A significant shift is underway in India’s $245 billion IT industry, as Global Capability Centers (GCCs), once perceived as competitors to Indian IT services firms, are now increasingly becoming strategic partners.
This evolving dynamic is reinforcing India’s position as a global hub for advanced technology and digital innovation, moving beyond traditional outsourcing models to embrace joint development, shared platforms, and collaborative business outcomes.
Industry leaders, including Infosys Chairman Nandan Nilekani and Coforge’s Madhusudan Hegde, highlight this transformation, emphasizing that GCCs are no longer merely rivals but crucial clients and collaborators. The focus of GCCs has expanded from merely achieving operational efficiencies to driving value creation and fostering innovation, effectively transitioning from captive centers to true capability and innovation hubs.
“Companies must approach GCCs from the standpoint of coexistence, collaboration and co-creation. GCCs as a mandate have shifted from operational efficiencies to value creation and innovation. What earlier used to be just a captive centre is now a capability centre, now shifting towards an innovation center,” Hegde said, adding that service providers like Coforge, among others, are still relevant to GCC heads.
“We see if we can bring accelerators, frameworks and differentiators to the GCC as Coforge. We evaluate their goals and see whether it’s AI, cloud modernization, product engineering or other emerging technologies. Aspirations have changed for GCC heads from the headquarters standpoint. We’re seeing a cultural shift in client organizations where they no longer view GCCs as separate entities but as integral parts of their core business. Service providers are increasingly seen as part of this connected ecosystem,” he said, adding clients find value in having service partners work alongside their GCCs.
Indian IT service providers are playing a vital role in this new paradigm. Companies like Coforge are offering specialized accelerators, frameworks, and differentiators to GCCs, assisting them in key areas such as Artificial Intelligence (AI) adoption, cloud modernization, and product engineering.
A prevalent and effective model facilitating these partnerships is the Build-Operate-Transfer (BOT) approach. In this model, service providers initially establish and manage a capability before seamlessly transitioning it over to the global capability centers. This collaborative approach is primarily driven by the mutual need for access to talent at scale, accelerated innovation, and reciprocal value creation.
Statistics reveal the depth of this collaboration, with over 60% of global capability centers having established dedicated innovation hubs to co-create with their IT partners, often employing hybrid “pod” models for integrated teams. This shift is leading to the formation of more integrated teams, shared digital laboratories, joint intellectual property (IP) development, and novel go-to-market strategies.
Ultimately, this new era of partnership is fostering innovation-led growth and enabling Indian IT firms to penetrate new industries and expand their global footprint.
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