Service Providers… and their Other Side

The experience that I have garnered over the last 10 months as an Independent Consultant for Pharma Global Capability Centres (GCCs) & Service Providers has not only given me a lot of insights into the thought process that goes behind establishing GCCs in India but also the other side of Service Providers which, like the far side of the moon, although equally rich, has never been exposed, explored & exploited to its fullest potential. If India today is looked upon as an ideal ecosystem for GCCs to flourish, it is thanks to these Service Providers who have enabled the growth of the skillsets & talent that the GCCs are happily lapping up. But whether this talent is being put to good use, is a debatable issue considering the fact that most people transition from Service Providers to GCCs attracted by the big brand names and a culture that is heavily tilted in the favour of employees, sometimes at the cost of customer service. In the midst of trying to copy the model of the west, GCCs tend to forget the core strategic reason of why they are situated in India – to utilize the talent better. But this very talent somehow loses its momentum after the switch and productivity suffers.

When transitioning their businesses to GCCs in India, Pharma companies usually have a tried & tested model in front of them which most, if not all, prefer to blindly follow. However, the so-called “tried & tested” models are the ones that everyone wants to show off & talk about to the whole world. What is important to hear though, are the things that are not being said. If you pay close attention to the untold side of the story, it can help you avoid the mistakes made by your predecessors. During the early days, GCCs rampantly poached resources from Service Providers and attempted to mould them into their attractive culture. Everyone was happy to jump over the fence – after all, life in a GCC is a far cry from the rigors of incessant toiling under the watchful scrutiny of a frugal client, isn’t it? Jumping over to a GCC from a Service Provider feels like finding an island of abundance after being adrift in a stormy sea. But as too much of everything is bad, once all your needs are satisfied, you will start searching for a meaningful purpose in your job, and if you don’t find it where you are, you will not hesitate to look for greener pastures and jump again.

Apart from this, the nature of work managed from GCCs as well as Service Providers, continues to be transaction-heavy for both. If parallels are drawn to compare service delivery through both the entities though, Service Providers will emerge as the faster & cheaper option. The philosophy behind the establishment of GCCs in India stems from a confluence of factors revolving around cost arbitrage, a skilled talent pool, government support and a strategic location from a time zone perspective. Over the years though, cost arbitrage, especially for senior roles, is not just diminishing, but in some cases, these roles are becoming even more expensive than their western counterparts.

Although GCCs are able to bring in top industry leaders in key positions, they are not able to unleash their full potential due to the inability of these leaders to scale up and have the headspace to understand global dynamics. Adding to this, the aggressive rate of career progression and the need to get promoted every other year contributes to a top-heavy and therefore highly unstable organizational structure. The number of team members reporting to a frontline leader is far lesser in a GCC compared to a Service Provider’s organization.

By filling in the gaps created by the GCCs, Service Providers have a tremendous opportunity to get back into the business that they are losing to the GCCs provided they develop the capability to take those tough decisions to make this work and provided they can shift their focus from short term gains & profits to long term advantages & exponential growth.

In many GCCs, most of the heavy lifting continues to be outsourced to Service Providers with only the coordination functions retained within the GCCs. This includes most of the IT services, major automations, deployment of ERP systems, artwork studios, omnichannel marketing agencies, and the like. At times, a lion’s share of the core value is added only by the Service Providers making it not so cost effective to retain the remaining bare minimum with in the GCCs who also enjoy the same benefits as their respective parent companies making them immune to certain lapses in performance that do not have any consequences associated with them. Therefore, while GCCs are definitely cost viable to some extent today, if their complete potential is not realized soon, their future existence could be doubtful.

Secondly, as far as GCCs are concerned, key decision-making authority remains with the power centre. While this is definitely changing with some high-profile global roles being transitioned to GCCs, a shift in the thought process to being accountable from just being responsible is certainly going to take some time to kick in. The decision-making process continues to be slow with a heavy reliance on the parent organization for conformity because the leadership ecosystem that understands this landscape is unfortunately in short supply.

Service Providers are much more heavily controlled by the organizations that they work for and are hence compelled to deliver against aggressive targets with penalties built in the contract if not met. They are therefore always on their toes. On the flip side, this also makes them highly customer centric. They need to be cost effective for their clients on the one hand with a comparatively lower operational budget on the other. This makes them extremely creative in the way they manage their resources especially considering high attrition rates.

In spite of it all, Service Providers continue to remain flexible, scalable and reliable because they know their customers too well, they have a wide spectrum of expertise and access to a volley of best practices considering that they cater to the needs of multiple clients and hence they can bring fresh perspectives & innovative solutions to the table. To avoid their existence becoming a temporary disruption, GCCs can actually learn a lot from Service Providers especially about core service delivery – first doing what is necessary & doing it well – before moving up the value chain and focusing on getting into global roles or high-end innovation.

Even with the evolution of the GCCs, Service Providers can thrive – by continuing their symbiotic collaboration with the GCCs and by establishing themselves as power houses offering distinct advantages in terms of cost, tailormade solutions to your unique problems and a proven track record of extreme adaptability & resilience. They should no longer project themselves as a back-office handling transactional activities but as partners offering domain expertise and the ability to be game changers for the organizations that they work for. Most of all, whether it’s a GCC or a Service Provider, knowing the real business & understanding its impact, knowing your real customers & understanding their wants and then going above & beyond to fulfil their needs & requirements is all that matters in the end.?

“The biggest thing stopping you from achieving an amazing Customer Experience is setting low expectations… and achieving them.” ― E.J. Kritz