GCCs are no more just staffing discussions, they are our customers: Tech Mahindra’s Jagdish Mitra

Jagdish Mitra, Head - India Business and Corporate Affairs, Tech Mahindra

The recent surge of global capability centres (GCCs) of multinational companies (MNCs) in India is driving demand as they are becoming customers for IT services companies like Tech Mahindra, contrary to the industrywide fear of GCCs taking away tech talent and business, said a top company executive.

These offshore units of MNCs are collaborating to leverage the domain expertise, services and technology portfolio of IT companies like Tech Mahindra that have over the years built the capability needed to run their operations.

The fact that 53 new GCCs were set up in India in 2023 alone, according to industry body Nasscom’s Strategic Review 2024, points to MNCs’ continued interest in GCCs in the country, and the talent to be found in India.

Speaking to Moneycontrol, Jagdish Mitra, head, India business and corporate affairs, Tech Mahindra and executive committee member of Nasscom, said, “The opportunity to collaborate is very high. There are certain skills that we are building within companies like Tech Mahindra—be it industry experience, expertise in certain platforms or domain areas—which has taken us a long time. And, therefore, that capability can easily be partnered with what the GCC is trying to do.”

This demand is coming despite a tough business environment and clients getting watchful of technology budgets.

Also read: Inside Tech Mahindra’s restructuring game plan

“For example, cloud migration is horizontal and has seen a significant amount of investment happening. We know what can be done in that area and there's a lot of partnership engagement going on,” Mitra said.

Within domain areas and verticals, manufacturing, niche work like factory-of-the-future type environmental solutions, telecom and certain areas of specialisation in banking are claiming a higher share of the demand from GCCs.

For Tech Mahindra itself, banking, manufacturing, healthcare and life sciences, and also travel are driving demand when it comes to verticals, and horizontally, cloud, engineering services, networks and user experience design services are bringing investments from GCC customers.

Moreover, competitive pricing has become secondary for these customers who are ready to pay for the expertise they are getting, said Mitra.

“People's discussions with us are significantly more about the capabilities we bring together than the price being asked, which is a very refreshing change,” he said.

Deals closing faster in India 

While discussing the demand outlook, Mitra shared that though deal closures are taking longer, it is happening faster in India than in the western countries for the IT services industry. There’s also a lot of buzz around new technologies like generative AI during customer conversations, he added.

“The (deal) closures are taking a little longer. In India, it is a little faster than the Western world… We've seen a lot of discussion around new technology being enabled, and people wanting to discuss how to deploy the latest state-of-the-art technology for their business, among many things, generative AI being one,” Mitra said.

He added, “We all know that generative AI has two roles to play. It will help in improving productivity, but it will also help in revenue generation. The fact that people are talking about revenue generation and looking at skills around data science is critical. The captives (GCCs) too are becoming more demanding. They're no longer just doing a staffing discussion, which we are happy about.”

According to Mitra, though decision-making is more prolonged than it was earlier, it’s not just a function of economics. Customers want to test out new technologies quickly.

“The good part is customers from both in India and abroad are ready to go ahead and get into commercial engagements, though they may be small in nature,” he said.

Tech Mahindra has taken a different approach to generative AI from its peers by developing its own large language model (LLM) ground-up. Project Indus, as it is termed, is currently in beta testing phase and is focused on building datasets of Indic languages including Hindi, Dongri, Kinnauri, Kangri, Chambeli, Garhwali, Kumaoni, Jaunsari, Bhojpuri, Maithili, and Magahi.

“We already have seen customer engagements for Indus, in terms of how to translate in real-time as you produce content in the media world or the entertainment world. How do you take that and multiply its reach on a real-time basis, that's where our platforms really come in handy,” he said.