India is considered the top location by MNCs for generating high-quality work in an efficient and cost-effective way according to the reports from NASSCOM. Over the past 20 years, GICs have flourished and gained in popularity in India. As more GICs are founded, the road to being a part of a global workforce and technical innovation is paved for top IT professionals in India. Top IT talent in India will have access to GICs as they gradually broaden their activities across sectors and create multiple opportunities.
Global In-house Centers in India provide a cost-effective, highly skilled, educated workforce, a favourable time zone, and supportive government policies, making it an ideal destination for multinational corporations looking to expand their global operations.
Despite the challenges posed by the pandemic, GICs in India have remained resilient and continue to be a favoured destination for multinational corporations. The Indian government has implemented various measures to support the IT industry and GICs, such as providing tax incentives, reducing regulatory burden, and facilitating infrastructure development.
In addition, GICs in India have adapted to the changing business environment by adopting remote work models, investing in digital transformation, and diversifying their service offerings. This has allowed them to remain competitive and continue to provide high-quality services to their clients. Overall, GICs in India are expected to continue to grow and play a significant role in the global economy, leveraging the country’s skilled workforce and favourable business environment.
Recessions can have mixed effects on global capability centers, which are typically offshored or outsourced operations centers that provide support services to multinational corporations. On the one hand, recessions can lead to cost-cutting measures by companies looking to reduce expenses, which can increase demand for outsourced services and drive growth for capability centers.
Additionally, companies may turn to global capability centers to access cost-effective talent in countries with lower talent costs.
Reduction in budget and workforce:
Cost arbitrage of multinational corporations has been a significant driver of the growth of capability centers in India. MNCs tend to lay off employees because of constraints on budget and expensive workforce in developed countries like the USA and European countries.
India has emerged as a preferred destination for these centers due to its large pool of skilled talent, lower talent costs, and stable business environment. Companies that establish capability centers in India can benefit from significant cost savings, with studies suggesting cost reductions of up to 70% compared to onshore operations.
Robust infrastructure and latest Technology stack:
Indian GICs have a robust technology infrastructure that can support complex operations of businesses. This includes high-speed internet connectivity, data centers, and cloud computing services, making it an attractive destination for companies looking to establish their GICs. Capability centers can provide a range of IT services, including software development, application management, infrastructure support, and data analytics, among others.
At Systems Plus we have employees skilled in over 150+ technologies.
Favourable government policies:
The Indian government has been supportive of foreign investments in the country, offering tax incentives and subsidies for setting up GICs. This has led to a conducive environment for businesses to operate in India.
“During this era of talent disruption, a proactive talent strategy is vital to weather the storm. Organizations must move beyond tactical approaches to technology talent and embrace a more strategic mindset.
The value generated by talent increases as the approach becomes more strategic. With talent accounting for 40-60% of an IT cost structure, failing to optimize IT talent means failing to optimize the IT budget.”
– Sapan Choksi
CEO, Systems Plus
The global recession has created challenges for businesses across industries. Many companies are struggling to maintain profitability and generate revenue, leading to increased pressure to cut costs and streamline operations.
The strategies that businesses can adopt to navigate the recession through Global In-house Centers (GICs) are:
India is a favorite destination for foreign players due to its focus on global efforts. An intercontinental mindset, proactive thinkers, and cutting-edge engineering capabilities are some of the other reasons why India is a top choice. India also has an advantage over nations like China because of traits like extensive English fluency, cultural adaptation, and alignment with MNC culture.
We as a GIC service provider are focusing on a few areas to develop:
As a GIC unit navigating through a recession-hit industry, it is important to stay proactive and adaptable to changing market conditions. While the current economic climate may present challenges, there are steps you can take to weather the storm and come out stronger on the other side.
First and foremost, it’s important to focus on cost optimization. This may involve finding ways to streamline operations, reduce unnecessary expenses, and leverage technology to improve efficiency. By controlling costs, you can improve your bottom line and increase your organization’s resilience in the face of economic volatility. In conclusion, while a recession can be a challenging time for businesses across industries, there are several strategies you can employ to navigate through the uncertainty and emerge stronger. By focusing on cost optimization, diversifying your services and offerings, investing in talent management, and staying informed about market trends and regulatory changes, you can position your organization for long-term success.