Modern enterprises, globally, are looking at transforming their shared services centers, also known as global in-house centers (GICs) into global capability centers (GCCs) for various reasons. GICs have been handling back-office operations, corporate business support functions, and IT support to maximize productivity growth.
Now, it’s time for GIC leaders and decision-makers to move past the cost center stage and transform GICs into GCCs, while building competencies around emerging technologies and embark on a journey that’s steered toward continuous innovation.
A Bumpy Road for GICs
The priority for GICs has been to create value by looking outside the business as usual and contribute to the parent company’s transformation journey. However, the road to transformation has not been smooth as various factors culminated and led to the stalled growth of the GICs. Let’s take a look at some of them:
- Incorrect positioning of the GICs as cost-effective centers for back-office operations. They need to transform into business-focused revenue centers and incubators of innovation
- Lack of business context as these offshore centers are distant from the core business and customers
- Absence of quality leadership to inspire a diverse set of teams, vendors, and other stakeholders
Unveiling an Ideal Action Plan
Here’s how GICs can adapt to the changing business dynamics and open a new wave of possibilities to become global capability centers:
- Creating a digitally optimized organization
Organizations must embrace a digitally connected enterprise with paperless processes, make data accessible from the cloud, and enable employees to focus on value-added activities. To support a distributed workforce, the IT infrastructure must be expanded to incorporate multiple applications and digital tracking and monitoring of employee activities. A scalable infrastructure will help in facing unpredictable situations and enable GICs to streamline internal team structures to optimize new strategy and business model
- Investing in the talent pool
Development of internal talent, prioritizing diversity, and the willingness to explore talent from third-party with the required skillsets will broaden the talent pool of GICs. Organizations should consider developing advanced analytics capabilities, such as machine learning to forecast talent requirements and develop a flexible workforce. Virtual talent management is also crucial as a remote workforce presents opportunities to maximize talent engagement and agility
- Encouraging innovation and agility
GICs must bring in distributed agile practices with intelligent decision making to stay ahead of the curve. To support this approach, a culture of innovation and agility is critical. Digital technologies require high levels of collaboration and GICs can create an environment which will enable employees to take the lead in innovation
- Leveraging remote infrastructure and facilities
The COVID-19 pandemic allowed very little time for organizations to adapt to an enterprise-wide remote working environment. Now, as both onsite and remote work is prevalent, it is important to build a secure and reliable infrastructure for greater resilience. GICs must invest in a cloud-based infrastructure, collaborative tools, such as video conferencing and document sharing, and information-security technologies
The Way Forward
The shift from global in-house centers (GICs) into global capability centers (GCCs) requires building a greater breadth and depth of services along with developing a focus on digital transformation and innovation. Leveraging modern technologies can go a long way in changing the face of GICs and can help them achieve higher efficiency, lower costs, improved employee retention, and enhanced business agility.