Mid-market global capability centres tend to grow faster than larger peers, without burden of legacy issues: Nasscom

Mint

23-04-2025

Technology centres of midsize global companies – with revenue up to $1 billion – tend to scale up faster than their larger peers because they are leaner, more agile and innovation-focussed, according to the National Association of Software and Services Companies (Nasscom).
The global capability centres of mid-market companies can grow stronger on account of faster decision-making, smaller teams and higher focus on engineering and research, Nasscom and experts said.
GCCs of top foreign companies such as Amazon, JPMorgan Chase, Boeing and Walmart operate as strategic hubs in India. They drive innovation and provide crucial support to the global operations of these companies in the areas of information technology, sales, human resources, marketing, and supply chain management.
According to Nasscom, India is home to more than 1,760 GCCs, of which 480 are mid-market GCCs. These include Arctic Wolf Networks Inc, BlackBerry Ltd, IDP, and Modernizing Medicine Inc.
'While mid-market GCCs often start as outposts like their larger peers, they tend to progress 1.2x faster along the maturity curve, aided by focussed charters and closer reporting alignment to the GCCs," according to a Nasscom-Zinnov report released on 22 April. This is because of three key factors.
'The maturity of mid-market GCCs within the transformation hub category is largely driven by strong portfolio ownership, higher number of global roles and high R&D intensity, positioning them as innovation-focussed extensions of the enterprise," Nasscom and Zinnov said in their report, 'India's GCC Leap – Powering Global Mid-Market Momentum.'
Most mid-sized GCCs are located in Bengaluru, followed by Hyderabad, the Nasscom report estimates. Together, the two cities make up for almost half of the 680 mid-market GCC units in the country. Units are smaller than centres and are similar to branches of GCCs.
At least one expert said mid-market GCCs are sprouting in India driven by digitisation and the fear of becoming obsolete.
'In the past, India was a back office for global companies. Today, more and more mid-market companies are wanting to establish GCCs here because of the availability of digital talent, ease of doing business, and the fear of getting obsolete," said Viswanathan KS, a former Nasscom executive.
According to another expert, a leaner team helps these GCCs grow quicker because they are more focused.
'With leaner teams and tighter budgets, these centres operate with a sense of purpose and urgency that's often lost in scale," said Ramaswamy Narayanan, chief executive officer of Bridgepath Solutions, a Bengaluru-based consulting firm that helps set up GCCs. 'They don't have the luxury of inefficiency, which means execution is sharper, alignment is tighter, and impact is faster. Most often, they build focused capabilities that are aligned to their business growth as opposed to mere run-and-operate type of work."
Ramaswamy added that such GCCs grow faster because they are 'not burdened by legacy systems or complex hierarchies, they adapt quicker, integrate new capabilities faster, and evolve in sync with enterprise priorities."
'Mid-market GCCs can scale quicker than larger peers because they are more agile. Decision-making is also quicker because of higher global roles, and they also have the ability to hyper-specialise because of their smaller size," said an executive at the GCC of a large US bank.
Still, these GCCs are fraught with challenges. For one, the parent companies are not as famous, and this can make it tougher for their GCCs to attract entry-level talent.
'Minimal brand presence restricts influence in local startup, talent and academic ecosystems," said the Nasscom-Zinnov report. 'Difficulty in establishing and scaling innovation partnerships with vendors, startups, and academia" is another challenge that mid-market GCCs face.
The other issue is the tendency to wind up operations impulsively.
'They are also quite impatient when it comes to lack of results and may shut down as quickly as they set up if the results are not meeting their expectations," said Narayanan.
Still, another expert said the share of mid-sized GCCs is expected to increase to more than 800 by 2030, making up more than a third of the GCC landscape in the country.
'The connect with the market will be way higher for mid-market GCCs," said Pari Natarajan, chief executive officer of Zinnov, adding that such GCCs would better understand the workings of their customers.
Even as more such GCCs emerge, certain sectors hold out additional scope for them.
'While tech adoption leads, verticals like BFSI (banking, financial services and insurance), healthcare and professional services remain underrepresented in India's GCC landscape – offering untapped potential for specialised mid-market entrants," Nasscom said in the report.
The emergence of mid-market GCCs comes as companies insource a chunk of their tech work. Traditionally, Indian software services companies would support the IT infrastructure for some of the largest companies including Morgan Stanley, Citibank, Apple and Amazon.
However, with technology taking centre stage, most of these companies now hire teams directly to handle their technology work, cutting the reliance on IT outsourcers.
At least three IT outsourcing companies – Accenture Plc, HCL Technologies Ltd and Cognizant Technology Solutions Corp – have called out risks from GCCs in their annual filings, even as they set up units to work with them.