs, offering regional insights, compliance support, and tailored solutions in technology, talent management, supply chain logistics, and customer relationships.
• Effective collaboration with local partners involves robust risk management, clear communication, and mutual respect, ensuring GCCs leverage local expertise for successful expansion and innovation.

Global Capability Centers (GCCs), once seen primarily as cost-saving hubs, have evolved into key players in driving global business expansion strategies. The focus of GCCs has shifted from merely providing support functions to contributing to strategic business objectives, such as innovation and new product development. This shift necessitates the development of advanced digital capabilities, including AI (Artificial Intelligence), machine learning, data analytics, and cybersecurity.

GCCs are also prioritizing the reskilling of their workforce and enhancing their employee value proposition (EVP) to attract and retain top talent. Additionally, they are strengthening their cybersecurity measures to keep pace with increased digital adoption. Geographically, GCCs are expanding into Tier-II cities in India, such as Pune and Chennai, attracted by lower costs and growing talent pools.

Local partners play a crucial role in Global Capability Centers (GCCs) by providing essential regional insights, fostering talent development, and enhancing operational efficiency within expanding Tier-II cities.

Understanding the Indian Business Environment

Navigating India’s intricate business landscape requires expertise, which local partners are well-equipped to provide. The regulatory environment in India is dynamic and comprehensive, featuring a diverse range of laws, regulations, and compliance standards. Local partners possess a deep understanding of these regulations and assist multinational corporations (MNCs) in securing necessary approvals, licenses, and clearances. They ensure GCCs adhere to local laws and facilitate smooth operations.

Cultural nuances also play a critical role in business success in India. Local partners offer valuable insights into cultural practices, helping MNCs align their business strategies with local expectations. This cultural alignment improves employee satisfaction, strengthens customer relationships, and boosts overall business performance.

Generally, GCC to stabilize and mature will take around 3-4 years without local understanding. Local partners help in reducing the time to set up the GCC.  In some cases, they can help to head start within 3-4 months and stabilize within 6 months. While cost saving is one of the prime objectives of GCC set up, establishing and maturing should not take away that benefit due to local factors that affect its establishment.  This can be stabilized through local connect and partnership.

The Role of Local Partners in GCCs:

Local partners are essential in enabling GCCs to adapt to their strategic evolution. They provide critical services that enhance operational efficiency and support growth. Here is how they contribute:

Technology and Innovation:

• Local IT partners drive digital transformation by integrating advanced technologies such as AI, ML, and IoT.
• They help GCCs streamline business processes and boost operational efficiency, delivering added value to customers.
• They set up research and development (R&D (Research & Development)) centers tailored to regional market needs, accelerating innovation and product development.

Talent Acquisition and Management:

• Local partners work with regional recruitment firms to source skilled talent, focusing on cultural fit and operational efficiency.
• They partner with local educational institutions to develop specialized training programs that meet industry needs and foster continuous learning.
• They enhance professional skills through effective retention strategies, reducing turnover rates and maintaining a motivated workforce.

Supply Chain and Logistics Support:

• Local partners collaborate with logistics providers to offer customized solutions, ensuring cost-effective and timely supply chain management.
• They address logistical challenges like transportation, warehousing, and distribution, crucial for meeting market demands.
• They facilitate strategic partnerships with suppliers, aligning operations with GCCs’ business objectives.

Legal and Compliance Support:

• Local partners offer essential legal and compliance support, expertly guiding through intricate regulatory environments.
• They ensure adherence to labor laws, tax regulations, data protection, and intellectual property rights.
• Their support helps mitigate legal risks and enforce contracts, safeguarding GCCs’ interests and enhancing operational stability.

Customer Support and Relationship Management:

• Local partners improve customer support by delivering personalized service tailored to regional preferences.
• They manage local call centers equipped with knowledge of regional languages and cultural distinctions.
• They provide insights into local customer behaviours, enabling GCCs to adapt their offerings to better meet market needs.

Marketing and Branding:

• Local partners offer marketing and branding services, leveraging their knowledge of regional markets to create targeted campaigns.
• They assist GCCs in adapting global marketing strategies to align with local tastes and preferences.

Corporate Social Responsibility (CSR):

• Local partners help MNCs design and implement CSR programs focused on education, healthcare, environmental sustainability, and social empowerment.
• CSR activities contribute to local community well-being, enhance brand image, and strengthen stakeholder relationships.
• CSR initiatives also boost employee morale and support GCCs in creating a positive community environment.

Building Strong Partnerships with Local Firms in GCCs

Local partners offer valuable advantages to GCCs, but some challenges may arise, such as differences in business culture, communication styles, service quality, regulatory compliance, and data security. Addressing these challenges proactively can lead to a highly successful and productive collaboration. By anticipating potential hurdles and implementing effective strategies, GCCs can ensure smooth operations and foster a positive partnership.

Best Practices for Seamless Collaboration:

Develop robust risk management strategies, establish clear communication channels, set performance benchmarks, and implement strong data security measures.

Foster mutual respect, maintain open communication, and conduct regular performance reviews to enhance collaboration effectiveness.

Final Thoughts

Local partners are essential for the expansion of Global Capability Centers (GCCs) in India. Their expertise in navigating regulatory challenges, understanding consumer behaviour, and adapting global strategies to local conditions is crucial. Their agility helps GCCs stay responsive to market changes, ensuring effective market entry and a competitive edge.

To maximize success, GCCs should foster strong relationships with local partners, align business objectives, and invest in flexibility. By leveraging local insights, GCCs can enhance expansion efforts, drive innovation, and gain sustainable advantages in the Indian market. Local partners play a vital role in ensuring GCCs excel by providing valuable knowledge in talent management, infrastructure, technology, and CSR initiatives, supporting operational excellence and growth.

Dexian India empowers GCCs for global expansion by bridging the gap with local partners, offering regional expertise, smooth integration, and cost-effective solutions. Dexian transforms GCCs from cost-saving hubs to strategic innovation centers, facilitating advanced digital capabilities, robust talent acquisition, and effective compliance support. Partnering with Dexian ensures GCCs thrive, driving global growth and operational excellence.

Originally Posted on ICT Connect.