IT companies set up dedicated GCC Strategic Business Units as demand booms

Information technology (IT) companies are increasingly establishing dedicated Global Capability Centre (GCC) Strategic Business Units (SBUs) to capitalise on the surge in demand.

Industry experts highlight that rather than missing out on the opportunity presented by the GCC boom, IT firms are aggressively positioning themselves to serve the demand.

“All the IT companies have set up dedicated GCC SBUs. The setting up of GCCs is kind of a loss of business for IT service providers, which is why they decided to go ahead and set up this unit,” said Shalini Pillay, Leader, GCC, KPMG.

A GCC is a dedicated offshore unit established by a company in a foreign country to in-source IT and related business functions. IT service providers are responding by integrating these centres into their operations and ensuring they remain relevant and competitive in a dynamic market, experts said.

The development comes at a time when the GCC sector is poised to grow exponentially in the coming years. India's Economic Survey 2024 showed that GCCs will contribute roughly 3.5 percent to India’s GDP by 2030, generating an estimated revenue of $121 billion by then.

Paul Jeruchimowitz, Senior Managing Director, Accenture Strategy, said that the company offers its expertise from strategy, consulting, technology, and operations to build and enable talent for organisations pursuing a GCC strategy.

“To succeed in the next decade, organisations need to reinvent every part of their enterprise with technology, data, and AI—and access, unlock, and create great talent,” Jeruchimowitz told Moneycontrol.

Accenture's investment in ANSR

In an unprecedented move, Accenture announced an investment in ANSR on July 26, aimed at helping clients design, set up, and optimise global teams for technology and business functions. The amount infused by Accenture stands close to $170 million (approximately Rs 1,400 crore), according to sources.

ANSR helps companies build, manage, and scale GCCs.

As part of the agreement, Accenture's North American Chief Executive Officer Manish Sharma will join the ANSR board of directors.

Experts say more such investments could follow by IT companies.

Also read: Revenue of ER&D GCCs grows over 30% to $25 billion in India

Modus operandi

“These teams deliver value by accelerating product development and swiftly accessing a skilled workforce proficient in cutting-edge technologies,” said Krishna Vij, Business Head, IT Staffing at TeamLease Digital. She added that these dedicated units improve alignment with the GCC’s corporate strategies and expedite decision-making by centralising processes.

Many large IT companies have also already established GCC teams focused on key industry verticals, such as banking, financial services, software, telecom, etc. These centres will implement digital capabilities, automation, and developing competencies in AI and Machine Learning (ML).

Jeruchimowitz further highlighted that Accenture’s approach involves a hybrid model that expands access to digital-first talent at scale while offering customised solutions to clients in their GCC journey.

Pillay said that even management consulting firms are providing services to companies to set up their GCCs, and not just IT companies. GCCs are being used by companies to reduce dependence on vendors, she explained.

Expansion models

India’s third-largest IT services company HCLTech, which has been working with GCCs since 2012, has also recognised the potential of this industry segment early on.

A spokesperson from HCLTech told Moneycontrol that the company offers multiple engagement models for GCCs, like Workforce Deployment, Build, Own, Operate and Transfer (BOOT/BOT) model, Strategic Joint Ventures (JVs), and IP Partnerships.

However, the model varies with the maturity of the GCC, the spokesperson from HCLTech added.

“We see a potential demand surge in this segment. While the US and EMEA hold the lion’s share of the 1,600-odd GCCs in India, several APAC-based companies are also looking at India,” the spokesperson added.

Strategic capability services are gaining popularity and this is the direction in which the future is headed, with more strategic and transformation hubs expected to emerge by the end of this decade, experts said.

“Almost all of them have GCC teams in some shape or form and activity is picking up speed, especially as interest in having in-house delivery capabilities in India increases,” said Hansa Iyengar, Senior Principal Analyst, Omdia Research.

Also read: GCC spree pushes up demand for data centres, enters list of top sectors