GICs in India: Then and Now

The GIC story in India continues on its growth path – a segment that started out as an afterthought to facilitate lower cost has now emerged as an imperative. In the process, it has become a key segment of India’s IT-BPM industry in terms of revenue & employment generated and its value addition to the parent firm.

Given this segment’s growing significance, NASSCOM, jointly with Zinnov Consulting, conducted a detailed survey of GICs in India and have recently published a report titled “GICs in India: Getting Ready for the Digital Wave”.

In Part-I of this blog below, I am listing the key findings:

 

FY2010

FY2015

Growth

Number of GICs

750

1,025

~1.4X

Revenue (USD billion)

11.5

19.4

~1.7X

Employees (’000 nos.)

425

745

~1.7X

Median size of GIC (no. of employees)

575

870

~1.5X

GICs in India today number nearly 1,025 versus ~750 in FY2010. Revenue generated by GICs has gone up 1.7X to cross USD 19 billion (20 per cent share of IT-BPM exports) and this segment currently employees >25 per cent of the industry workforce (export employees).

  • ER&D/SPD is the largest segment both in terms of number of GICs (59 per cent) and revenue share (52 per cent)
  • While software/internet vertical ranks No. 1 in terms of number of GICs and employees, BFSI GICs have a 6 per cent share (number of GICs) but account for 24 per cent share of employees
  • North America and Europe-headquartered GICs account for >90 per cent of GICs in India
  • Tier II cities like Ahmedabad, Coimbatore, Vadodara, etc. emerging as GIC centres due to reasons such as proximity to manufacturing facility and access to niche or low cost talent

Trends:

  1. For GICs in India, the growth journey has shifted gears to higher value add – increase scope of services, high complexity projects, IP creation, building competency & delivery efficiency – and thereby contributing to the top-line
  2. As a result of this expanding scope, GICs are evolving from single-function to multi-function centres, local to global governance, delivery focused to business result focus leading to an increasingly accountability driven model
  3. India is rapidly becoming the power-centre for MNCs – for many MNCs, the India centre is the largest GIC outside the HQ location
  4. Providing scale – Leading MNCs have >35% of technology workforce operating out of the India centre
  5. CoEs: Parent firms are looking to their India GICs as CoEs across markets, competencies and strategic factors; India is currently home to >100 CoEs across verticals
  6. Ecosystem partnerships: With academia through sponsored infrastructure (labs), training & curriculum design, sponsored/fundamental research, consulting, etc. GICs also looking to India’s startup landscape for new business opportunities, innovation, etc. – through Partnerships, Intrapreneurships/Accelerator programs, Funding programs, etc.
  7. Digitisation: India has emerged as the 2nd largest destination (after the US) to setup a centre for digital transformation

In the second part of this blog, I will highlight how GICs are enabling digital transformation for their parent firms.

You can purchase the report here: GICs in India: Getting Ready for the Digital Wave

Download the free Executive Summary

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