India’s tech frontier faces growing pains. In the bustling tech hubs of India, from Bangalore to Mumbai, a quiet revolution has been unfolding. Global Capability Centres (GCCs), the offshore arms of multinational corporations, have become the backbone of India’s IT strength.
Yet, as these centers expand, they face several challenges that threaten to undermine their efficiency and growth potential. At the heart of the GCC struggle lies India’s notoriously weak infrastructure. Power outages and internet disruptions are not mere inconveniences; they are operational hazards.
The 2019 Mumbai blackout left several GCCs affected, exposing the vulnerabilities in their backup systems. Such incidents underscore the urgent need for robust infrastructure planning. In an era where data is invaluable, GCCs are sitting on veritable goldmines – and cybercriminals know it.
A few years ago, a major phishing attack on a large Indian IT company troubled the industry, serving as a stark reminder of the ever-present digital dangers. As these centers handle increasingly sensitive information, the imperative for cutting-edge cybersecurity measures has never been greater. India’s vast talent pool is both a blessing and a curse for GCCs.
While the country produces a steady stream of IT graduates, retaining top talent in emerging fields like AI and data analytics has become a difficult task. The IT sector’s ongoing battle with attrition rates is a testament to this industry-wide challenge. As GCCs grow, so do their pains. The rapid expansion by some well-known GCCs brought to light the scalability challenges that many centers face.
The ability to scale operations seamlessly is no longer a luxury but a necessity in the fast-paced digital landscape. With data protection laws evolving globally, GCCs find themselves navigating a complex regulatory labyrinth. A large Indian IT company’s GDPR compliance overhaul is just one example of the far-reaching impact of international regulations on Indian operations.
The coexistence of legacy systems with cutting-edge technologies creates a serious technological challenge. A Mumbai-based GCC’s struggle to integrate its legacy CRM with a new cloud-based ERP solution highlights the need for seamless technological integration. This diversity not only increases maintenance costs but also creates compatibility nightmares that can cripple operations.
Intellectual property protection in a country still grappling with enforcement mechanisms poses another significant challenge. An incident at a major pharmaceutical company in 2020, where confidential drug development data was stolen by hackers, serves as a cautionary tale for GCCs involved in R&D activities.
When global practices and expectations combine in India, cultural clashes are inevitable. Flipkart’s integration with Walmart highlighted the delicate balance GCCs must strike between local practices and global standards.
This cultural tightrope walk extends to technology adoption, where resistance to new tools can hamper productivity and innovation. Even the most advanced tech hubs face risks including natural hazards. The Chennai floods of 2015 were a reminder that GCCs must factor in environmental risks in their operational strategies.
These natural calamities not only disrupt operations but also expose vulnerabilities in disaster recovery plans. To navigate these turbulent waters, GCCs are adopting multi-pronged strategies. Investing in redundant power supplies and multiple ISPs can mitigate infrastructure risks. State-of-the-art cybersecurity measures, including advanced threat detection systems and regular security audits, are becoming the norm rather than the exception.
On the talent front, GCCs are enhancing their appeal by offering competitive salaries, continuous learning opportunities, and clear career progression paths. Partnerships with educational institutions are being forged to build a sustainable talent pipeline. To address scalability issues, GCCs are turning to cloud solutions that offer the flexibility to expand operations dynamically.
Engagement with local government bodies is helping streamline regulatory processes, while robust data protection frameworks are being built to comply with evolving data privacy laws. The technological diversity challenge is being tackled through rationalization of technology stacks and the use of middleware for interoperability. Rigorous IP rights management and enforcement strategies are being implemented to protect proprietary technologies.
As India cements its position as a global IT powerhouse, the success of GCCs will be pivotal. Addressing these challenges requires more than just technological solutions: it demands a holistic approach that encompasses infrastructure development, talent management, and adaptive governance.
The future of GCCs in India stands at a crossroads. Will they rise to meet these challenges, or will they be overwhelmed by the very forces that propelled their growth?
The answer lies in their ability to innovate, adapt, and persevere in the face of these issues. One thing seems clear: the GCCs that will thrive are those that view these challenges not as obstacles, but as opportunities to redefine the very essence of global collaboration in the digital age. The winners will be those who can turn India’s unique challenges into their competitive advantage.
(The author is Managing Partner at Desai & Diwanji; Views are personal)
