Desi Slice: GCC in India: Global Executive Roles With Compensation of $1Mil +
Seize Opportunities in India's Race to $5T! New Green Shoots After 4 Decades of Deep Roots. Indian offshoring is now an established global industry model. No debates!
GCC - (Global Capability Centers) The New Green Shoots after 4 Decades of Deep Roots
Photo by Eren Arıcı: https://www.pexels.com/photo/a-city-street-with-cars-27788926/
The Indian IT industry has come a long since Texas Instruments set up its first outsourced IT software development unit in Bangalore 40 years ago. Today, India is the global capability center (GCC) hub for most Fortune 500 IT firms, with over 1,600 GCCs employing 1.6 million people and generating $60 billion in revenue.
This number is expected to climb to $120 billion by 2030 with an employee base of about 4 million, as the GCC count is expected to grow significantly. In 2025 the GCC units will be about 1900-2000.
Tier 2 and Tier 3 towns emerge as new hubs
While Bangalore, NCR Delhi region, Hyderabad, Chennai, and Pune were the initial hotspots, smaller towns like Indore, Coimbatore, Vizag, and Bhubaneshwar are now in the spotlight for the next phase of growth. These towns offer advantages like lower costs, talent pool, and infrastructure development.
Quotes from industry leaders
Rahul Atri, MD and President, Rakuten Symphony: "Indore has filed over 300 patents, and software code goes into live production weekly."
Sirisha Voruganti, CEO and MD, Lloyd's Technology Center: "Attracting senior talent is a problem, but it's time to invest in these emerging hubs."
Naved Narayan, VP Mobility Solutions Head R&D, Bosch Global Software Technologies: "Coimbatore has a lovely center with terrific students who are hungry to prove themselves."
Approach and benefits
Set up a satellite center, measure, migrate, and scale to a larger GCC
The talent pool in smaller towns is up 26% from 20-21 to 23-24
Facilities cost 10% less, people 25-30% less
Tax breaks, subsidized land parcels, and infrastructure development make it easier to deal with smaller towns
Major MNC GCC (multi-national company owned Global Capability Centers) by town
Ahmedabad - Bank of America, Kraft and Heinz
Coimbatore - Applied Materials, Bosch, Flex, Hillebrand, Sanvik, Schlumberger, State Street, Vistaeon
Indore - Rakuten Symphony
Jaipur - Metlife
Kolkata - S&P Global
Pune - Amazon, App Materials, Google, MC, Oracle, SalesForce and S&P Global
Universities and Research Engagements with GCC
Anna University, College of Engg Guindy, National Institute of Technology Calicut, NIC Trichy, Amrita University, VIT Vellore, IIT Madras
Samsung Research International Bangalore (SRIB) - 7,500 patents filed in India and globally
Collaboration with universities for research and development is a smart and mutually healthy way to grow and contribute to the local ecosystem.
Three additional things GCCs must do
Allow end-to-end product ownership by dedicated teams in India. This is already happening but has just begun. Over time this will grow and a global ownership of a product line or single product may be a reality.
Engage with Higher Educational Institutions (HEI) - this has started happening too as stated above. But I think the synergy should be mutual - it is also not just about hiring students but also about training younger faculty and bringing them up to speed on the state of the market globally.
I have also seen in the earlier decade that colleges get a couple of hundred thousand dollars worth of lab equipment sponsored by a large MNC (such as Cisco in MSRIT Bangalore) and in turn, perhaps they get preferred first day of pre-placement hiring and interviewing on graduating batch. Those are lower engagement techniques whose time has run out - these are much more serious academia-industry relationships with significant stakes both ways.
Contribute to the Indian deep tech innovation engine by promoting or working with startups - this I have not seen too much so far. Some investments happen now and then (far too low a number) and (what can you do if the quality of projects being done is poor anyway). This is another area that can improve significantly.
Build Own Transfer The Model:
It is interesting to note that the stalwarts of the Indian IT offshoring revolution - the companies that worked hard for decades to prove to the world that mission-critical software development and maintenance was possible from off-shore locations at a fraction of the costs were - Wipro, TCS, Cognizant, Accenture, Infosys, and others. Through the ‘90s and last two decades, these companies created the industry of IT offshoring by pitching these models to the very same global MNCs who now build and own their captive GCCs today.
This is a good thing and is a clear demonstration of how a national resource such as human capital and knowledge worker base can be harnessed to create long-term cash cows that benefit all.
The GoI Enablement Helped:
The government’s infrastructure push with thousands of miles of highways, bridges, and toll plazas, airports in smaller towns, second airports in larger cities, train stations, and intra-state highways has also helped beat crowding out of all IT industries in Bangalore and spread it out to other cities. The second level of migration and fanning out is now happening as smaller towns begin to take over the next level of growth.
The government’s tax breaks, and easy availability of land parcels for data centers and IT parks for example have helped too.
MNCs Are Sinking Their Roots Deep
Schlumberger for example had an earlier IT center in Pune (which it retained) but after an M&A of Cameron a local engineering outfit in Coimbatore, now has an engineering hub in the south that both offsets the risk as well as caters to local sourcing and hiring that is cost-beneficial and creates a healthy diversity.
Samsung Research Intl BLR SRIB is the biggest Engineering R&D outside of Korea.
SRIB has a working engagement with VIT to develop Hindi for AI and SRI NCR has a similar engagement with IIT K for Gen AI cloud. SRI and an academia-industry working relationship with IISc for Semicon research are helping drive cutting-edge work in semiconductor chipset development for global markets.
Siemens has a focused effort on Advanced capabilities in GCC -Data Science and AI LLM work undertaken in India
Amazon India Engg R&D GCC is working on Deep Learning Models in multiple areas for retail and industry.
MNC IP Spin-offs Create New Startups:
Interestingly such initiatives are also powering spinoffs of unique IP that might become successful startups in their own right. A good example is what happened with Shyam Vasudev Rao -ex-ER&D GCC Philips - and the spin-off of Forus Healthcare AI-infused retinal imaging devices, now a global innovator with over 500 employees in Bangalore and selling products worldwide.
Also contributing to the Indian deep tech innovation engine by promoting or working with startups, giving access to cloud credits, labs, and test environments where possible, subsidized licensing, and policy inputs to governments.
Destination India When it Comes to GCC :
Chevron also recently announced its $1Bil investment in setting up a BLR (Bangalore) GCC and bringing in 600 new engineering staff to power their research and development efforts.
From JP Morgan to Chase, to GE Aerospace and TI, about 60% of GCC staff in India are working for US MNCs. This is an ample demonstration of how well the model is now entrenched.
JP Morgan
60k tech staff worldwide of which 20k in Bangalore
20k out of 55k in India
Goldman Sachs
8500 staff in Hyderabad and Bangalore -12O business functions from here in business and technology
Mind-blowing Compensation Plans for the Right Candidate:
Global roles from GCC in India are expected to increase from 115 in 2015 to 30k in 2030!
And nearly 100 India GCC heads are currently at an annual compensation of $1 million including stock and perks. This kind of compensation has never been seen before. No wonder luxury homes (as shown in the picture below) all kinds of luxury products, and living/holiday options are opening up a new-rich lifestyle for a select few. But that number is growing too.
Villa Community in Bangalore that houses many CXOs and expat workers
These rosy positions are:
India-based site leaders, CxOs, country heads, India-ops in charge, VP of tech, VP of Asia, Sr VP of product line, Sr VP of South Asia, and several others. The scope and coverage for these roles are either regional or global and report to the corporate HQ in the US or Europe.
I am noticing that new programs and executive courses are being launched in the premium management schools perhaps to assist in grooming or developing courseware and learning options for such roles which typically were non-existent in earlier growth waves of the IT industry that took it from zero to $200 bil + in the last few decades.
Closing Note:
So the story is a deeply entrenched industry model of offshoring has now reached a notch higher in terms of quality and type of work that could be outsourced. No longer a supplementary support team but now a responsible mainstream team that is also capable of making its own decisions in line with corporation objectives.
This means a freaking big deal for all of you Indian-origin senior executives who have been looking to bring your collective global experience and wisdom to work back in India or to straddle between the two and enjoy the best of both worlds.
The money is good and lifestyle gaps will probably drop further and still give you the goodness of home :)!
In any case, I am happy to bring you local news that matters to our proud and capable India diaspora or just anyone wanting to reconnect with a new wave of growth that will hit $5T!
Get your desi slice!!!
Owner: Sridhar Pai Tonse - Tonse Pai Academy.
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Thank you for this insightful post. I learn a lot from your knowledge, experience, and observations. Great to find you on Substack.