Going Global - Grow your Accounting Firm

Building Your Global Advantage - The Rise of GCC's

• Arun Mehra • Season 2 • Episode 1

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The global business landscape is witnessing a revolutionary shift as UK firms increasingly establish their own Global Capability Centers (GCCs) in India. This strategic move transcends traditional outsourcing models, creating fully-owned innovation hubs that align perfectly with parent company culture while leveraging India's exceptional talent pool.

As Arun Mehra, CEO of Samara Global, explains in this eye-opening discussion, GCCs have evolved dramatically from mere back-office operations to comprehensive capability centers developing cutting-edge technology and AI-powered solutions. With over 1,700 active GCCs generating $64 billion annually and employing 1.9 million professionals, India has emerged as the premier destination for companies seeking global competitive advantage.

What makes this trend particularly exciting is how it's democratizing global operations. While GCCs were traditionally the domain of multinational giants like Rolls-Royce or Google, they're increasingly accessible to small and medium-sized enterprises. The webinar reveals how a typical GCC setup takes just 90 days with the right expertise, offering complete control over operations, culture, and innovation that outsourcing simply cannot match.

The discussion explores fascinating developments in the GCC landscape, including the rising popularity of tier-two cities like Coimbatore, which offer lower costs, reduced attrition, and abundant talent. You'll discover why companies across diverse sectors—from healthcare to automotive to technology—are establishing specialized centers focused on AI, software development, and engineering design.

Whether you're considering global expansion or simply curious about this transformative business model, this conversation provides invaluable insights into how GCCs are reshaping the future of work. Download our free guide at SamaraGlobal.com/global-capability-centers-for-accountants to learn how we can help you scale your business with your own Global Capability Center.

Speaker 01:

Okay, hi everybody. Welcome to this live stream of our first of seven webinar series. I'm here with Arun Mehra, CEO of Samara Global and Deep ak Madolia . How are you guys today?

Speaker 00:

Hi, Arun. All good, thanks. All good. All good.

Speaker 01:

Well in our first of seven webinar series today, the first thing we're going to be going through is, well, as the title you can see is why UK firms are building their own GCCs in India. So, guys, if you could give me like a short and sweet answer for the audience, first off, what is a GCC and why are UK firms going to India for this?

Speaker 00:

Okay, let me give my my kind of tuppence worth. Okay. So hi, I'm Arun. And we only saw just last week, I think Rolls-Royce, a large UK company, announced that they're going to do a GC, they open up their first GCC in Hyderabad in India. And so what does that actually mean? So historically, GCC's global capability centers is what it means, is that they were they would be allowed to they would be their back office effectively. Okay. Accounting, HR, the back office type of stuff would be happening, basic processing work, that type of thing would have been historic. But now what we're seeing is that organizations from the UK and other countries across the world are going to India to not just have their back office but their whole capability run from there. So you have organizations developing technology, doing engineering designs, you name it, everything is now happening at some of these GCCs across India. And historically, it's always been for some of the large corporates across the world who've been doing this, people like Ford or Renault or Mercedes-Benz or the Googles and Amazons of this world. But now it's becoming more amenable to smaller organizations because the struggle to hire manpower in the West, the cost of manpower, the um the challenges of manpower. So India is perfectly positioned with a young workforce, a skilled workforce, an English-speaking workforce to really support many organizations globally. So I personally see the growth of GCCs as a is a big area. And I think with the recent announcement by Trump about H1B visas changing in America, I think more and more US corporates will think, you know what, um, we don't want to spend that hundred thousand dollar fee. Um we're gonna say, well, we're gonna just operate more from India.

Speaker 01:

Okay. Deepak, what about you? What's your understanding of GCC?

Speaker 02:

So just adding to that, uh, the transition from the back office to the innovation hubs as we see GCs today and the future. It is all driven by AI cloud computing. We have the infrastructure, the economic structure, the policies in place. But this transition is very beautiful, you know, from back offices to innovation hubs. Now India is being seen as a leader, as a leader of uh, you know, uh cloud computing, as a leader of uh providing cost-effective solutions as it has been traditionally. But uh at present, or the future outlook is above, much above the cost. Now India is not seen as a low cost-effective center, but it is seen as an uh you know, center who is center of excellence, I'll say rather, who can produce future leaders who can help in innovation, in tech support, AI. So it's huge, it's huge. Uh the opportunities are huge.

Speaker 00:

And I think the key is in the word capability, okay? They're called capability centers because there's capable people out there. And I think that's that's the key message. Before it used to be seen as outsourcing, ship off the low-cost work. But things have changed over the last, well, five, 10 years rapidly.

Speaker 01:

Okay. I mean, we also, like you mentioned, I don't know that Rolls Royce has set up their own GCC in India. We recently also had DAZN, a famous streaming c in the UK, set up in Hyderabad for their tech operations and also for, I think, also for other back-end services. So, with that being said, guys, we mentioned India as well, a market right now that's currently growing and growing each day with new businesses coming up every day. So, what is the current market right now when you look at it? How big is the GCC industry? And where do you why do you think a lot of people just want to come set up in India, whether it be a tier one city or whether it be a tier two city?

Speaker 00:

Okay, I'll give you my so good deeper. You go for it. You go.

unknown:

Yeah.

Speaker 02:

So uh as we can see on the screens, you know, the the GCC market, it's not a market which evolved, which uh is uh the current topic. So GCCs have been in India from decades. So as of now, as we talk, there are more than 1700 active GCCs across India, spanning across India from uh major centers, cities like Mumbai, Bangalore, Hyderabad to tier two, tier three cities. And in terms of revenue, if we talk, so they the revenue, the annual revenue is far, far ahead, you know. India is far ahead the curve. So 60 uh it's more than 64 billion dollars, the current annual revenues from these GCCs. And then, since as we talked about that, India produces, uh, has the uh youth have the capability, the capability to work, the task force. So more than 1.9 million professionals work under these GCCs. And it it does not end here, it does not end here. I see the outlook and the reports, the NASCOM, the FICI, the global reports, if you uh go through. So by 2030, the projected revenue is 120 billion dollars. It is expected to cross 120 billion dollars. So it's it's it's a huge impact and huge market. And uh, you know, uh uh if you talk about the new GCCs coming over, uh offshoring uh companies, foreign companies setting up new GCCs in India. So 70% of the new GCCs are being established in India. So it's it's a huge market and a huge uh uh the world sees a huge capability in India.

Speaker 00:

Uh 100% agree there. And I think something to add is these statistics I think are kind of um just some kind of headline numbers, but and these 1700 are probably large companies that you might hear on day-to-day, such as the Mercedes-Benz, the Rolls-Royces, that type of thing. But the reality is that there are many smaller, medium-sized businesses across UK, US that are already have their own little operation, like ourselves, really. We have our own GCC that we've set up over the last few years. Um, but I'm sure we're not in that 1700 number. So, the what we've seen historically are the large corporates doing it. Now the opportunity is really in the middle market, in my mind. Um, that's where the opportunities for these businesses that want to have a global team to support their business for growth, that's what they will do. They will set up a GCC in somewhere like India.

Speaker 01:

Okay, so that's a I mean, that's an impressive insight. Another thing I also want to ask was we have a lot, it's not just a one specific industry that's going to India. It's not just automobiles, it's not just tech, it's also accounting firms, it's also fashion, fashion like they're not just opening up an entire company there, but it's also small, small departments in various cities across. So if you as a if you as a person were to advise someone to open up a GCC, does it matter about does the sector really matter, or does it it's just based upon can you find the people?

Speaker 00:

Yeah, let me get give you a quick example. Uh we we if you look at last week another company, HCA Healthcare, US healthcare business, opened up a GCC in India. And that kind of is a massive healthcare organization in America. Now they're in the Indian market with their GCC, not operating in India, but having the GCC to support their US business. Um, so I think it goes across all industries, okay. All industries have a finance team, all industries have an innovation team, all industries have perhaps an AI team now. Um, and they're kind of looking at India at the talent bottom line to find and use, okay, in their businesses. Um, so I think it's not restricted to any particular industries at all, Praju. Really isn't.

Speaker 01:

Okay. And another thing I would say is like when a lot of people hear about GCCs, you hear back office, you hear stuff like that. Kind of sounds something similar to outsourcing, o offshoring. So when you compare outsourcing, offshoring and GCCs, what would be the difference? Like you would explain it to somebody just to make it a bit more clear.

Speaker 02:

So uh I'll I'll take the lead on this, and then uh maybe Arun can add on the view. So uh as as I started with saying that uh GCCs are being seen or India offices are seen as an innovation center rather than a cost center, right? A cost-effective center. So the the main differences, the main differences is first, I think is the culture alignment. You know, you can have a third-party vendor, you can outsource your work, but that culture alignment, the vision and the mission of your entity, of the companies, of the uh you know, foreign company does not align with that of the outsourcing firm. Wherein we see hiccups, we are wherein we see uh disengagements, unsatisfied team members, uh then comes the control. You know, uh if I if I if we go uh if we talk especially about the different sectors, about the GCCs and how they you know are different from outsourcing. The first is the first and foremost is the control. You have 100% control of your GCC, you know.

Speaker 00:

Uh you because you own it effectively, your US or UK company will have a hundred percent stake in the business in in India. That's that's the key because you have that means you have full control, right?

Speaker 02:

Okay, and you can you can align the efforts to achieve your mission and visions, you can be uh more focused and aligned, and the and the teams in the in the home country can more focus on business development, getting the you know, right set of clients can focus uh their efforts there.

Speaker 01:

Yeah, so basically, it's like so. If you can basically tell a US or UK company, a GCC model is where you have more control than in an offshore setting. You have more control and you also have more influence as to what goes on in and around the company and also the people that come in and come out.

Speaker 00:

Absolutely. So if you look at someone like um Rolls-Royce, they will own their whole entity in India, I imagine, okay, and they'll have control and they'll have well, they'll have people working on Rolls-Royce projects or working on between countries, um, and they control it. It's their bit it's their whole ecosystem. Whereas on the whole offshoring and outsourcing model, it's still with a third party you're dealing with, okay. And now for smaller organizations, that third party arrangement probably works, okay. But now, as we've said earlier, the the scope is for these smaller organizations to say, well, hold on a minute, I want to benefit from really from the GCCs, and that's what when that when when that when that happens, they realize that it's a thing. Well, I don't really want to go down the outsourcing model because the cultural alignment is in there, all these things, I want to set up my own, and that's again when we can kind of get involved and help.

Speaker 01:

Okay. So, in terms of also like the as we can see in the slide here, the evolution of what GCCs are right now and the direction it is going, it's now, as the book said, they're becoming innovation hubs, strictly innovation hubs. You are as mentioned over here, it's an AI-powered solution or like an AI-powered GCC over there. As many of you may not know, we recently opened up a AI GC, in Coimbatore maybe about two months ago, with our own uh team functioning over there, creating AI solutions. So, Arun, that was your vision. That was something that you wanted to do for yourself. So, and in terms of like, let's say the whole direction the world is going with AI, is setting a GCC specifically for AI something that you think a lot of companies should do in India?

Speaker 00:

In a nutshell, yes. Okay, yes, yes. Okay, India is a country full of smart engineers. Okay, they just perhaps need some um understanding of what the problems that uh businesses are facing across the world. Um, and there then they can solve those problems using software and um and and their engineering talent. Okay, so our AI center that we've set up is solving problems that we've identified in our businesses in the UK uh and beyond, and therefore we're using talent and teams and building an amazing team out there that will support um accountants, um, even dentists, to be honest, yeah, other dental businesses, so in those sectors that we operate in. Um and I think it's it's it's it's it's the and with this as I mentioned with this change in Trump's attitude, and um less engineers will be going to America, I imagine. Therefore, there'll be even more talent sitting in America in India to find to help people build their own GCCs as well, especially in the AI front.

Speaker 01:

Well, if anybody, if any AI engineer is actually watching this, well, this could be your calling card, guys, to set up your own maybe back office for another company in India and just offering your services out there. And another thing, also, Arn, like you mentioned HCA, the healthcare business that opened up. When someone thinks healthcare opening up a GCC in India, what departments would you normally think they would open up for?

Speaker 00:

Yeah, so good question. So initially, though, they would I imagine they open up to the back office function. So things like the accountings, um, things like the insurance payment processing, things like the billing, things like payment accounts payable, all that type of stuff. But then really they could be looking at developing um software tools, technology, um, all that type of stuff to improve the uh patient journey, maybe in the US. Um the sky's the limit, to be honest with you. You could be also running marketing teams out of India, like we do. We have our marketing, a lot of marketing team members doing um video editing, video content writing, you name it, they're all based out of India. So, what's stopping anyone else doing that as well? That's that's the whole point. That's what I'm trying to get across here. It's not just limited to one function, it's across the board. And beyond HCA, it could even be things like they might want to develop, I don't know, uh hospital designs and that type of thing. That's why not, you've got architects, you've got engineers, you've got everyone in India that could capable. Perhaps they just need to understand some of the rules, but it's possible. I I know car companies that are sold, cars that are sold in Europe, in France, Renault, I believe, and they're designed in India, okay. Um, in collaboration with some of their French colleagues, but a lot of it's designed in India, as an example. So we are at a stage where we're in a global workforce, and whilst people are trying to put barriers up, or certain people are trying to put barriers up, these barriers won't last forever in my mind, and uh the the ultimately the the the the the cream will always rise to the top, as they say, and people the the skilled talent will be on it will be available on a global basis, and a lot of that talent sits in India.

Speaker 01:

Okay, I mean that was actually a great insight. Go ahead, Deepak

unknown:

Right.

Speaker 02:

Just to add in continuation to what Arun said, that you know, uh no business, no burn businesses hunters with AI. So we do bookkeeping, we use AI tools to process invoices. We in fact nowadays people have been using chat GPTs to infinite in fact frame their emails, right? Uh edit CPTs, we have gamma, we have various softwares, video editing, everything. We have various so first of all, no business is hunters with AI. And as Arun Rand, you rightly said that we have our own AI center in Combat 2, CP Center U1. We are exploring that. We are exploring opportunities, right? And and then then comes, of course, we were talking about the skilled mindset. So India, India produces thousands of STEM engineers every year. So here lies the opportunity. UN Trump, as Arun already mentioned, Trump increasing the H1B visa. We recently over the last week, we saw that he's been increasing. And the global the global market says that why to why to you know hide someone and bring him to America, why not be shift the trend to remote teams? COVID has taught us that. The world has been working remotely. So this this is the new trend, and and uh I firmly believe that this will have a very huge impact on the emerging GCC.

Speaker 01:

Well, we'll see by 2030, I guess. We'll have more and more companies coming towards that direction. And in terms of how India now remains a premier GCC destination purely because of the skill force that's there, because the amount of people that want opportunities and also with the, I would say the amount of resources available. Arun, you started this, let's say a few years ago when you decided like to open up a couple of departments in India itself, in Delhi, with a couple of teams for accounting, marketing, now AI. What was the vision? Like, what made you think at that time to go in this direction?

Speaker 00:

I'd always had a we'd always worked with various Indian parties historically, okay. And we'd had mixed success, to be honest with you. Um, but I think the the the challenges of running a firm or businesses in the UK and the industries that we were in, um, with the talent that was available for the price point, the first step was to go with the view to find great talent at a reasonable price, okay? But once you get into that market, you then realize, oh my goodness, um, it's not just this I can do, I can do that, I can do this, this is possible. And suddenly your eyes open up to like, oh my goodness, I didn't know I could get people who could do this, I didn't know I could get people who could do that. So suddenly you're developing and building on um building new departments with new people, with new skills, um, which is very rare to find in perhaps in Western countries. And and the only organizations that can typically do that in Western countries are large, large corporates with much bigger pockets than say who than me, who's a small to medium-sized business. So it's been uh I had a question earlier today on an earlier webinar, and I said, Well, what's the one thing that's transformed your business in the last 25 years? Honestly, India. Okay, India's transformed it, but not when I just did outsourcing, that was just a temporary step. It's when I immersed myself into India, when we set up our own GCC, and when we have team members dotted in the UK and India um working, and they're all part of one organization. Deepak, anything to add on?

Speaker 02:

No, as rightly Arun said that outsourcing, uh, you know, the business really topped up when we set up our own GCC in India. Outsourcing can, of course, be a temporary solution. You can have a temporary solution. But you if if you have the longer vision, if you have the longer side, I think GCC is the only solution because then the teams, the people working with you, they have a the headquarters and the offshore team or a GCC team, they have similar vision, they have the same vision. You know, you can align your vision, you can align your efforts, and which is often not seen with the outsourcing partners. Uh, there are we can, you know, we have plenty of plenty of uh uh areas wherein uh there are shared resources working on different clients, then there is high iteration because you can't you can't create the culture, the culture is embedded by the outsourcing partner. Yeah, for your teams, you are in full control to create policies. If one is not working, you can modify that, you can modify the policy. So it is in your hands to create that culture, and of course, then you can add value to the team members working for you, which is the foremost important thing.

Speaker 00:

Yeah, and I you're right. The culture is something that when you're outsourced, you have no zero control over that. Whereas now that we have control over our organization across the UK and India, the culture we're trying to set is the same, and that comes from the leadership team. Um, and we try to hold ourselves to a high standard. But if we're working with a third party, we have zero control over that.

Speaker 01:

So the company has full control of the culture that's being set, they have full control of what's happening, they have full control of the workforce that's coming in, and they also have full, I would say, freedom to set up anywhere, whether it be a tier one or tier two city. So that's the next thing we have to go into. A lot of people, when they look at GCCs, they're being set up in Bangalore, Chennai, Mumbai, Delhi, all these areas. But now tier two cities are also on the rise. Coaching, Corridor, all these places.

Speaker 00:

Yeah, yeah. So this this is this is where I think where um large organizations will go to things that where they feel safe. They'll go to Bangalore, they'll go to the Hydro Baza, they'll go to the big cities. But um, I don't think that's the smart move, to be brutally honest with you. I think the smart move is in the smaller cities, the tier two, the tier three cities. Firstly, obviously, costs are lower, there's less less attrition, okay, um, team members. Um, and um, you find amazing talent in those places. Um, and we're finding now infrastructure improving in all of those places as well. So I think um whilst you might set up your first, what we've seen with some of the large organizations, they set up their first base in one of the big cities, such as Hyderabad or Bangalore, then they realize, oh my goodness, it's a a challenge. Then they start opening up secondary sites in smaller cities like Coinbattle, like Coach in various places. Okay.

Speaker 01:

So, and if a company were to set up a GCC in any of these cities, what's the skill level that let's say, regardless of the industry, what's the skill level that people should be looking at to set up GCCs in these specific cities? What skill set? Is it AI? Is it is it cybersecurity? Is it marketing? Is it HR? Which one is it? Maybe you know better than me.

Speaker 02:

So actually, just in continuation to what we discussed earlier, so who are the people uh working in tier one? They are the people migrating from tier two and tier three cities because they do not have those opportunities in their home states or home cities. So if if the if more and more centers are open to GCCs, companies set up centers in tier two, tier three cities, so they will be competing with tier one pop population because the people are the same. The people are the same. People people come out from their home cities to study, to work in search of opportunities, and if the opportunities reach to their home, so why wouldn't one leave that? Now, coming to these skill sets. So, since uh working in a globalized environment and working for clients across the globe, UK, US, uh, Norway, Denmark, anywhere. So, first of all, you know, uh, of course, you can get a uh AI engineer, you can get a dinner scientist who is very proficient in his core field in preaching side of things. But the key sets will of course be uh fluent English speaking, which uh you know the Indian the Indian youth has the correct mindset, the attitude, because the skills can be taught, but the mindset, the attitude cannot be taught. So you have to look for that, the correct mindset, the English speaking uh uh population, then the AI, AI efficient, people using uh people being tech-savvy using new tools, and then the hunger. You know, the hunger to grow, the hunger to innovate, the hunger to discuss ideas, to reach at the top. And this is what makes tier two and tier three cities more attractive. The the infrared is improving, no doubt. The government is really pushing up, giving different incentives to these tier two, tier three cities for companies setting up GCs there. But then the correct mindset, the tech savvy population, as India is one of among one of the uh youngest uh countries in the world. So tech savvy uh fluent English speaking, then you have AI-driven people, people who have hunger to grow and to you know succeed. I think these are some of the key skill sets we need to see.

Speaker 01:

Totally agree. So, based on what you guys have said throughout the entire session so far, when someone looks at this and they're like, Okay, I'm I'm curious to know how I can set something up like this in India. I'm curious to know what the process is going to take. And based on the transparency of what you guys have been and what the vision could be for my company or for me looking to set up something, what is the process? Like, and how will we go about this? And what's the duration of actually setting something something up like this in India?

Speaker 00:

Okay, so I I I'll give you very short answers. DPUC is more the man of the expert here, but it when I set up my own GCC back in back in a few years back, it took much longer, okay, because I didn't know what I was doing. Um, but we learned through that process. But um, because there are legal issues, there's um ownership issues, but if you're based overseas, there's director issues, all these things that come um which were kind of all new to me, okay. But once you overcome all of those things and have a team who can actually support you to address these issues, it's a relatively simple process. It's just having the right people in the right place. When I did it the first time, I didn't have the right people, I was just learning how to do it. But now we've built a team um and we can happily execute on this for other people looking to do this in India. Deepak, maybe you can shed a little bit more light on this.

Speaker 02:

Yeah. So as Arunuli rightly said, that uh when the uh our own ECC was set up, there were hiccups. Uh so back then, if we talk about 22, 23, the infra, the policies were not in so much, you know, they were not simple, they were not so transparent. Now you have dedicated portals for opening GCCs. Many states have come up for them. We, as we have learned from the process, as we have uh, you know, with our own hands opening our own GCC. So now we are experienced. Uh taking the time frame as you were very precise on the time frame. So uh we start the process, it is pretty simple. We start with a feasibility, you know, the call. First, we have the consultation call, we understand the requirements, then we go for the feasibility study, whether operating or scaling uh operating your own GCC would be cost-effective, beneficial in the long term for the organization or not. Then comes the part wherein we give a blueprint of the process, what services you want to onboard, what is your vision to open your GCC, what are the requirements, what core of sales skill sets you'll need the people. Uh, typically the the whole transition takes around 90 days or three months, and we divide it into three parts. First is 0 to 30, wherein we uh do the feasibility study, the groundwork, uh, do these uh you know, maybe the site selection, the infra, the people, uh uh, the uh leadership hiring. Then we move on to the second range wherein we shape what is on the papers. We give your entity a name, we give your entity a legal incorporation, the the most, the most uh you know used uh legal entity in India is private limited company. So we form a hundred percent owned subsidiary of your foreign company in India, and then then comes appointing your directors, supporting you to obtain different registrations, etc. The last stretch, uh, since we'll be talking in detail in coming webinars about each step in depth. So this is just a quick summary. The last stretch, which is around uh you know 60 to 90 days, we aim to go live. We aim to hire processes, we aim to go live. Uh, we also provide support in terms of policy drafting, in terms of uh cultural alignment, you know, people, people uh the HQ team in UK or US can have different mindsets. So we try to align, we host activities, we do corporate activities, we help and train the team here to align with the headquarters team. And then from 60 to 90 is also a period wherein you we can assess the initial. We you call it the initial assessment period wherein you can assess the uh effects and you you you see the results, you get to see the results.

Speaker 00:

So I think 90 the uh 90 days is our target day to get something set up. Obviously, there may be variables at play here, but it's a realistic target. Um, but it'll depend on various issues, legal issues, or various parties that maybe in the UK that needs to make decisions, and sometimes these things slow it down. But I think a 90-day window is a reasonable amount of time to get it off the ground.

Speaker 01:

So, in 90 days, guys, you could probably have a department set up in India or could be an entirely new company, that is also possible. So, with that being said, thank you for both of you for your clarity and your time for explaining to the public about what a GCC is and what the next wave is going to be. For more information, guys, for anybody who watches this later on or who is watching this right now, if you can head to SameraGlobal.com slash global capability centers for accountants. We have set up a guide that shows you the 90-day process of what it takes to build up a GCC, basically what Deepak and Arun have just said. And it's free to download. Nothing further, nothing further will be asked for. Have a look at it. and to our future clients, we're right here. We're not going anywhere. And we're help, we're willing to help you scale if you just give us the time. 90 days is all we ask for. Thank you.

Speaker 02:

Thank you,