Why GICs Make Sense

We should be on the cloud! Why aren’t we using Blockchain? What kind of analysis and AI are we gathering from all the data that we are collecting today? Our competitors are using DevOps, we need to get there fast! These are some of the most common questions/ statements CIOs are grappling with today from their bosses. In fact, CIOs are under constant pressure to expand IT capabilities, but usually without the necessary budget.

Even if the budget was granted, usually the skills within the local market doesn’t exist and typically to get the maximum return out of these initiatives is to do it in-house. Otherwise all you are really doing is paying a partner to learn for you.

There is an alternative. Build a team in a country where both the skills are more plentiful and the costs are not as challenging. Enter the concept of the GIC. Usually GICs are set up in India, the Philippines or Eastern Europe primarily because access to a variety of skills that are difficult to find locally are more prevalent in these regions and because acquiring these skills is also more affordable here.

GICs make sense because they can be extremely strategic to your organization. Therefore, GICs should always be treated as an extension of the global organization. Furthermore, GICs can be leveraged in multiple ways, from driving innovation, building capability, enabling greater coverage (time zones) to simply helping optimize budgets.

Another great alternative to GICs especially for SME’s who can’t afford to have 1000+ people centres in foreign lands is a Managed GIC, sometimes also referred to as Managed Captive. Simply put a Managed GIC is a self-owned model that comes closest to giving you your own team, minus the logistical and legal headaches or the huge capital outflow to set it up.

Fundamentally it is an extended enterprise customized as per a client’s business needs with one hundred percent transparency and control. A GIC but without any of the administrative glitches that one would normally experience. The model ensures rapid on-boarding, 30+ percent in cost savings over traditional models, low attrition and zero transfer pricing issues.

To learn more about what a Managed GIC is or Managed Captive as its often called, click here. And remember both the GIC as well as the Managed GIC when viewed as a long-term initiative and not just a quick alternative to outsourcing, will an organization truly reap the benefits of this disruptive model.