Unraveling the evolution of GIC/GCC and way forward … Episode 1

- by Rajesh Mohandas and Prashanth Kiran Rao

Indian IT Sector contribution to the GDP grew from 1.2% in 1998 to 7.7% today with 4.36 Million Employees, and according to NASSCOM the sector aggregated revenues of USD 180 billion in 2019.

IT industry’s revenue is estimated at around USD 191 billion in 2020, growing at 7.7 per cent y-o-y. It is estimated to reach USD 350 billion by 2025. Moreover, revenue from the digital segment is expected to form 38 per cent of the total industry revenue by 2025.

The dawn of Internet in 1998 marked the emergence of IT sector in India. While the US was amidst the dot com bubble and Eurasia was under the Y2K scare India seized the opportunity with cost arbitrage and forayed into global software markets by providing debugging services and soon became a favorite outsourcing destination.

Year 2003 to 2007 marked the Infrastructure boom while post Lehman fiasco the era in IT was dominated by the Cloud and As A Service Economy, the early 2012 saw the emergence of mobility while the late 2016 and onwards gave hopes in improving business growth and efficiency with IoT, Automation, Blockchain, Artificial Intelligence and other emerging technologies making a digital basket.

Out of 421 SEZ’s 276 are IT SEZs across India located at Bangalore, Hyderabad, Gurgaon, Chennai and Pune as preferred destinations. IT Sector has produced both solutions and leaders generating value to the world, it’s not a surprise to see Sundar Pichai, Satya Nadella and Shantanu Narayen making news every second day and inspiring many Indians as role models. 

The web-enabled playing field has been created since the 1990s which has changed the way work is carried out and services are delivered. The last two decades has witnessed software maintenance and development has been carried out in a dispersed manner and at lower costs in countries such as India, the Philippines and China, while some traction is seen in Mexico and Brazil too.

Covid19 has changed the geopolitical scenario and India is seen as a hot destination for the next wave of Outsourcing and emergence of new Captives centers (GIC, GCC, GSS etc..). Growing demand, Global Footprint, Comitative advantage and Policy support are the positives while a key challenge faced by the decision makers is the availability of talent.

There is no dearth of skilled resources who can play the role of good developers, testers, analysts and solution architects this sector largely looks at the west for Leadership guidance and decision making. Time and again various reports have echoed a challenge in getting leaders who are able to balance between technical and business perspectives who today are handful in the market. 

The third wave of growth in the spectrum of all four facets like Outsourcing, Offshoring / Captives, Right shoring and Near shoring, across sectors like Financial Services, Pharma, Healthcare and Lifesciences (HLS), Argitech, Manufacturing 4.0, Information Technology / Deep Tech and Shared services will now be powered, with Digital GCC’s.

This in turn leads towards building strong leadership and talent in the form of Knowledge workers which is the absolute need of the hour, for India to meet the global demand in the area of Cognitive Robotics, Quantum Computing, Cyber Security, AI / ML / Data Science, IOT, Block Chain and Microservice Architecture, which creates a tremendous opportunity for exponential growth, learning, development and progressive deployment.

Stay tuned as we intricately unravel the nuances of this realm with objective case studies and quantifiable economic alignment in the coming few weeks.

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