Since Global In-House Centers or GICs emerged around two decades ago, these have become increasingly popular due to their ability to house diverse talent, provide robust infrastructure, and deliver support functions and other non-core jobs at affordable costs.
More and more multinational companies (MNCs) are now setting up Captive Centers or Global Centers of Excellence in developing countries like India, China, Malaysia, Philippines, Mexico, etc. to build new competencies, achieve sustainable growth, and move up the value chain.
Currently, there are more than 1,100 GICs in India employing close to 800,000 individuals. The revenue generated for GICs in India alone was $27 billion in 2017 and is projected to reach $350 billion by 2025.
Initially, these GICs hired talent and conducted non-core, routine jobs like in a Delivery Center.
But, with talent augmentation, digital disruption, and changing business priorities, the GICs have evolved into Global Innovation Centers to play an active role in helping their parent companies thrive in the digital age.
The Journey from Cost Centers to Innovation Hubs
In recent years, GICs have witnessed a remarkable transformation journey from cost centers to quality-focused innovation centers.
With the advent of a disruptive technological landscape and increasing business complexities, the GIC leaders have started to evolve their strategies and operating models to keep pace with innovation in the parent organization.
By leveraging end-to-end process knowledge and deep domain expertise, the Global In-House Centers are making a real impact in driving the critical value chain by building talent depth with new delivery models to generate the higher business value.
However, the path toward an innovation-driven digital journey is laden with challenges. Let us look at the key imperatives which organizations must follow to successfully transform their GICs into Global Innovation Centers.
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Build A Talent Hub
One of the most critical imperatives for innovation and digital transformation is to onboard the right talent for the job. By building a talent hub equipped with newer technologies and skills or strategy, the existing workforce can be upskilled or reskilled through collaboration, exporting the talent organization-wide.
One of the stepping stones to building a global talent hub is developing new products and solutions with a good innovation quotient. Therefore, for directly impacting the core of the business, investing in high-quality leadership capable of engaging employees in innovation activities is strongly recommended.
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Engage in Strategic Partnerships
GICs conduct non-core tasks to support the existing infrastructure of the parent organization. However, to remodel these Delivery Centers and transform them into Global Innovation Centers, application, infrastructure, and support services need to be outsourced to a specialized local partner.
Therefore, by revising GIC strategies and outsourcing non-core functions under fast-changing business circumstances, GIC leaders can pave the way for the innovation hubs to improve enterprise top and bottom lines.
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Ensure Business Accountability and Ownership
GICs must assume control over key enterprise priorities such as market sensing and customer-facing core functions and make strategic business decisions for improved outcomes.
With autonomy in business planning, GICs can open new avenues by migrating through the market and build new products and solutions that cater to local demand. This enhanced business accountability and ownership will transform them into innovation hubs while ensuring profitability for the parent organization.
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Embrace Digital IT, Automation & Analytics
In the present digital era, transforming traditional IT operations with digitalization is imperative for enhancing productivity. GICs should leverage data science capabilities to build an analytics center of excellence to provide a sustainable competitive advantage to the parent organization.
In addition, by leveraging automation, AI, cognitive analytics, and other new technologies, Global In-House Centers can remain at the forefront of excellence and make the necessary journey toward the transforming into innovation hubs.
The concept of idea generation has a broader meaning which includes aspects like understanding the needs of your targeted audience, studying your competitors, taking advantage of market gaps, and making predictions about your future market.
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Adopt An Innovative Platform
Once the talent hub is built, the non-core jobs are outsourced, and the right technology mindset is embraced, the final task is to set up the Global Innovation Center infrastructure within the existing premise. With the right platform for innovation,
organizations can transform their ways of working and embrace Agile best practices and DevOps paradigm for fast-tracking value creation through collaborative efforts.
For this purpose, organizations can partner with startups to jointly innovate and set up the in-house Innovation Center that will function as the enterprise got-to-destination to capture global demand.
Final Thoughts
There is no doubt that GICs have come a long way. From being mere cost savers to evolving in terms of strategy and innovation to provide sustainable growth to parent organizations and deliver value over time.
So, if you are looking to bring in fresh ideas, accelerate innovation, attract quality talent, drive employee engagement, and most importantly open up new revenue streams and business opportunities in your enterprise,
it’s time to explore ANSR’s Open Innovation offerings and team up with the leading corporate accelerators and global startup communities for transforming your “In-house Centers” into “Global Innovation Centers”.
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