GICs in India
GICs in India: Summary No.1 ~1,050 ~22 USD bn >790k 21% KEY FACTS India - Global location for GICs GICs in India GIC revenue, Direct employees, Of new GICs globally set up in India KEY TRENDS GIC revenue - one-fifth of IT-BPM exports Increasingly, European, Japanese firms setting up GICs in India Majority of GICs focused on R&D and product development Business model shifting to transaction based Digital technologies next level of growth - mobility, analytics, cloud, digital payments, AI Digital disruption - need to build new service lines and processes
GICs: Key spoke in India s IT-BPM wheel 1.1 1.1 0.9 GIC market in India, USD billion IT BPM ER&D/SPD 3.0 FY2003 CAGR 16% 21.5 11.2 5.3 5.0 ~1,050 GICs present in India Revenue: 20 per cent share in total IT-BPM exports Employees: >26 per cent of total export employees 1.3 per cent relative to India s total GDP 150 FY2003 GIC employees, 000 nos. CAGR ~14% 800 ~240 new GICs set up since 2010 ~21 per cent of GICs set up globally are in India >52 per cent of these are focussed on engineering and R&D
GIC landscape: Cross-sectional presence Europe, Japan-More amenable to offshoring Tier II/III cities gaining traction 24% 17% 3% 1% 4% 4% 2% 1% FY2012 N. America 6% 11% 7% 3% 10% 10% FY2012 35% 43% Bengaluru 76% 68% Europe Japan APAC RoW 21% 14% 15% 24% Mumbai/Pune NCR Chennai Hyderabad Tier II/III India as R&D hub-increase in ER&D/SPD GICs 4% 6% One-third GICs employ bet. 200-1,000 people 14% 31% 43% 5% 5% FY2012 46% 59% Note: 100% = ~1,050 nos. (); 760+ (FY2012) ER&D/SPD Hybrids IT BPM 14% 8% 11% FY2012 21% 22% 53% 57% <200 200-500 500-1,000 >1,000
GICs in India: Increasing diversity SCALE 50% 79% Of global GICs in India Of global employees in India LOCATIONS GICs exploring Tier II/III locations like Ahmedabad, Coimbatore, Vadodara, due to proximity to manufacturing, access to niche or low cost talent, etc. Software GICs - >37 per cent of total BFSI leads in terms of employees median size of >850 people European, Japanese MNCs demonstrating higher inclination to setup GICs in India DIGITAL 40% GICs of Global 2000 firms enabling digitisation - mobility, analytics, cloud, digital payments, AI Driving digital-led transformation: o Smart automation, technology platforms o Advanced tools for operational excellence o Transformational approach to sourcing o Multi-channel integration MATURITY Newer GICs setup to bring in new capabilities to their global portfolio (beyond cost or scale) Enabling local market expansion for parent firm and managing strategic local partnerships Business models shifting from Cost plus' to 'Transaction based
GICs: Road Ahead DISRUPTION GIC likely to witness a decline in traditional annuity need to build new service lines GICs as R&D labs for creating new enterprise-wide digital processes Leverage start-ups for mobility solutions, BI, cyber security, customer experience, etc. BUSINESS MODELS Single-function GICs will expand into other functions; new centres will be setup as multi-function centres Emergence of hybrid pricing models Higher adoption of RPA emerging as a key operating model for GICs SKIILS Demand for niche talent - F&A (CAs), ER&D, analytics, etc. Set up CoEs for digital technologies (analytics, IoT, AI, etc.) Partner with niche players and platforms to quickly develop digital capabilities OPPORTUNITY ~80% of Global 2000 firms yet to leverage the India opportunity GICs to demonstrate their leadership role in enabling global enterprises to manage the transition in the digitisation era
NASSCOM GIC Council: 2015-16 The year gone by Identified Objectives Programs Outcome & Impact Continuously raise the ambition for value-add of GICs Help build the collective capabilities of GICs Build strong ecosystem and engaged community Establish India as the preferred destination for Global enterprises Contribute to development of the industry in India 7 Positioning GIC story from India GIC Conclave Innovation Stories Paper/ research on India as R&D destination Knowledge Share Session Regional leadership workshops on Talent, leadership, Value Creation, Innovation, Dev Ops & Business agility Visiting leaders programs Capacity Building GIC Connect programs Country councils SIGs for PEG/RPA Skilling initiatives for Analytics/Dev Ops Policy enablement Added 25 new GICs as members through Country councils, focused agenda German Country Council helped in Angela Merkel s program with content, partnership Tightly coupled membership with Country councils including expanding memberships, Startup engagement, innovation narratives...japan /Korea/ Germany Council Regional workshops helped creation of unique GIC Community with volunteered engagement Knowledge share sessions helped realization of opportunities and capabilities available in the eco system
NASSCOM GIC Council: Priorities for 2016-17 Vision: Enable GICs to provide enduring value to their enterprises Mission: 100% rise in Value Creation narratives Programs University Engagement Dev Ops & Business Agility Country Councils CXO Platform Activities GIC Connect programs Regional engagement SIGs- RPA, Dev Ops, BFSI, PEG Regional leadership series 8