The Growing Significance of Global Competency Centers for Driving Technology Innovation and Competitiveness

By: Joy Abraham

Publish Date: February 21, 2024

Innovation is the most valuable asset that drives competitiveness and growth in the dynamic technology landscape. As organizations strive to navigate the complexities of digital transformation and take advantage of emerging technologies to their fullest potential, many are turning to Global Competency Centers ( GCCs, aka captive IT offshore centers) to drive innovation. These centers, which companies establish in foreign locations, particularly in countries like India, are becoming influential hubs for driving IT innovation on a global scale.

According to a report by NASSCOM, India’s IT and business process management sector, which includes GCCs, is projected to reach $350 billion in revenue by 2025. [1]

The Rise of Captive IT Offshore Centers

GCCs are a strategic approach that companies use to access talent, resources, and expertise outside their home countries. The parent company owns and operates these centers and acts as extensions of the organization’s capabilities. They focus on various functions such as software development, IT support, research and development, and more.

There are various reasons for this shift in responsibility. More mature captive centers have proven their reliability in service delivery and even successfully implemented pilot projects in digital transformation.

Top Three Destinations for GCCs other than India

  1. Philippines: The Philippines is a hub for BPO services, especially in support, back-office functions, and customer service. The country has a highly educated workforce with excellent English language skills and cultural alignment with Western countries.
  2. Eastern Europe: Skilled professionals in IT, engineering, and design are readily available in Eastern Europe, which includes countries such as Poland, Hungary, Ukraine, Romania, and Bulgaria. Additionally, Eastern Europe provides cost benefits, has good infrastructure, and is geographically close to Western Europe.
  3. China: China is a destination for outsourcing due to the availability of skilled resources at lower costs. However, organizations have to deal with high costs, issues related to intellectual property protection, and political tensions. On the other hand, India provides better language skills, cultural understanding, democratic governance, and digital proficiency.

Driving IT Innovation: The GCC Advantage

Access to Diverse Talent: GCCs provide companies with access to a diverse pool of skilled professionals with expertise in cutting-edge technologies and industry-specific domains. Organizations can infuse fresh perspectives and drive innovative solutions by leveraging talent worldwide. This access to diverse talent enables companies to tap into a broader range of knowledge and experience, ultimately leading to enhanced business outcomes.

Collaborative Environment: GCCs foster collaborative environments that encourage knowledge sharing, cross-functional collaboration, and idea generation. By bringing together experts from different backgrounds and cultures, these centers create fertile ground for innovation to thrive.

Focus on Specialized Solutions:  GCCs allow organizations to focus on developing specialized solutions tailored to their unique business needs. By aligning closely with the parent company’s objectives and requirements, these centers can drive innovation directly, addressing strategic challenges and opportunities.

Agility and Flexibility: GCCs provide the agility and flexibility to adapt to rapidly changing market dynamics and technology trends. These centers can quickly capitalize on emerging opportunities and address evolving customer demands by staying agile and responsive.

How will YASH help GCCs accelerate their focus on Digital Transformation?

YASH is a leading service provider that helps GCCs with various innovative and well-organized solutions. As a trusted strategic partner, we use tailored engagement models to help GCCs achieve their transformation goals with confidence. Our expertise lies in strategizing and executing global digitalization initiatives, simplifying processes to achieve modernity, agility, and simplicity, enhancing capabilities and knowledge, and facilitating technology evaluation and adoption. We also promote a culture of innovation, continuous improvement, and operational efficiencies while ensuring cost optimization and delivering tangible results. For more information, reach out to us at info@yash.com