The decision to spread shared services operations to offshore locations is mostly driven by factors such as low labor costs, availability of skilled talent, language proficiency, and availability of seamless connectivity infrastructure. Throughout the last decade, few hotspots like India, Eastern Europe & APAC have emerged as unique destinations for SSCs, given access to a growing ecosystem of matured SSCs.
Particularly in India, the abundant availability of skilled talent and cost advantages has resulted in the setup of hundreds of global business captives. These kinds of R&D & Support centers were first built in the 1990s with a trend started by Texas Instruments & GE; earlier referred to as captives, then as GICs (Global In-House Centers) and now as GCCs (Global Capability Centers). These centers were not much prominent at that time and most of the IT buzz/exposure was directed towards major IT Services giants such as TCS, Accenture, IBM & Infosys, etc. There were few operational challenges for SSCs then despite the initial success and we had seen few captives being shut and local units were sold to IT vendors. The notable ones were Citibank’s technology unit & UBS which were acquired by Wipro and CTS.
With the slowing down of the IT outsourcing market, SSCs have again gained importance and enterprises are trying to establish CoEs, R&D Centers & captives for BPM & IT services. The initial success of SSCs has positively helped companies to expand the scope of shared services initiatives, bringing in knowledge-based processes apart from transactional processes and adding more service lines into SSCs. Along with the technology sector, BFSI companies started setting up captives in India. With the creation of this ecosystem – manufacturing, engineering, industrial services, healthcare, and telecom industries followed the trend and opened multiple SSCs in India.
India is today the world’s most prominent location for setting up SSCs and the majority of Fortune 500 companies have set up their own captives in India.
Number of GCCs/Business Captives – 1550+
Number of Employees – 1.3 Million+
Revenue – $ 30 Billion