Author: RohitashwaAggarwal

GBS Talent and Skilling Strategies for 2021 and Beyond: A Pinnacle Model® Study | Blog

Take the Study

Global Business Services (GBS) organizations have positioned themselves as valuable partners of the enterprise, driving enterprises’ top priorities and aligning with overarching objectives. Currently, GBS organizations are evolving to become global talent hubs that house deep-domain expertise and next-generation skills for enterprises. However, with the pace of technology adoption intensifying, it’s becoming more challenging to find talent that can fill next-generation positions.

GBS organizations need a robust, futuristic skilling strategy and will want to take steps to hire talent and educate, train, upskill, and reskill their current workforce to fill these necessary roles. The below image illustrates talent-related issues that are arising for GBS organizations.

GBS talent-related challenges

Getting on the right path with a future-ready workforce

To deliver maximum value, GBS organizations should begin to strategize how to bring in next-generation talent and deliver development opportunities to advance current employees’ abilities and skills. With future-ready talent, GBS organizations will bring even more value to the table, encouraging enterprises to view them as operating units with increased leadership contributions and less as helpers. Having the right talent could also lead to expanding into additional areas in which GBS can be more involved and entrenched with enterprise strategy and decision-making.

Further, skilled talent will provide a competitive advantage for GBS organizations, with the most success coming from those that have invested heavily in their employees’ skills and competencies. Enhancing skills within the workforce will be key to augmenting strengths and differentiators for the GBS model in 2021 and beyond.

Talent strategy focus areas

There are a few specific areas where GBS organizations can adapt when it comes to acquiring talent and advancing current workforce skills, including:

  • Enhancing brand perception in the talent market
  • Utilizing out-of-the-box talent acquisition methods
  • Offering learning and development (L&D) and talent reskilling and upskilling

GBS organizations that are proactive with their talent strategies, open to adopting new tactics, and not tethered to traditional methods are among those that may see the most success.

Enhancing brand perception in the talent market

With access to high-skill capabilities being a top priority for GBS organizations in 2021, there are expected changes to GBS talent-related performance metrics, including a higher bar for quickly finding and hiring talent. Turning to non-traditional methods to catch attention is becoming more common. One of the most effective approaches is a stronger social media presence to boost brand awareness and to be viewed as a desirable place to work. Hiring strategies now include being active in niche group conversations on social media and using hashtags to get in front of the right crowds.

Out-of-the-box talent acquisition methods

GBS organizations are searching out a variety of ways to find talent. Some have found success by hiring talent with specific skills from alternative and adjacent industries. There is also a different approach when it comes to reaching junior-level talent. Organizations are partnering with educational institutions, not just to offer internships, but to co-develop classes and implement projects like campus ambassador programs and hackathons. This gives the student an opportunity to get to know the organization and develop relationships with employees. One other method of attaining niche talent is through acquihiring, where a company will acquire another company, primarily for the skills of the staff.

L&D and talent reskilling and upskilling

As GBS organizations strive to deliver higher-value and multi-function services, they will not only need to find the talent, but work to keep that talent. This could be carried out by incorporating career paths and L&D opportunities, so talent stays trained and relevant on new skills. Many organizations are developing in-house learning for employees through gamification-based programs, making learning fun and improving employee engagement. Another method taking shape is peer-to-peer learning, where employees can come together to be innovative and learn from each other.

By creating a culture of learning, investing in talent, and helping the workforce to continually develop skills, GBS organizations can create a cycle of upskilling and reskilling, which could ultimately close the talent shortage gap for good.

The 2021 Pinnacle Model study for skilling strategies in GBS organizations

To discover more about talent and skilling strategies within GBS organizations, Everest Group and The Conference Board have developed the 2021 Pinnacle Model study. The research accumulated from the study will narrow down future skilling and talent strategies and provide valuable insights around best-in-class, or Pinnacle, skilling strategies in leading GBS organizations based on our proprietary Pinnacle Model framework.

How will this research help you?

By contributing to this study, you will learn how your peers – and the best of the best – are designing and implementing their skilling strategies. We will share a complimentary summary analysis of the survey results highlighting how your organization compares against peer groups with respect to capabilities created and business outcomes achieved.

Take the Study

The GBS Market: Performance in 2020 and Shaping Success in 2021 | Blog

Despite the struggles that COVID-19 threw at all industries across the world, the GBS market not only made it out, it advanced in 2020. Now, in 2021, it continues to be an integral element of the sourcing model, accounting for 27 percent of the global services market.

Everest Group’s GBS State of the Market Report: Top 2021 Priorities for GBS explores the current GBS market, how it arrived where it is today, and peak initiatives for 2021. The report examines landscape and adoption trends for a clear view forward for GBS, including top expectations of enterprises and the role that GBS organizations can play to strengthen their influence within the enterprise.

The report is based on Everest Group’s proprietary GBS database of more than 3,500 offshore/nearshore GBS centers. Throughout this blog, we’ll examine a few of the report’s many compelling findings.

Keeping pace with an agile approach

It was encouraging to discover that both outsourcing and GBS models continued to grow in 2020, albeit at a slower pace than in 2019. More than 200 GBS centers were established across onshore and offshore/nearshore locations in 2020, with the addition of 40,000+ full-time employees (FTEs). Some of the new GBS center set-ups in 2020 include Qualcomm, Microsoft, and Barclays, to name just a few.

Enterprises are increasingly leveraging the GBS model to establish digital hubs and ER&D (engineering and R&D) centers to create successful digital customer and employee experiences. The resiliency and growth shown from the GBS market in 2020 helped to deepen confidence from enterprises. For example, when COVID-19 propelled digital initiative adoption forward across most verticals (technology and communication, Banking Financial Services and Insurance (BFSI) firms, manufacturing, retail and CPG, and healthcare and life sciences), GBS organizations saw it as an opportunity to step up and deliver higher value-add digital services for enterprises. These services included expanded digital capabilities in areas such as advanced automation, analytics, cloud, platform-based engineering, etc., to meet evolving enterprise expectations and priorities.

Accelerating digital offerings is one way that GBS organizations can continue to drive operational resiliency and better position themselves as strategic business partners for change management initiatives within enterprises in 2021. This image illuminates how GBS markets are steadily moving in a direction toward digital transformation.

Picture1 2

GBS activity across locations

After the initial shock of the pandemic, Q4 of 2020 witnessed rapid recovery, especially across India, Rest of Nearshore Europe, and Rest of Asia.

The below image portrays GBS market activity by delivery location and the number of new set-ups. Interestingly, only 13 percent of the companies that set up GBS centers in tier-2/3 locations in 2020 already had GBS centers in tier-1 locations; the remaining 87 percent of companies were exploring the offshore GBS model for the first time.

Additionally, 40 percent of GBS organizations in the report are examining geographic diversification, and 30 percent are looking into the adoption of small-scale/satellite centers to better manage both risk and future cost structures.

Picture2 1

GBS across industries and functions

Across industries, the technology and communication vertical continued to dominate the market, contributing to more than half of the new center set-ups in 2020. The BFSI firms were next in line, accounting for one-third of the headcount (FTEs to date), followed by manufacturing.

Forging into 2021 and beyond

The GBS market stood its ground as the pandemic swept through, and in the end, it has come out a more evolved industry with overall improvement in performance. However, GBS organizations will need to continue to evolve in the aftermath of COVID-19 and as the needs of enterprises shift. GBS organizations should focus on:

  • Refining overall productivity as it will be the next frontier beyond scaled arbitrage
  • A robust, futuristic workforce strategy that can unlock high-talent capabilities
  • Taking a larger picture view of WFH to confirm the model aligns with overall talent goals and targeted growth
  • Creating a holistic and design principle-led global workforce strategy
  • A clear path for digital transformation, which will be paramount throughout 2021 and years after
  • Ensuring cost-competitiveness to avoid third-party economic comparisons
  • Opportunities where GBS organizations can strengthen and expand their influence with enterprises and meet evolving expectations, for example, moving from being viewed as just the enterprise’s helper to an entity that can help shape ideation, design, and even influence major initiatives

Explore complete details of the GBS State of the Market Report: Top 2021 Priorities for GBS by downloading the full report here.

We’d love to hear about your GBS strategy, please reach out to us at [email protected] or [email protected].

 

 

 

Scaled Work From Home Inevitable for GBS Organizations Following COVID-19 | Blog

GBS organizations have traditionally been reluctant to adopt work from home

Before COVID-19, most Global Business Services (GBS) organizations have been reluctant to adopt a Work From Home (WFH) delivery model, viewing it as hard to govern and only relevant for a few work types and employees. As a result, organizations primarily used WFH for Business Continuity Planning (BCP) purposes – and with less than 5% of organizations deploying WFH at any scale (i.e., 20-50% of the workforce working from home), there was limited/no focus on building an enabling ecosystem to support remote working.

COVID-19 has redefined the art of the possible

COVID-19 led to widescale (and forced) adoption of WFH in GBS organizations across verticals and geographies, as organizations were compelled to scale up WFH quickly to ensure operational continuity and prevent large-scale absenteeism. After initial challenges to ensure home infrastructures were optimal, robust, safe, and compliant with service delivery standards/regulations, most GBS organizations found that productivity did not suffer. In fact, several organizations have reported productivity gains, though the volume of these gains remains debatable. As of May 2020, more than 90% of GBS organizations were delivering services in a WFH model. COVID-19 has redefined what’s possible, truly changing global leaders’ view of WFH, as Exhibit 1 shows.

Exhibit 1: Blueprint for scaled WFH adoption in GBS – the next normal

001

When we find ourselves on the other side of this pandemic, there will be a growing appetite for more WFH adoption, with many organizations considering it a permanent model. Leading organizations, including Facebook, Google, Microsoft, TCS, and HCL, have already announced plans to adopt WFH. We expect WFH to emerge as an imperative for GBS organizations, with more than 30-40% of GBS organizations adopting scaled WFH even after lockdown restrictions are lifted.

WFH – a strategic lever for GBS to evolve delivery and operating models

Even when there is no pandemic or other external threat forcing organizations to engage a WFH model, there is a strong business case to scale it. Our assessment shows that WFH can help drive significant GBS operating cost savings (anywhere from 5-15%), improve the talent model, lower risk in the location portfolio, strengthen the GBS value proposition, and provide societal and environmental benefits, as highlighted in Exhibit 2.

Exhibit 2: Business case for WFH

002

Adopting a WFH model can drive the next wave of cost optimization for GBS. WFH can directly impact and reduce costs related to real estate infrastructure, transportation, and consumption. WFH can also reduce people-related costs by lowering attrition and increasing employee productivity. To support these gains, GBS organizations would have to invest in technology-related infrastructure such as equipment, tools, platforms, and technologies. Detailed Everest Group analysis indicates that GBS organizations can save up to 15% of their annual operating cost with 50% of the workforce working from home. They can further increase savings potential by:

  • Increasing process standardization;
  • Reducing permanent real estate;
  • Increasing cloud adoption;
  • Creating remote sites in low-cost locations;
  • Employing automation; and,
  • Using digital collaboration tools.

WFH can help GBS organizations improve talent acquisition and engagement. For the current workforce, WFH can improve GBS employee retention, improve employee productivity due to reduced stress (such as eliminating the commute) and office-based distractions, and help strengthen branding as a socially conscious organization. For the future workforce, WFH allows the GBS organization to improve the speed and effectiveness of talent acquisition, accessing talent far from its physical site locations, as well as by leveraging the gig economy.

Beyond these benefits, WFH reduces GBS concentration risk without necessitating a change in locations portfolio. Some GBS model features, such as greater control and governance, better protection of IP and domain knowledge, and ease in driving long-term transformation, may be better suited to the WFH model. Thus, GBS organizations can leverage adoption WFH to further strengthen their value proposition to their parent enterprises.

Such a strong business case seems to indicate that WFH is a win-win-win for enterprises, GBS organizations, and the workforce. As a result, it seems inevitable that WFH will become an integral part of the services delivery model.

However, before scaling WFH, organizations must understand the interplay of various decision drivers to determine overall potential to scale it. WFH adoption does not come without challenges, such as its implications for employee development and expectations, social capital, leadership development programs, the role of front-line managers, and work-life balance. Further, there are several regulatory aspects – such as data security, labor and employment laws, SEZ norms, and current limitations of the Shops and Establishment Act or telecom departments – that may hinder scaled WFH. Stay tuned – we will cover these aspects in our subsequent blogs.

For more details on this topic, see our “Playbook: Integrating Work From Home in the Global Business Services (GBS) Delivery Model.” Or reach out to us with your perspectives and experiences, write to us at [email protected] and [email protected].

Will COVID-19 Amplify Acqui-hiring and Help Companies Win the War on Talent? | Blog

COVID-19 is truly turning out to be the black swan event of our lifetimes – it will have profound near- and long-term consequences on talent markets around the world. The International Monetary Fund (IMF) recently noted that COVID-19 could contract the global GDP by 3 percent in 2020, causing the GDPs of 170 countries to shrink and making it the steepest downturn since the Great Depression of the 1930s. As discussed in our recent blog, Will COVID-19 Ease the Relentless War for Talent?, talent shortages will become even more acute and the supply-demand gap for emerging skills will further widen as companies undertake rapid digital transformation and adapt to the “next normal.”

Against this backdrop, some firms are seeing this time as an opportune time to acqui-hire – or acquire startups primarily for their talent.

We have been here before. Acqui-hiring tends to spike during and after economic crises. The early 2010s saw a flurry of acquisitions by Silicon Valley giants including Facebook, Google, and Microsoft, aimed at acquiring hot skills. We believe there will be a similar acqui-hiring surge in 2020, with multiples firms announcing plans to acquire emerging skills and accelerate their efforts to build niche capabilities.

Why do companies acqui-hire?

Mark Zuckerberg once said, “Facebook has not once bought a company for the company itself. We buy companies to get excellent people.” This sentiment highlights the premium companies place on good talent. Companies acqui-hire to leverage multiple advantages such as access to highly-skilled talent, reduced time-to-hire and training efforts, developing niche capabilities, and launching a business model.

Facebook has plans to hire 10,000 additional FTEs in its product and engineering teams to tackle high utilization after the pandemic abates and to combat misinformation in advance of the U.S. presidential election in November. Amazon and Google are aggressively hiring product, design, and engineering talent. Apple CEO Tim Cook recently stated that the company plans to hire aggressively, just as it did after the 2008 financial crisis.

With multiple startups facing reduced valuations due to the economic downturn, it is highly likely that a significant chunk of this demand for talent will be addressed through focused acqui-hiring. Additionally, we expect leading Indian service provider players supporting global services delivery, like Infosys, TCS, and Wipro, to accelerate their acquisition efforts to gain strategic capabilities and grow business inorganically. And Walmart Labs has announced plans to hire over 3,000 FTEs for its India centers, aiming to strengthen its India COE by hiring new talent and acquiring relevant startups.

We are already seeing many acqui-hiring deals in 2020, a few of which we describe below. While not all were triggered by the COVID-19 aftermath, we expect the business and economic repercussions of the pandemic to accelerate this trend.

  • Google recently acqui-hired Superpod, an app that allows users to post questions and quickly receive answers from experts, to boost Google Assistant’s capabilities.
  • Tata Group-owned Titan Company, a traditional watchmaking firm, recently acqui-hired HUG Innovations to strengthen its smartwatches and wearables division, and plans to set up a development center in Hyderabad to cater to hardware, firmware, software, and cloud technology.
  • KPMG India acqui-hired Shivansh Solutions, an SAP consulting and implementation services provider, to augment its technology implementation practice, retaining Shivansh’s directors and the core team of SAP consultants.
  • Leading tech-enabled logistics marketplace, LetsTransport, recently acqui-hired and onboarded the team of a web and mobile app development startup, Pixlcoders, to strengthen its supply chain, technology, and applications divisions.
  • Alphonic Network Solutions, a leading mobile application development company, recently completed the strategic acqui-hire of Roaring Studios, a digital startup to augment its web and mobile app development.

As these deals indicate, acqui-hiring presents a great value proposition for companies to access highly motivated ready talent, augment existing offerings, and develop new capabilities. It also proves lucrative for startups, especially those that might be struggling with funding during an economic downturn. We are already seeing early signs of funding scarcity, with industry analysts reporting that total startup funding in New York City is down 48 percent from year-ago levels since the lockdown started in mid-March.

Acqui-hiring can be a win-win for everyone. However, to ensure acqui-hiring success, companies must address critical factors beyond the usual legal and contractual due diligence.

What makes acqui-hiring work?

To make acqui-hiring work, companies must:

  • Explore cost-benefit trade-offs – While multiple acqui-hire opportunities may exist in the market, assess their strategic near- and long-term priorities, and shortlist startups that align with their firms’ objectives and address crucial talent-supply demand gaps.
  • Assess culture fit –Ensure that the acqui-hired talent, who usually possess an entrepreneurial mindset with a constant need to create, has the capacity to adapt to a systemized, rules-based corporate environment.
  • Evaluate employee attitude –Make sure that the relevant skills are accompanied by the right attitude to avoid potential attitude issues.
  • Ensure smooth integration – Properly manage the integration process to eliminate in-house talent’s apprehensions about, and potential resentment toward, acqui-hired team members.

The way forward

The economic aftereffects of COVID-19 will surely create some paradoxes. While on one hand startups may be challenged and job markets ravaged, on the other hand this time could present an opportunity to re-strategize priorities, revitalize operating models, build capabilities, and acquire the right talent. We believe companies that proactively realign their workforce strategies and tactically utilize acqui-hiring will emerge stronger and more resilient.

Companies looking to acqui-hire as way to address emerging talent challenges must undertake the following steps to ensure effective outcomes:

  • Review the global workforce strategy and identify relevant talent supply-demand gaps
  • Identify and evaluate potential acqui-hire options
  • Undertake comprehensive legal and contractual due diligence
  • Develop a comprehensive roadmap for integration with the existing operating model.

We’d love to hear your thoughts on acqui-hiring as an effective talent acquisition strategy. Please share with us at: [email protected] or [email protected].

Will COVID-19 Ease the Relentless War for Talent? | Blog

While some people in the global services industry think that large scale unemployment and the slowdown in growth due to the COVID-19 pandemic may reduce the talent demand-supply gap, we wholeheartedly disagree. Indeed, we believe that strategic workforce planning has become even more critical for the global services industry.

Here are four reasons why organizations need to accelerate their workforce initiatives right now.

Talent shortages will become acute

A survey we conducted in early 2020 found that, even before the COVID-19 crisis, 86 percent of enterprises considered the talent shortage a key barrier to achieving business outcomes. This situation will further exacerbate. It’s true that the impending economic downturn could lead to even more unemployment and oversupply in the talent market. However, the available skills profiles may not necessarily match organizations’ current and future requirements, especially because highly skilled talent is expected to be retained even during downsizing. Increasing focus on automation and digital transformation will further widen the demand-supply gap for skills, making it difficult for organizations to source suitable skills internally or in the open market. The prevailing circumstances (e.g., the lockdown, financial distress, and health issues) may impact overall talent employability in the open market, further compounding the talent availability issue.

Rapid digital transformation is inevitable, and it will intensify the demand-supply gap

COVID-19 has accelerated digital transformation across organizations. It has not only reinforced the utility of tech-enabled platforms and advanced automation for seamless service delivery during mandatory Work-From-Home (WFH) protocols, but also enabled organizations to react to the evolving business environment and customer needs faster. The impending budget cliff and business model changes will further push organizations to prioritize digital transformation, which will have implications on the talent needed both to drive this change and to deliver services after transformation. Demand for emerging skills will spike even faster, again creating the need for reskilling, alternative talent models, and productivity enhancement. We are already seeing a spike in hiring by companies like Amazon and Google. Some firms are seeing this as an opportune time to acqui-hire – or acquire startups primarily for their talent. Leading global banks, healthcare firms, and manufacturing firms are rethinking their talent strategies.

Supposedly foolproof location and BCP strategies did not work in the face of this pandemic

COVID-19 has exposed key issues with enterprises’ and service providers’ existing locations strategy and Business Continuity Planning (BCP) approaches. Nearly three-quarters of enterprises that have offshore/nearshore GBS centers operate in only one location. Even enterprises with multiple GBS centers have a high concentration of talent in their largest center. Others have developed centers of excellence with large portions of their workforce for a specific function consolidated in a few locations. Less than 10 percent of GBS centers were truly prepared for a seamless WFH model. Companies will need to re-evaluate their redundancy matrices and location/portfolio mixes to achieve a more robust BCP. Some seemingly obvious responses to locations portfolio questions may not apply anymore.

WFH is here-to-stay

A 2017-18 survey by the Bureau of Labor Statistics revealed that nearly 30 percent of the American workforce could work remotely. The extended lockdown in the near term and a high utilization, once the COVID-19 crisis has abated, will likely make WFH an integral component of the overall service delivery model. This change will have significant talent implications – motivation, employee engagement, performance metrics, reporting metrics, communication protocols, and collaboration – which organizations will need to proactively address to optimize productivity and enhance output.

COVID-19 has precipitated a fundamental shift in the way we work. There are underlying opportunities for enterprises and service providers that proactively adapt to the new normal. We believe there are four immediate steps that enterprises must take:

  • Review your enterprise global workforce strategy
  • Develop a roadmap for skills development initiatives
  • Review your locations portfolios and BCP strategy
  • Build a playbook for integrating WFH and crowdsourcing into your services delivery models

We’d love to hear your thoughts on how the COVID-19 pandemic is impacting talent strategies. Please share with us at: [email protected], [email protected], or [email protected].

The Three Components Your Shared Services Center Needs to Include in its Innovation Equation | Blog

Supporting enterprises’ innovation agendas is no longer simply an opportunity for in-house shared services centers – what we call global in-house centers (GICs); it’s fast becoming a competitive imperative. And, contrary to popular perception, cracking the innovation code requires much more than just novel ideas. Success entails boarding the right people on the bus, gearing them up with the right mechanisms to drive agile decision making, and reengineering the organization’s cultural DNA to foster innovation. We’ve developed a simple approach that will help you solve this complex problem.

Let’s take a look at the three components.

The Three Components Your Shared Services Center Needs to Include in its Innovation Equation

Process

Innovation is not the product of logical thought, although the result is tied to logical structure – Albert Einstein

The first element is formulation of the right mechanisms to evangelize innovation initiatives. It requires the right idea generation mechanisms to harness unique ideas from both internal (GIC and parent company stakeholders) and external (including startups, academia, and service providers / specialists) ecosystems. A critical part of this is evaluating the strategic rationale for the partnership. While some shared services centers partner with third-party providers and start-ups for talent augmentation and skill acquisition, others leverage the connections to develop domain expertise or increase the speed of innovation.

Another essential component, specifically for GICs, is the right funding mechanism. While we see most shared services centers carving out a separate fund for innovation (which is part of the overall GIC CEO budget), we are increasingly seeing them push for a global/centralized fund where the innovation team within the center operates as an extension of the global innovation team(s), and is funded by centralized global venture funds / programs. For select initiatives, we have also seen GICs securing funding from business units and driving project-based innovation initiatives.

The third component here is timely deployment of robust governance mechanisms. Shared services centers need to adopt a disciplined approach to rigorously track performance and incorporate remedial feedback on a continual basis. This not only helps to assess the effectiveness of activities, but also guides allocation process for resources, and helps assign accountability for actions/responsibilities.

People

Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have and how you’re led – Steve Jobs

Involving the right people in the right team structure is the second critical component. Leading GICs involve stakeholders from different parts of the organization, i.e., functional and business teams, central innovation groups, R&D departments, and corporate teams to invest time in exploring adjacent and transformational opportunities. This helps in cross-pollination of teams and enables development of a holistic solution in an accelerated go-to-market timeframe. While we have seen varied designs for innovation teams (based on organizational fit and business alignment), the common thread is the focused top-driven approach to creating structural changes, supplemented by continuous support from middle management to ensure smooth implementation.

Another key initiative leading centers are taking is remodeling their existing talent practices. They are now shifting their focus from hiring for specific “skills” to hiring for “learnability” / “thinking skills”, i.e., the ability to innovate. They are incentivizing innovation, and providing special recognition for outside- the-box thinking. We are also seeing strong innovators recalibrate their existing performance measurement metrics to align with the impact generated against the business objectives.

 Culture

“Innovation is not something you do for one afternoon a week, it’s got to be in your DNA” – Jasper de Valk and James van Thiel, Google

The third principal tenet to ensuring foundational success on the innovation journey is dedicated investment in developing a customer-centric culture with active CXO-level participation. Shared services centers are deploying multiple tools to reengineer their DNA and develop a culture that breeds innovation. Most successful examples include: gamification of programs and distinctive recognition for positive reinforcement; stimulation of an experimentation mindset and instillation of risk appetite; and adoption of flexible employment models, including remote working, crowdsourcing, and open innovation.

Although new technologies are path-breaking, we believe that the key to a GIC’s success is incremental innovation. They should keep testing small-scale POCs to demonstrate end-client value and build credibility. Successful implementation of pilots can help them instill confidence among parent stakeholders, and ensure adequate support and funding for much larger scale initiatives. This process also presents centers with an opportunity to course-correct early and drive/lead enterprise-wide digital initiatives.

If you’d like detailed insights and real-life case studies on how GICs have effectively driven the innovation agenda for their enterprises, please read our recently published report – Leading Innovation and Creating Value: The 2019 Imperative for GICs. And feel free to reach out to us at [email protected] to explore this further. We will be happy to hear your story, questions, concerns, and successes!

Simplifying skilling in Global in-house Centers (GICs) | Sherpas in Blue Shirts

With technological developments and digital disruption driving changes across most facets of global enterprises, it comes as no surprise that talent strategy has evolved from an HR topic to a board room agenda item. Because of their evolving role in how they can best support their parent companies, talent strategy is a top concern for global in-house centers (GIC) as well.

Through our extensive research in the GIC space, we’ve identified several trends among GICs that have experimented with upskilling and reskilling their team members to prepare and enable them to address today’s known and tomorrow’s as yet unknown challenges.

Trend 1: Investments in Skilling Mid-level Employees have been Underwhelming

Skilling Needs in GIC

Most GICs have dedicated skilling programs for senior management (Layer 3) and programmatic hiring and training programs for entry-level talent (Layer 1), including partnerships with universities/agencies. But, interestingly, there’s a big gap in GICs’ skilling practices for mid-level/Layer 2 employees.

Because Layer 2 employees form the backbone of a GIC by providing strong domain and process expertise, and typically have deep organizational knowledge, GICs need to escalate the skilling initiatives targeted to them. The right skilling practices for these individuals will be critical to GIC’s successful evolution and ability to sustainably deliver services in the future.

Trend 2: GICs are Experimenting – Starting Small across Multiple Areas, then Deciding Where to put Their Money

Because they’re lacking clarity on areas to prioritize, GICs are piloting upskilling and reskilling initiatives across multiple functions. These are typically small-scale pilots of less than 50 team members for less than three months. After evaluating the success of the pilots, GICs plan to scale-up the initiatives across their broader employee segments and organizations.

These pilots will help GICs decide where to invest. But they must also consider their peers’ best practices for upskilling/reskilling in the same or similar functions. This will help guide them in how to best avoid unproductive investments.

Trend 3: It’s Largely an In-House Game

GICs are primarily using in-house teams to develop and run their reskilling and upskilling initiatives. They believe they can reduce risk with internal teams that have a strong context and understanding of the business. This approach also allows them to experiment more, given lack of clarity on exact requirements and end results.

However, they may benefit by making selective use of external specialist providers in areas where they lack internal capabilities, such as use of gamification and simulation for training, role mapping and employee suitability assessment exercises, and change management training.

Trend 4: It’s Just a Part-Time, On-the-Job Affair

In most areas, GICs prefer part-time upskill/reskill training for their employees. Full-time training is limited to certain next gen skills, like digital, or across functions, e.g., of contact center employees in the use of analytics. When used, full-time training often occurs over just one to two weeks.

There’s no clear cut, overarching answer on whether the   part-time or the full-time model is a better choice. GICs need to consider factors such as complexity of the new skills, employee time off their current jobs, and the rate of previous training successes to choose the appropriate model in each given situation.

We recently surveyed senior leaders from 80+ GICs across India, the Philippines, and Poland to assess the changing nature of skills/competencies needed for the future, and the roles GICs can play in addressing the changing skill requirements. Contact us here to see the results, and to exchange perspectives on evolving skills needs and approaches to future proof your talent strategy.

And keep your eyes peeled for our next blog on this topic, where we’ll talk about best practices and how some GICs have upskilled and reskilled their team members.

 

GICs are Evolving from “Delivery Centers” to “Capability Centers” | Sherpas in Blue Shirts

Historically, companies have leveraged the GIC model to deliver business process (operations) and IT services. However, as the model is maturing and incremental demand for these services is declining, enterprises are increasingly looking to their GICs to build more strategic Research & Development (R&D) and digital capabilities, drive innovation, and focus more on value-added services. In other words, they want their GICs to be “capability centers,” not just “delivery centers.”

There’s clear evidence that this is happening. In 2017, there was a significant increase in set-up of such capability centers focused on R&D and digital skills, especially in areas such as design, innovation, automation, Artificial Intelligence (AI), Machine Learning (ML), and cybersecurity. Indeed, our recently released GIC Annual Report 2018 shows that the share of centers supporting R&D/engineering services – including digital services – increased by almost 150 percent during 2017, as compared to 2016. And these centers accounted for more than 50 percent of total GICs setup in 2017.

Breakdown of new GIC setups by services delivered

These capabilities are expected to be the key differentiators and success drivers for global enterprises going forward. In 2017, ~46 percent of all new centers were focused on developing or expanding digital capabilities for the enterprise. There are multiple examples where offshore/nearshore GICs have been given a global mandate to lead organizational initiatives in new and emerging areas such as automation and blockchain.

Related: Simplifying skilling in Global in-house Centers (GICs)

So, how exactly are GICs becoming the global capability centers? What are the key enablers? Another of our recent research studies shows that GICs need to take a FORCEful approach:

FORCEful approach to becoming the global capability centers

  • Foster innovation: GIC leadership needs to invest in developing a customer-centric culture, and test small-scale Proof-Of-Concepts (POCs) to demonstrate end-client value and build credibility
  • Orchestrate transformation: GICs should leverage their well-established foundation by identifying their core strengths and upshifting the value they deliver through improved operational excellence with productivity enhancements, optimized pyramids, and better managed external spend. Simultaneous focus on leveraging these new capabilities to drive both growth and efficiencies will be critical to deliver true value to the enterprise
  • Reskill and upskill workforce: GICs must radically change their reskilling/upskilling initiatives to ensure talent readiness for next-generation skills. They also need to adopt a bespoke approach for specific requirements, and undertake pilots in areas with the highest skills gaps to assess the effectiveness and relevance of the capability centers model
  • Collaborate with ecosystem: GICs should proactively leverage the external ecosystem – specialist providers, startups, educational institutions, etc. – to develop holistic solutions, increase agility, and reduce go-to-market time
  • Expand existing capabilities: GICs have a unique insider’s view that enables them to provide strategic insights to orchestrate enterprise-wide digital/technological transformation, facilitate integration between IT and operations, and break functional siloes to achieve truly breakthrough results

Related: How we support shared services centers (or GICs)

To learn more about the research behind our FORCEful approach, please click here. And if you’ve already established a capability center, or are in the process of doing so, write to us at [email protected] or [email protected]. We’d love to hear your thoughts and experiences!

Enterprises are Betting Big on India GICs for Driving Digital | Sherpas in Blue Shirts

The rise of India-based Global In-house Centers’ (GIC) role in supporting enterprises’ digital transformation through digital technologies, such as RPA, mobility, and IoT, has been significant in the past few years. In 2017 alone, over 50 percent of the GIC set-ups in India were focused on building/enhancing enterprises’ digital capabilities.

Indeed, enterprises are making their India GICs the hub for developing solutions and products for next-gen technologies, such as machine learning, NLP, predictive learning, cognitive, and blockchain. Recent examples include Samsung, State Street, and Western Union.

Why India?

  • Talent availability: The ability to scale next-gen skills at low cost is a key differentiator. For instance, India accounts for 50-60 percent of the talent pool employed for delivery of automation services from offshore/nearshore locations. A strong base of third-party service providers has also established digital and technology labs in India
  • Mature delivery model: India accounts for 30-35 percent of all nearshore/offshore GIC set-ups, and more than 45 percent of their FTEs. Mature operations and middle-/back-office delivery presence in India give them a strong foundation on which to build their digital efforts. And it allows them to develop more integrated operations, technology, digital, and analytics solutions to address the evolving business needs of their parent organizations
  • Strong start-up ecosystem: India has one of the most evolved technology start-up ecosystems in the world. As of 2016, it had more than 4,500 tech start-ups employing a pool of around 100,000 FTEs. This situation not only allows enterprises to access next-gen technological solutions, but also to tap into the ecosystem to accelerate progress when additional resources are needed
  • Economies of scale and cost benefits: While cost may not be the primary driver, it certainly is a key differentiator. Budgets are always scarce, and needs are always plenty. India offers quality talent at lower cost and allows companies to drive low cost innovation and development

Digital Pinnacle™

How are the best-of-the-best enterprises and GICs leveraging India and other locations for digital? To expand our insights beyond the work we conduct with our clients, we’ve launched a Digital Pinnacle™ survey to learn more about successful GICs’ digital journeys.  We invite you to participate in the survey and/or to share your thoughts and experiences with us at [email protected] or [email protected].

Watch this space for more insights on GICs and for the deep-dive survey results.

Talent Management in Global In-house Centers: Are You Future-Ready? | Sherpas in Blue Shirts

There’s no question that digital technological advancements, evolving business requirements such as changing consumer needs and faster time to market, and a heightened focus on customer experience are significantly changing the profile of skills needed to deliver services. As most global in-house centers (GIC) are already facing challenges in hiring people with the right skills for the future, it is concerning that their talent-related preparation for such a tectonic shift is lacking.

Talent Management GIC_1

Here are four talent management imperatives for GICs to develop the workforce of the future.

1. Identification of Skills Gap

As automation and other technological advancements kick in, human skills, such as innovation, design thinking, problem solving, empathy, and ethical thinking will become more critical. Identification of skills gap will be pivotal for GICs’ talent acquisition and development strategy. A recent Everest Group study of 80+ GICs across India, Philippines, and Poland identified multiple, and difficult to hire, skills that are likely to become more important in the future.

Talent Management GIC_2

2. Upskill/Reskill Current Workforce

Firms’ talent challenges will intensify with the automation of transactional services. They will face the dual risks of a large existing workforce with many skills that are likely to become redundant, while struggling to find talent with the right skills for their future needs. Upskilling/reskilling existing talent is an important lever for GICs to address these challenges while preserving their trained workforce with string domain/industry know-how. (See our detailed report on upskilling/reskilling in GICs for additional perspectives.)

3. Evolve Talent Acquisition and Development Strategy

As GICs look to develop a future-proof talent strategy, they will need to think outside the box to tap into alternative sources of talent. Opportunities include hackathons, hiring from startups and other industries, project-based partnerships with specialist agencies, and flexible resourcing. From an L&D perspective, traditional classroom model needs to evolve as learning is becoming more real-time, customized, and digitized, e.g., MOOCs, simulation, and gamification.

4. Agile Human Capital Planning

With a dramatic decline in skills’ half-life, particularly in the technical space, GICs need to identify and focus on skills that are more likely to be critical for their growth. A more frequent approach to human capital planning might be essential to account for rapid changes in these skills.

While many GICs are still taking a wait and watch approach to the talent management issue, some have already embarked on this transformational journey. And those that are proactively addressing it are reaping big rewards.

Watch this space for more insights and success stories. And if you’d like to share your challenges, successes, or questions with us, please feel free to write us at [email protected] or [email protected].

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

  • Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.