GICs offerings are slowly shifting
GICs offerings are slowly shifting
While GIC activity declined marginally in 2016, a couple of key factors are presenting ongoing opportunity: demand for digital transformation and benefits beyond cost savings
At a conference I attended recently on the role of global in-house centers (GICs) in digital and RPA, one of the speakers asked everyone to imagine what their organizations would look like in the future. The answers from a room full of enterprise and GIC leaders were varied and fascinating. My personal favorite was the one where robots will manage all forms of work while people relax on a beach, soaking up the sun, and sipping their piña coladas. Tempting as that sounds, I don’t expect it to happen anytime soon.
But what is happening now is a flurry of changes in the business environment globally. Amidst recent geopolitical developments in the U.S. and U.K., increasing talks of protectionist policies, the advancement of RPA and other service optimization technologies, and regulatory pressures affecting the global services sector, GICs and shared services centers find themselves at a crossroads. As the global services sector moves from an arbitrage first to a digital first delivery model, GICs have an opportunity to break away from the orthodox boundaries by taking the road less traveled, and enhance their role in enterprises’ global sourcing strategy.
Everest Group has seen first hand the evolving role of GICs, which has expanded beyond providing low- cost delivery to being agents of change – or catalysts – for enterprises’ back- and middle-office services.
Now, GICs are at an inflection point in their evolution journey, well positioned to take on this enhanced role driven by: increased endorsement from the enterprise and the shift towards insourcing; a strong foundation and ability to offer an insider’s view; tight integration with the existing core business; and strong adjacency with existing focus on driving efficiency and optimization.
What does the future of GICs look like?
To successfully undertake changes within their enterprises and redefine their role from captive to catalyst, GICs need to:
Here are Everest Group’s recommendations on how GICs can capitalize on this opportunity:
Our newly renamed CatalystTM subscription research program (formerly known as Global Sourcing) provides GICs and enterprise clients with actionable insights to navigate through the evolutionary journey from captive to catalyst. Benefits of a Catalyst subscription include:
Global services market, 2010-15, and distribution of global services market by sourcing model, 2015
Hackathon is a portmanteau word that combines the words “hack” and “marathon.” A hackathon’s objective is to team together people from different technical backgrounds to solve a problem. Generally conducted over a period of 24 hours, the uninterrupted and captivating nature of the activity makes it highly productive.
Large technology organizations such as Facebook, Google, and Microsoft often conduct internal company hackathons. While hackathons are less common in global in-house centers, (GICs), they can be equally powerful, enabling talent to be hired from the market (when external participants are allowed), increasing employee engagement, encouraging collaboration among functional silos, improving connections with the parent organization, and encouraging entrepreneurship to create a culture of innovation. From an overarching perspective, they allow the opportunity to experiment with different ways of working together.
Hackathon best practices
Following are Everest Group’s top tips for making a GIC hackathon a resounding success.
Plan well and encourage participation across all functions of the organization including development, testing, the project management office (PMO), information security, and the business. Each function can play the role to which it is best suited. For example, business users can provide realistic problem statements for the teams to solve, and supply the teams with resources to help work on their ideas. Or, business users can participate in various teams, and mentor them on fine-tuning their thoughts and ideas. The PMO can be involved in the logistics and event management.
Conduct your hackathons in an informal setting to enable participants to have fun while getting their creative juices flowing. We know of several organizations that have experimented with associating certain social causes with their hackathons.
With the advent of the digital journey, GICs must not only support their parent organization but also lead the way for digital transformation. This in turn requires building strong innovation capabilities and a talent pool for digital. It will be interesting to see if GICs use hackathons as one of the means to this end. Note: we encourage it, for all the above reasons.
Has your GIC held a hackathon? Have you participated in one? Our readers would love to hear your experiences!