Incoming & Outgoing Talent in IT GICs in India | Market Insights™
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GICs hire the majority of their talent from service providers; however, they lose the majority of their talent to other GICs and domestic companies
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GICs hire the majority of their talent from service providers; however, they lose the majority of their talent to other GICs and domestic companies
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ADM is the most common IT function delivered through Global In-house Centers (GICs), but its share has been declining in recent years
Annual number of new GIC setups reaches four-year high, driven by enterprise demand for digital skills
The global sourcing market continued to evolve and grow rapidly in 2015 to cross the US$160 billion mark. While buyers leveraged a variety of sourcing models, the Global In-house Center (GIC), also known as captive center, model continued to be an integral component of this evolution, accounting for 25 percent (US$38-42 billion) of the global offshore services market.
The success of the GIC model in India and the Philippines led buyers to explore its application in other locations. While both these countries continue to lead GIC activity, companies also established GICs in other parts of Asia, Central & Eastern Europe (CEE), Latin America, and Middle East & Africa (MEA). The CEE region, in particular, is becoming a preferred delivery location for GICs as it offers an attractive cost-talent-operating environment proposition.
Besides the geographic diversification, the GIC market also expanded across verticals and functions. The manufacturing, distribution and retail (MDR) vertical continued to dominate, logging maximum growth and the most new setups in comparison to other verticals. Business process services continued to be the predominant function served by GICs; however, IT and R&D/engineering services witnessed traction due to growing importance of digitalization.
“We expect GIC activity to continue on its growth trajectory, because GICs are no longer seen as only a support unit or cost-saving mechanism for their parent entities,” said Sakshi Garg, practice director at Everest Group. “GICs are being considered a strategic unit for driving innovation. To that end, we increasingly see GICs expanding their ecosystem of partners to include start-ups. The retail and technology verticals are leading this trend, leveraging start-ups in areas such as mobility solutions, business intelligence, cyber security, process automation, and customer experience. ”
Other findings in the research:
***Complimentary Download of Report Preview***
The research supporting these findings is summarized in a preview report, “Global In-house Center (GIC) Landscape Annual Report 2016 – A Million FTE Strong and Growing!” available for complimentary download here.
The GIC model remains robust, with new set-ups and expanded scope
Global services location activity increased in 2015 as buyers invested ahead of demand
The nature of the global services industry is shifting as the market matures, new adopters enter, new technologies bring disruption, and more Global In-house Centers (GICs), or shared services centers, join the scene
On April 20, 2016, Everest Group’s Sakshi Garg, Practice Director, will share her insights during the panel session titled, “Addressing Value, Risk, and Compliance through the offshore GIC Model,” at the SIG Global Summit. The Summit runs from April 19 – 21 in Orlando, Florida. Learn more.
GICs are adopting best practices across three strategic areas to drive digital adoption: talent management, collaboration with vendors, partnerships with start-ups
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GICs can show some digital adoption victories, particularly in analytics, cloud, and mobility, as well as the MDR, product & technology, and BFSI industries
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GICs are well positioned to lead digital adoption in their enterprises because they are talent repositories, they are innovation-focused, and they are a “known” quantity.
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