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ZINNOV PODCAST   |   Business Resilience

Inevitable India: Vision 2024 for GCCs and the Tech Ecosystem

K S Viswanathan
K S Viswanathan Vice President, Industry Initiatives nasscom

In a compelling podcast episode, KS Viswanathan (KSV), Vice President of Industry Initiatives at nasscom, converses with Nitika Goel, CMO at Zinnov, delving into the transformative developments within India’s Global Capability Centers (GCCs) in 2023. KSV, drawing from his extensive experience, discusses the significant surge in engineering roles, the strategic integration of Generative AI, and the evolving synergy between startups and GCCs. He elaborates on how these factors signal the maturation of India’s technology ecosystem.

KSV articulates the progression of GCCs from their early stages to becoming globally recognized tech hubs. Looking forward, he provides insights into anticipated trends for 2024, emphasizing the critical role of robust leadership and active community involvement in shaping the future. The conversation effectively highlights India’s shift from a primarily talent-rich environment to a leadership-driven technological powerhouse, suggesting a promising and influential trajectory for GCCs in the global tech arena. This dialogue not only captures the essence of India’s technological evolution but also underscores the GCCs’ pivotal role in redefining the global technology landscape.


Timestamps

01:33How was 2023 for GCCs?
04:11Is India leadership-rich?
05:20How is control being defined in different regions?
09:14Are GCCs eating into the share of IT services companies?
12:02Will GenAI lead to job erosion?
17:45Forecasts for 2024 in GCCs
19:16Roadblocks to look out for in 2024
22:07The Rapidfire

PODCAST TRANSCRIPT

Nitika Goel: What is irrefutable is that 2023 has been the year of the GCC in India. Zinnov and nasscom did a GCC trends report approximately a year ago, and we found that India is home to 1580 plus GCCs. And that number has increased by a whopping 50 new companies if you clock in by December 2023. What is fueling this unparalleled growth?
Is it a talent rich ecosystem? Is it a leadership rich ecosystem? We have 5,000 global roles and counting, we estimate it will go up to 20, 000 global. There’s a lot that is coming into play. Some of it is on technology, some of it on people, some of it is mindset shift. And it is also about a broader ecosystem and the sense of community.
All of these things create the perfect recipe for what is going to unfold in 2024 and beyond. Today, I have with me a veteran in this ecosystem who has seen India across many, many different lenses. He has worked in the services space, he has worked in the product space, and now is an ecosystem champion. He’s fondly known as KSV. And it is my pleasure to have him in conversation again, almost a year later to the day so that we can have a conversation of what it means for the technology ecosystem and narrative in India in this podcast.

KSV: Nitika once again. Good seeing you.

Nitika Goel: KSV, we had this conversation almost to the date a year ago. Right? So I’m going to ask you, you mentioned a few things which I’m going to bring up in this podcast. But if you had to summarize 2023 from a GCC lens, what would it be?

KSV: It’s a good question. I will put it in five different buckets. The first bucket in terms of importance is that increased trust.
People are now entrusting more with global roles coming in. The data that Zinnov and nasscom together produce currently we added about 5000 and aspirational go to 20,000 new global roles coming. So there is an increased trust on the capabilities of the capability center.
Number two, which in my mind, the slowly the narrative is changing to truly globalization. And I would say the disappearance of the word, us and them. It is emerging more, a world of oneness. There’s one global processes, global team, global aspirations, everything is being one. And perhaps, over period of time, the word GCC as a model itself will extend and then different avatar of global enterprises will come, is the second one.
Third is, interestingly, increasing usage of data, drawing, insights, et cetera, leading to different kinds of newer roles and newer titles coming up. I was very happy to see some of the roles like Chief Customer Officer, Chief Growth Officer is all coming up in into the country here. And all of this is happening because of overall capabilities of the leaders to go beyond order taking has taken place. So if I had to summarize it from an overall GCC lens perspective, we have certainly moved from being an back office to the world, to the mid office of the world, fastly approaching the front office of the world in the operations side.

We are truly moving away from being in all of them in terms of talent development center to become an innovation center for the parent enterprises. And in all of them, thanks to many things that’s happening simultaneously in India, digitization, etc. in principle, the can-do attitude, terrifically has gone up.
So I would say this is a big shift in 2023 has gone through, in terms of the way and shape of things is going.

Nitika Goel: I love how you brought that up. In the last conversation we had, you mentioned that India is talent rich, but not leadership rich. Would you take your words back today?

KSV: No, no, no. I won’t say that. We are still evolving. We’re still evolving for scalable talent. India continues to be a huge place for people to come and experiment and play with, etc. Now, on the leadership side, lots has evolved. As I said, the confidence and trust people have in terms of entrusting more, asking them, demanding more.
And the leadership also stepped up to put across. Are we in the S curve of maturity for leadership? Perhaps not. Are we in the growing part of the S curve? Certainly yes. And I would say we continue to be a scalable talent rich, leadership development. Perhaps in next two to three years time, this model will completely change.
We’ll be leadership ready, talent ready. And of course, in terms of impact, what was earlier 5X impact, of course, will reach back that 5X impact because of leadership and capabilities.

Nitika Goel: I think that’s a great point. I’m also going back to your first response, right? One thing you said, there’s a global cohesion or a oneness, if you will. But on the other side, we’re seeing escalations of war. We’re seeing a lot more privacy and data protection bills emerging. We’re seeing a lot more locuses of control being defined in different regions, right? Do you think that it may be a blind spot for us as we are growing here, that are we taking and putting in the steps to manage all of these things that are also coming into play in parallel?

KSV: Interesting question, Nitika, because again, as we said, we’re in the perhaps the fourth generation of GCC evolution as a country from being an earlier portfolio hub. We are also moving to a leadership development hub, which is taking place. As we pointed out in our landscape report in 2023, this has come out as very, very strongly, but look at the way the global enterprise is saying, I agree with you, there isn’t data privacy. There’s a data localization. All these issues are real.
There’s opportunity for AI adoption. Embedding AI is real. But now global enterprises are not seeing that is it an headquarter issue to be done, or perhaps 8000 miles away being done. So you saw several leaders today managing multiple teams across geographies.
Perhaps Mexico, perhaps Romania, perhaps focused on Eastern Europe, Vietnam, etc. Process being the same. So this is all evolving leadership on which everything is today is being seen. In the past, the question used to be, what will India do it? Now they say, what else can India do? That change of conversation is rapidly changing.
And we are, as I say, always the best is yet to come.

Nitika Goel: That’s a really interesting and fascinating point of view that you brought up. It’s also so, like you very rightly said, we are now extended organizations, right?

KSV: I would love to avoid using the word extended. We are one of the interesting thing is the conversation that from India is disappearing. From India is gone. It is an extension of that extended enterprise concept, we are now being seen part of the enterprise.

Nitika Goel: So we are just an enterprise in a different location. That’s right, right, right. But now that’s also that’s a very interesting observation, right? Because one thing that we’ve seen with leadership itself now, since it’s an enterprise in a different location, the leader who is there is the leader who is there. So we are also seeing, say for example, the Chief Customer Officer role that we saw is no longer being relocated to the headquarter or erstwhile headquarter location, but really based out of the location where they have the highest concentration of talent, which will serve the most good to serve the best outcome for the organization.

KSV: Very interesting you said that. One of the large financial GCC, they have a overall technology wing, right? Technology arm, sizable people in the technology arm focused on, say, wholesale banking, investment banking, corporate banking, retail banking, etc. And they’re mapping the life cycle of a customer. The customer is the same, holding your savings bank account, is also holding an investment account, is also the leader in his organizational corporate account, is perhaps a high net worth individual, etc. In saying, how can I leverage the collective capability of technology to get a 360 degree view of a customer and that aspect, whether it’s a banking industry or a retail industry or a healthcare industry, you name it. That profile of engaging with the customer, changing the customer is changing because of what they experience, the collective capability of an office where all the pieces of things are together. That is changing the game completely.

Nitika Goel: Correct. And I think that is the natural evolution. So when we’re talking about evolution, India historically was known for its IT services prowess and GCCs was like the poor relative, if you will, or a growing, upcoming field, right? Right now, that seems to have completely flipped. We are right now hearing it’s the rise of the GCCs. It’s like a phoenix. We have come from the ashes and then some. So I’d love to understand are they really eroding into the share of IT services companies or technology services companies, or is this just something propelled by media and things like that, but it doesn’t really exist?

KSV: Again, I see three broad trends. In the past, what was core and what was not core, the core was very small core itself has now expanded. Core expanding is one. So what is non core is also expanding and what is core is also expanding. So what was non core which was very small, it was now expanding. People are continuing to go with the third party, right?
What I call them as technology enablers. And the few are business enablers, for example, in a healthcare space, the business enabler could be a medical research, pharmacology research could be say, a drug regulation, applications, et cetera, for example, compliance, et cetera. All these things, which is technology enabler and say the business enabler. Business enabler in the past was perceived that it cannot be done outside of home country, home office, that paradigm has got shifted.

Okay. Now, that paradigm shift, more and more engineering, more and more digital, more and more R&D, what was otherwise considered core to be done in the country is getting to a GCC model, right? And what is technology enablement, just small, which is also expanding in terms of data insights is also going on. And the good news is because many of the set of the GCCs, they are truly able to visualize the globalization that we spoke about in a real sense, right? Part of the leader in location X, part of the job functions in location Y, part of the capabilities in location Z, all interplaying together. That model was largely with the service providers models earlier. And they’re also now relooking and the true word of globalization, what they could do to improve so that the pies together growing, not at the expense of one another, correct?
It’s not a zero sum game at all. But if either of this angle we have to take a drumbeat and say that, I have arrived, these things are now easy, no. We are falsely mistaken.

Nitika Goel: Correct. I think now it’s an inflection point. Everybody has to figure out how to re strategize based on this new normal.
This is a new normal. And I think everybody has to accept that. Now you talked about it very interestingly, coming back to it. Services companies have a vast talent pool, like we talked about the talent richness of India, right, and now I’ll bring in the construct of Generative AI.
There is an implicit fear, if you will, in the ecosystem that it will lead to an erosion of jobs. Is there a necessity for it to be so talent rich? In that case, will the entire narrative and the technology narrative of India evolve?

KSV: Very interesting. I need to take an anecdotal experience, not experience, something to share with you.
When the first elevators came, first elevators came perhaps 100 years back, 100 years back, it was just a structure on which people will pull the thread, pull the thread and lift you up, lift you up. And for any reason, if the rope were to be broken, you’re gone. Surely, you’re gone completely. Then subsequently OTIS, as a person demonstrated in so pulling that the rope, he created its own and he started proving that it is safe. It is safe. And people started using the elevator. So though, uh, so that the fear could be removed. Then in New York, somewhere in 1830s, 1830, there’s was a massive strike, massive strike by all the elevator operators, all the elevator operators and the people who are otherwise working skyscrapers had two options. Climb up 15 floors, 18 floors, walk it up or take the elevator. And believe it or not, they all took the elevator, went up.

And after that, the role for an attendant elevator got removed. The fear of technology when that vanishes, people accept it. We have fear of exercise. In that case, then it was that fear of technology saying that what happens to me if the operator is not there, when they suddenly realized that 100,000 people operate went on strike, they’re permanently on strike, the business continued.
In my own way, the way I look at this, while what is happening is if you position Gen AI or AI as a purely technology tool, sophisticated, complicated, etc. it has got a different implication. The moment you put this as an assistive tool, that is usable by anybody, everyone, you’ll find different ways of doing it.
So, for example, uh, in many segments, you look at from an India perspective, for instance, in the past, in the Western world, it was always mentioned as innovation at the top, for the top. And created down below for everybody to adopt it. We just flipped it around. We just flipped it around. It’s innovation using technology at the bottom, and everybody’s gaining out of it.
So, here I’m saying this, Nitika, very interesting point you brought out. From an AI perspective, AI perspective, the way it could be deployed for, say, million education that could be imparted, skilling could be imparted. Perhaps in healthcare, the way we demonstrated with our vaccination plan, leveraging technology, perhaps, can this technology be leveraged here for larger L STAR getting done, manufacturing space, generating AI space, generating engineering space, the way it is going to see, it is just going to increase the productivity and thereby creating more opportunities is the way to look at.
In my personal opinion, it is too early to say that Gen AIs perhaps can create a job scarcity. I am of the strong view it will increase productivity, generate new kinds of jobs, which is perhaps not visible right now to us.

Nitika Goel: I couldn’t agree more. I can even talk about my own function, right? Marketing and Sales itself is probably one of the most disrupted functions as a result of Gen AI. And you’re very right. It’s a productivity enhancer. It is a context creator. It is a proficiency enhancer. Today, something that would have taken me hours to learn. I can do in a fraction of minutes, right? So we’re doing that ourselves and we’re seeing a lot more. And like you said, change I think is hard, but just doing it in the right way where it is not seeming threatening.

KSV: That is right. If you can keep demystifying, keep demystifying. and that is perhaps is what there are several GenAI platforms like Open AI. And others are doing is making it simple. Making it simple and taking the fear out of it. That will be a good score for us to move ahead.

Nitika Goel: I agree. I think you beautifully summarized it by calling it democratization, really, of technology. And I think people have not had access to it so simply I think, till before the internet. That’s right. And maybe that would be another example that comes to mind.

KSV: There are several examples, Nitika. Thank you. Trace back, my own industry, we had similar opportunity challenges and fear in 1994, 1995, when the ERP as a stuff was coming down to India, ERP as a thing coming to India. So people say, what happened? India is a labor rich country, etc, etc. Just look at the way it is now. Even look at the digital public infrastructure as a platform. Despite every fear expressed, it is now proven it is contributing to 1 percent of our GDP because of digital public infrastructure. Everything is going to be economically beneficial as we adopt more and more technology, including ones like Gen AI and AI.

Nitika Goel: Couldn’t agree more. I’m very excited to see the possibilities of what will happen. So, we’ve talked about a bunch of things, right? We’ve talked about talent. We’ve talked about leadership. We talked about technology. We talked about structure. We talked about other ecosystem players. I will ask you, what do you foresee in 2024 for GCCs in terms of, across different levers? These levers that we talked about, and even what is the role of the community itself that is one?

KSV: It’s a good question, Nitika. I think it’s a very valid question. You know, as I said, when the whole journey of GCC perhaps started in early 2000, uh, a 5x impact was expected, was expected and it was driven. 5x impact was also given. Over a period of time, I do not know why, perhaps rightly so, we are now generating 3x impact, a 3x impact.

I would say by 2024-25, it is time again to go back to the 4x and 5x impact, driven by automation, driven by the alternate leadership that we talked about, driven by capability. Look at customer data first, insights of the customer first driven by moving more towards the front office and that intelligent product design that is coming in. All of them put together is going to put that – I will use the word – pressure on us. An opportunity for us to excel, to go back to that 4x and 5x impact, what we are otherwise known for beyond talent, cost and location, cost and advantage.

Nitika Goel: Awesome. Now, I think that’s very interesting, but I’m going to also put you in a spot and ask you, what’s the ready reckoners for us to thrive, but what are the roadblocks and points of friction?

KSV: You know, I tell you what I foresee. In a positive sense as, Debjani Ghosh has called it out, I completely endorse it that from an incredible India become inevitable India. So to the extent anything and everything that is happening in a global perspective, there is a touch of India. What we do is going to be significantly visible.
Having said that, if what I fear is, today, there’s a strong line that is dividing the can do attitude that we have demonstrated into perhaps getting into a zone of arrogance, right? Or losing out your humility, right? In my opinion, I think as, as a country for last 25 years, 30 years, we’ve demonstrated that despite all technology successes, the core humility that we have as individuals, as a contributor has not diminished. We should ensure that that doesn’t happen. The reason I’m saying this is while this the flow is unstoppable, right? perhaps the overconfidence should not overshadow our over confidence. That is the only second thing I have.

And the third is in every, the parameters to start assuming. Start assuming the ecosystem that we have arrived at the best. There’s no scope for further improvement could be a constant challenge, we had to keep driving that. Strictly speaking from 2010 onward, there was no need for GCC model to have innovated because we were established was coming in and it moved in. In 2015 when the digitization took place again as a country innovated, we innovated again in 2020 this question was not asked. It was again that what is in 2025, you are again asking the same question. What is in 2030? It is good.

We are an unstoppable run. The question is, can we keep leveraging the opportunity, fix the problem that we have, move ahead, move ahead. For example, people often have said there is little participation of academia as an ecosystem in our development. I would fully not agree because if they also develop the way it is, it is much more. Everyone is now realizing the power of technology, power of India GCC, the power of AI capabilities, and everybody strongly believes this is our movement is for us to fail. And I’m sure we’ll not fail.

Nitika Goel: Absolutely. Love how you said that. The other question I’m just going to come back to is a rapid fire. Yeah. Okay. The one piece of advice you will give to high, very high mature companies in India, apart from being, having hubris and over confidence.

KSV: Is that continue, invest on leadership. Leadership is the decider for the future. Invest, invest, invest on leadership.

Nitika Goel: Your piece of advice for companies who are newly set up in India.

KSV: High aspirations. Demonstrate high aspiration. You as a leader have to demonstrate your leadership team the aspiration that you bring to the table. Learn from the experience what others have gone through. Don’t be a doer.

Nitika Goel: Got it. The third thing is for companies that have been in India for a while, but have been slow to adopt or be aspirational.

KSV: Be part of the ecosystem. Be part of the ecosystem. Many GCCs, many players were in this journey are learning from each other in this journey. And the good GCC India is very strong. They’re willing to help each other. Here is an opportunity for you to be part of this ecosystem and experience the learning and growth.

Nitika Goel: You know, I think that’s a beautiful thought that you said because it’s a sense of community. I think our culture is very community driven and I think that reflects in the GCC ecosystem as well and the willingness to help. I’ve been a part of it for maybe 15 years and I experience it every day. Even with you KSV, we are like on speed dial with each other as you know. So thank you for your time KSV. As always, it has been an incredible conversation. One thing that I have been left with, it is we’re talent rich, we’re heading towards being leadership rich.
We have to go from being 3x terms of thinking and value creation. But more importantly, it’s not just about an incredible India, but really the inevitable India. So thank you so much for watching this edition and we hope for you to join us in other podcasts as well.

KSV: Thank you all.

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