Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

Extensive experience has been acquired in the Global Capability Center (GCC) industry, focusing on leadership content development, peer benchmarking, and GCC maturity assessments for multinational clients. Expertise has been demonstrated in managing GCC platform operations, including client query resolution, stakeholder presentations, and strategic research on emerging technologies and talent landscapes.

Capability to assess, market insight, project management, and thought leadership have helped improve GCC operations, innovation plans, and cost benchmarking research. Leadership has been offered in database development programs and analyst communities, improving strategic business decisions and operational effectiveness within the GCC ecosystem.

Previous responsibilities have included specialization in GCC platform management, involvement in client query resolution, stakeholder presentations, and location/talent analysis for leading multinational corporations, and contributions to thought leadership, emerging technology research, and benchmarking studies, supporting the evaluation of over 200 GCCs and reinforcing the industry's evolution.

 

Q2. What is the current market size of the GCC/GBS sector globally, and how is it expected to evolve over the next 3-5 years?

The global business services market is poised for extraordinary growth, with a projected Compound Annual Growth Rate (CAGR) of 21% from 2023 to 2032. The market was valued at $203.7 billion and is expected to soar to an impressive $13.8 trillion by 2032. This surge
reflects the increasing reliance on business services to drive efficiency and innovation across industries.

The Global Capability Centers (GCC) and Global Business Services (GBS) sector is also experiencing significant expansion in India. Currently valued at $64.6 billion, this market is projected to exceed $110 billion by 2030. 

This expansion underscores India's central position in the international business services sector, fueled byits talented labor force and strong technological base.
The future of business services, both internationally and in India, is extremely bright, with enormous scope for innovation and growth.

 

Q3. How are GCCs integrating Generative AI into their service models, and what future innovations are expected in this space?

GCCs are swiftly embedding Generative AI (GenAI) in their service offerings, reshaping business functions in many sectors. More than 70% of Indian GCCs have already emphasized GenAI, with important focus areas being customer experience (69%), operations (57%), and IT/cybersecurity (47%). Outside of these, GCCs are applying AI in finance, HR, sales, and marketing to aid in better decision-making, streamline processes, and boost efficiency.

Key applications of GenAI in GCCs include:

Customer Experience: AI-driven chatbots, sentiment analysis, and hyper-personalized support

Operations & IT: Intelligent automation, predictive maintenance, and cybersecurity threat detection

Finance & HR: AI-assisted financial analysis, automated reporting, talent acquisition, and employee engagement tools

Data & Analytics: AI-powered insights, advanced forecasting, and real-time business intelligence

Future Innovations & Trends

Total Enterprise Reinvention (TER): GCCs will evolve from cost centers to strategic AI-powered reinvention hubs, leading digital transformation efforts

AI-Enabled Secure Digital Core: Companies are building integrated AI architectures to manage unstructured and synthetic data, ensuring seamless AI adoption

Responsible AI Implementation: Addressing challenges like bias, compliance, and data security will be key to scalable and ethical AI deployment

AI-Powered Low-Code & No-Code Platforms: GenAI will simplify software development, enabling non-technical teams to create applications with minimal coding

AI-Driven Mega-Processes: Companies are restructuring entire value chains using GenAI for systemic transformation instead of siloed improvements

Challenges & Considerations

While GenAI holds out promise, GCCs must deal with the obstacles of regulatory complexity, data inconsistency, privacy issues, and integration with legacy systems. Overcoming these will be essential to continued AI-fueled growth.

In short, GCCs are not only embracing GenAI but driving enterprise-wide change.

With their broad domain knowledge and exposure to digital skills, they will be vital in driving mass adoption of AI and reshaping business strategies at a global scale.

Example: Target's GenAI-Powered Innovation

Target's GCC in Bengaluru is driving AI-led innovation despite having no physical stores in India. A key project, the price transparency initiative, leveraged GenAI to compute billions of prices in real-time, enhancing affordability and customer trust. Additionally, the Store Companion chatbot improves employee efficiency, while GenAI-powered Guided Search on Target.com enables intuitive, natural-language searches. These initiatives showcase how GCCs are transforming global retail through AI-driven solutions.

 

Q4. Which industries (fintech, health tech, automotive tech) are predicted to drive the next wave of GCC growth, and why?

The industries predicted to drive the next wave of GCC growth in India include:

Technology and Digital Services: AI, data science, cloud computing, and cybersecurity are key growth drivers, with many GCCs investing in innovation and automation. India's skilled workforce and thriving start-up ecosystem provide an ideal environment for GCCs to develop advanced digital solutions.

Life Sciences and Healthcare (LSHC): The sector is expanding rapidly, particularly in Hyderabad and Bengaluru. It focuses on R&D, drug discovery, digital health, and AI-driven analytics. Hyderabad has emerged as a "Healthcare Hub" due to government support, infrastructure investments, and a growing pool of biotech and pharmaceutical companies.

Banking, Financial Services, and Insurance (BFSI): BFSI GCCs have evolved from back-office support to strategic hubs leveraging AI, blockchain, and regulatory compliance to drive innovation. The sector benefits from India's talent pool, cost efficiencies, and expertise in risk management, tax reporting, and regulatory compliance.

Engineering and Manufacturing: Industry 4.0 advancements, including digital engineering, automation, and robotics, are fueling GCC growth in Chennai and Pune. These cities are becoming major hubs due to their strong industrial base, skilled workforce, and increasing adoption of smart manufacturing technologies.

Retail and Consumer Goods: Companies are using GCCs to enhance customer experience, supply chain management, and digital transformation initiatives. GCCs in India are supporting global retailers with AI-powered insights, demand forecasting, and omnichannel strategies.

Automotive & Mobility: The rise of Electric Vehicles (EVs), autonomous driving, and connected mobility solutions is prompting global automotive companies to set up GCCs in India. The country's expertise in AI, IoT, and software-defined vehicles is helping drive R&D, smart manufacturing, and supply chain innovation.

Telecommunications & Media: The growth of 5G, IoT, and digital content platforms is fueling the demand for GCCs with expertise in network optimization, AI-powered customer engagement, and cybersecurity. India's robust telecom infrastructure, cost benefits, and talent pool are attracting global telecom players to set up technology centers in the country

These sectors are tapping India's rich talent pool, robust digital infrastructure, and innovation ecosystem to achieve cost savings, improve operating capabilities, and create next-generation technologies.

 

Q5. Which emerging Tier-II and Tier-III cities in India are attracting GCC investments, and what factors (infrastructure, talent, cost) are driving this trend?

Emerging Tier-II and Tier-III cities in India attracting GCC investments include Coimbatore, Jaipur, Chandigarh, Vadodara, Kochi, Visakhapatnam, Nashik, Indore, Ahmedabad, Mysuru, Nagpur, Trivandrum, and Bhubaneshwar.

Key Factors Driving This Trend

Cost Advantages: Tier-II cities offer 10-35% lower cost of living than Tier-I cities, with real estate costs up to 60% lower, significantly reducing the Total Cost of Operations (TCO).

Example: Jaipur's commercial real estate costs are 60% lower than Bangalore, making it an attractive hub for companies like Metso, Pernod Ricard, and Flex, which have expanded operations there.

Talent Availability: These cities have strong educational institutions producing skilled graduates, with attrition rates 10-15% lower than Tier-I, ensuring a stable workforce.

Example: Coimbatore is emerging as an engineering and IT services hub, with companies like IBM and Accenture leveraging its local talent pool for high retention rates.

Government Incentives: The Indian government and various states offer tax breaks, subsidies, and SEZs (Special Economic Zones) to attract businesses.

Example: Tamil Nadu's ICT policy offers 10-25% additional capital subsidies for IT firms expanding into smaller districts, encouraging firms like Cognizant and Capgemini to set up operations in Coimbatore.

Union Budget 2025 Initiative: The Indian government announced a national framework to promote GCC expansion in Tier-II & III cities. This initiative focuses on enhancing talent availability, infrastructure, and industry collaboration, making these cities more attractive to global businesses.

Infrastructure Growth: Many Tier-II cities now have improved road networks, coworking spaces, and better air connectivity under initiatives like the UDAN scheme.

Example: Bhubaneshwar and Jaipur rank in the top five cities in India for mobility infrastructure, attracting IT and manufacturing GCCs.

Quality of Life: Cities like Ahmedabad, Surat, and Indore rank high in the Ease of Living Index, with better air quality, lower crime rates, and reduced congestion compared to Tier-I metros.

Example: Trivandrum, home to Technopark, India's first IT park, has world-class infrastructure and seamless connectivity to Tier-I cities and international destinations, making it an ideal GCC hub.

With the government's national framework for GCC growth and increasing investments, Tier-II and Tier-III cities are no longer just cost-effective alternatives but strategic hubs for innovation, talent development, and business expansion. The combination of lower operational costs, strong talent pipelines, government incentives, and improving infrastructure makes these cities key drivers of India's next wave of GCC growth. As global companies look to de-risk operations, enhance scalability, and tap into new talent pools, these emerging cities are set to play a transformational role in India's GCC landscape.

 

Q6. What innovations in service delivery models (e.g., platform-based, SaaS) are reshaping the GCC/GBS landscape?

Global Capability Centers (GCCs) and Global Business Services (GBS) are transforming through innovative service delivery models that enhance efficiency, scalability, and customer experience. Key innovations include:

Platform-Based Service Models: GCCs are increasingly using cloud-based platforms to provide integrated, scalable, and AI-driven services. These platforms enable seamless collaboration, real-time analytics, and end-to-end automation, allowing enterprises to optimize operations globally.

Software-as-a-Service (SaaS) Solutions: Many GCCs are adopting SaaS models to streamline business processes, reduce infrastructure costs, and enhance agility. This model supports the rapid deployment of services such as finance automation, HR solutions, and AI-powered customer support.

AI and Automation-Driven Operations: AI, robotic process automation (RPA), and machine learning are being integrated into service delivery to improve efficiency, decision-making, and predictive analytics. This enables GCCs to automate repetitive tasks, reduce costs, and improve service quality.

Best-Sourcing Approach: A mix of in-house capabilities and strategic outsourcing allows GCCs to balance efficiency and innovation. Companies are retaining high-value functions while outsourcing routine tasks to Managed Service Providers (MSPs), ensuring cost efficiency without compromising expertise.

Industry-Specific Innovations: GCCs are evolving into specialized innovation hubs across domains like healthcare, fintech, and engineering. For example, healthcare GCCs are integrating telemedicine platforms and AI-driven diagnostics, while BFSI GCCs are leveraging blockchain and digital banking solutions.

These innovations are driving scalability, cost optimization, and strategic transformation, making GCCs pivotal in global enterprise operations.

 

Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?

Investors evaluating Global Capability Centers (GCCs) and Global Business Services (GBS) should focus on key aspects shaping their long-term viability and competitiveness

Strategic Positioning & Growth: Companies must differentiate themselves through unique capabilities, value-added services, and expansion into Tier-II and Tier-III cities while evolving from cost-saving back-office functions to strategic business enablers

Financial & Operational Efficiency: It is essential to understand cost drivers, revenue distribution between traditional and advanced services, and strategies for long-term profitability, scalability, and sustainability

Technology & Innovation: The adoption of AI, automation, RPA, and cloud computing plays a crucial role in enhancing efficiency and service delivery. Companies must demonstrate strong investment strategies and a talent pipeline for emerging technologies

Talent & Workforce Management: Retaining and attracting skilled professionals amid rising attrition rates is critical. Companies should focus on upskilling, leadership diversity, and fostering an inclusive and agile work culture

Risk & Compliance: Organizations must address cybersecurity threats, regulatory compliance (GDPR, ISO, SOC 2), and geopolitical risks to ensure business continuity and data security.

A strong focus on emerging technologies, flexible service delivery, and long-term strategic vision will define a company's ability to create value, drive innovation, and sustain growth in the GCC/GBS space.