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Mint
09-05-2025
- Business
- Mint
GCCs prefer hiring leaders from peers than IT services companies
Backend technology centres of the world's largest companies are increasingly hiring senior executives from peers as compared with information technology (IT) services companies, indicating a preference for innovative work, domain knowledge and better understanding of captive offices. A little over a third–or 36%–of executives with more than eight years of work experience hired by global capacity centres or GCCs came from rivals in the year ended March 2025, according to a report by Xpheno, a Pune-based staffing firm. That's an increase from 28% in the year March 2023. By comparison, the share of middle and senior executives hired from the IT services sector during the period shrank from 50% to 40%. IT products and startups account for the remaining hires by GCCs, according to the findings based on a study of the 'top' 120 GCCs in India that employ 1.35 million people–or over three-fourths of the total active workforce of such centres. The preference for senior executives from within the GCCs marks a significant shift when more global roles of Fortune companies are shifting to India. According to IT industry lobby National Association of Software and Services Companies (Nasscom), there are 6,500 global roles in India for the country's 1,760 global capability centres (GCCs). This number is expected to jump almost fivefold in the next five years to 30,000. Also read | India office Reits report higher FY25 income, leasing on strong GCC demand "GCCs, which are increasingly looking for more innovation, want talent that has been involved in innovative work in the past rather than those who deliver transactional services. Some GCCs have groomed leaders who have led such transformations, leading to the rise in hiring from peer GCCs," said Kamal Karanth, co-founder of Xpheno. 'The mandate of some of the tenured and new GCCs has moved to transformation and innovation. So culturally and operationally, that's a different DNA," he said. 'Hence, hiring leaders from these GCCs experiences is a culturally better fit and gets them to a quicker operational speed." More global focus GCCs are back-end offices of top foreign companies such as Amazon, JPMorgan Chase, Boeing and Walmart that handle work related to IT, sales, human resources, marketing, and supply chain management. More than 875, or half of the country's GCCs, are based in Bengaluru, while Hyderabad has about 355. The rest are located in cities such as Delhi NCR, Pune, and Chennai. Nasscom estimates the number of Indian GCCs will hit 2,200 by March 2030, with a market size of $105 billion. To be sure, the bulk of the workforce in such centres still comes from IT services companies. These captives hire in two primary ways: freshers from colleges during campus placements, and lateral hires from IT outsourcers, other GCCs, startups, and software product companies. While GCCs and IT services companies cover similar roles, there is a difference in their approach, which is reflected in hiring preference. Read this | Captive concerns: Why Cognizant has called out the risk from GCCs 'Being in the GCC, you think like the parent company and are a lot more business-focused than in an IT services firm, where you concentrate in performing a piece of work that has been given to you by the customer," said Aveek Mukherjee, co-founder of Gloplax. 'The responsibilities of senior GCC managers are lot more global and take into account all the constituents including strong people skills, specialised in-house capabilities, and cross-functional expertise." In the past, leadership switches at GCCs were not just limited to executives of the same industry. Jaideep Agarwal took over as the India global business solutions (GBS) leader for Warner Bros. Discovery in February 2023. He had served as the managing director of Goldman Sachs in India until June 2022, before serving as an independent consultant. Sirisha Voruganti was appointed as the chief executive of Lloyds Tech Centre India in July 2023. She earlier served as the managing director of JCPenney in India. Contextual knowledge However, Viswanathan K.S., digital transformation advisor and former Nasscom vice-president of industry initiatives, said executives from captive centres and those from the same sector come with more contextual knowledge than those from IT services companies. 'IT services companies prepare people as technologists, whereas GCCs prefer those with tech, domain and contextual knowledge," said Viswanathan K.S., digital transformation advisor and former Nasscom vice-president of industry initiatives. 'Suppose a person is being hired for the role of a delivery manager in a retail outlet. They must not just have technical knowledge, but also have a sense of warehousing, loyalty programs, and groceries in general." At least half a dozen executives have taken up leadership roles in GCCs of the same domain in the past three years. And this | The boutique consulting firms powering India's next GCC boom Naveen Gullapalli took over as managing director of Amgen India's technology and innovation centres in December 2024. He previously headed the global business solutions team at Novartis, a company where he spent 13 years. Arindam Banerrji took over as India head of State Street in October 2023 after a five-year stint at Wells Fargo, where he last served as its executive vice-president and managing director for India and Philippines. "Any hiring preference is truly driven by the role and the required skill sets," said Mukherjee. 'A GCC leader when looking for talent, especially at senior levels, would place greater value on the in-depth firsthand experience gained by a delivery/product manager within a GCC construct. This preference gets stronger when it comes to hiring for niche roles with experience in the same industry or domain-specific capabilities," said Mukherjee. Intellectual 'echo chamber' Still, hiring senior executives familiar with GCCs could pose a different challenge. "What appears as comfortable familiarity masks a deeper challenge: when the same leadership talent circulates between centers with only the logo changing, we risk creating an intellectual echo chamber that values predictability over transformation," said Kaushik Srinivasan, chief executive of KaN Associates. He added that GCCs could work around this nuance a little better. And read | Culture is the most important aspect of how you run a GCC: Tesco's Sumit Mitra 'The most visionary GCCs recognize that while contextual understanding is valuable, true innovation often comes from integrating perspectives from product companies and consulting firms that challenge established paradigms," he said. 'The centres that thrive will be those that balance the safety of proven GCC experience with the disruption of fresh industry perspectives."
Mint
23-04-2025
- Business
- Mint
Mid-market global capability centres tend to grow faster than larger peers, without burden of legacy issues: Nasscom
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.
