Cost optimization and employee well-being will be the top agenda for Global Capability Centers in the next 9-12 months – EY survey

cost optimization and employee well-being emerged as the top agenda for GCCs in the next 9-12 months, according to EY’s latest survey. Over 60% of the GCCs surveyed believe that employees who can work remotely without any visible impact on day-to-day operations, will continue to do so for the next 4 - 6 months. Presently, amidst the lockdown, more than 95% of GCC employees are working from home.

The survey incorporates the first-hand perspective of over 100 GCC leaders in India, keeping three time-horizons in mind, the ‘Now’, ‘Next’, and ‘Beyond’ phase.

The survey, conducted as part of the EY GCC Leadership Forum, includes interaction with GCC leaders across sectors including technology, media & entertainment, telecom, banking, insurance, and financial services.

Arindam Sen, Partner, Technology, Media & Entertainment and Telecommunications (TMT)GCCs Leader, EY India said,“So farGCCs have done an extraordinary job of successfully tackling the challenges posed by the COVID-19 crisis and continue to run operations with minimal or no impact to their overall commitments.

As GCCs shift across three horizons, the ‘Now’, ‘Next’, and ‘Beyond’ phases, it becomes critical for the GCC leaders to plan for contingencies, understand the risks, and incorporate regulatory changes into their overall strategy.

The efforts made by the Indian government have been commendable, issuing key notifications and exemptions, thereby, helping to minimize the disruption of services.”

KS Viswanathan, Vice-President, Industry Initiatives, NASSCOM said, “Global Capability Centre’s play an integral role in India’s IT-BPM industry today. Their services expand across verticals touching upon accounting, design, reporting, banking and insurance, and of course digital transformation and technology support.

GCC’s in India alone employs over 1 million professionals and supports over 50 countries in various time zones. It has been commendable to witness the support they have provided to their parent enterprises during this global lockdown while ensuring there are absolute smoothness and continuity in business operations.

By inculcating practices around working from home, building security systems, mentoring support, and adapting to the dynamic changes in this unprecedented time, I am confident that the industry would increase their trust in this model, and GCC’s would play an even larger role in the coming years.”

The ‘now’ phase

According to the EY survey, all the GCCs had planned various engagement initiatives to keep their employees motivated while working virtually.

While some functions saw a decrease in productivity in the initial weeks, as the lockdown progressed and operations stabilized, over 60%of GCCs stated that they are now operating at the same levels of productivity as before, if not more.

Over 40% of the GCC leaders stated that they had already started preparing to telecommute from the end of February 2020. Thousands of laptops were transported to the homes of those employees, who had traditionally operated in a desktop environment; and at least 10% of the GCCs also provided additional equipment such as large monitors and printers. The GCCs that did not have a formal work from a home policy instituted one and, in some cases, even included reimbursement of home internet used for work purposes.

The ‘next’ phase

As per the survey, all GCCs believe that they will not have the entire workforce resuming office at once. At least 10%of GCCs stated that they would only have critical functions operating from the office in the next 2-4 months, while over 60% of the respondents stated that a maximum of one-third of their workforce would be operating from their offices at any given point of time during the same time period.

Subir Mehra, Partner, Financial Services GCCs Leader, EY India said, “Business resilience has become crucial in these challenging times. It provides an opportunity for GCCs to rethink how they can identify, calibrate, and manage risks through process optimization, rationalization, and innovation.

GCCs also need to increasingly focus on digitization, intelligent automation, and cybersecurity. Now with the advent of new ways of working, it requires GCCs to adopt agile working methods and to technologically enable all their employees. Post this pandemic, I envision a much stronger future for GCCs in India.”

The ‘beyond’ phase

Going forward, over 60% of the GCCs have considered a more formal remote working scenario and have initiated discussions around rationalizing their real estate footprint to accommodate this new model of working, and as a result, reduce overall costs of operations.

According to the EY survey, some of the GCCs have also started discussions with their parent corporations on the transfer of additional activities to the center, especially given significant cost pressures in several home markets.