#TNGIM2024 Podcast Series: Future of Growth | Balaji Nuthalapadi | Episode 02
Summary
TLDRIn the 'Future of Growth' podcast, host Yar engages in a dialogue with Mr. Balaji, MD of City South Asia, on the role of Global Capability Centers (GCCs) in India's economic growth. They discuss the evolution of GCCs from cost efficiency to innovation hubs, their contribution to talent development, and the strategic alignment with global financial institutions. The conversation highlights Tamil Nadu's favorable business environment and skilled workforce, emphasizing the importance of balancing global standards with local adaptation for the GCCs' future success.
Takeaways
- 🌟 Global Capability Centers (GCCs) have significantly contributed to economic growth, with over 1,600 centers in India employing more than 1.7 million people and growing at a CAGR of 12-14%.
- 🚀 The evolution of GCCs has transitioned from cost efficiency to talent utilization and now focuses on innovation and transformation, playing a crucial role in the digital journey of companies.
- 🌐 City Group's presence in India for over a century has been marked by pioneering the use of local talent, with 30,000 employees across five cities, supporting various global functions.
- 💡 Tamil Nadu's favorable business environment and skilled workforce make it an attractive location for GCCs, with City Group having a particularly strong presence with over 10,000 employees.
- 🔄 The balance between global standardization and local adaptation is crucial, with GCCs maintaining global best practices while adapting to local needs and engaging with local communities.
- 🌱 The GCC sector is expected to continue growing, potentially employing 4 to 4.5 million people by 2030, indicating a significant impact on India's economic competitiveness and talent ecosystem.
- 🌐 GCCs enhance global competitiveness and export capabilities by connecting local talent with global projects, placing Chennai at the center of the global digital economy.
- 🔑 The future of GCCs is bright, with a projected increase in their number and the potential to upgrade the quality of talent in India, fostering partnerships, and increasing global attention to India.
- 🏆 Challenges for GCCs include the need to quickly upgrade competencies in areas like cybersecurity and to focus on developing soft skills and leadership capabilities among employees.
- 🤝 Active collaboration with local authorities, regulatory bodies, and educational institutions is essential for GCCs to thrive and contribute to the local ecosystem.
Q & A
What is the role of Global Capability Centers (GCCs) in economic growth?
-GCCs have significantly contributed to economic growth by creating scale and synergy, employing over 1.7 million people directly and several more indirectly, with a growth rate of 12 to 14% CAGR. They have also created global linkages and contributed to the knowledge economy and talent ecosystem worldwide.
How has the concept of GCCs evolved over the years?
-The concept of GCCs started with cost efficiency, then matured to focus on talent and scaling up for critical mass, and is now in a phase where they are driving global platform development, application development, and transformation across the enterprise.
How does Citi Group leverage its presence in India for global operations?
-Citi Group has been in India for over 100 years and has been a pioneer in leveraging the Indian talent pool. It has 30,000 employees across five cities in India, supporting global operations in technology, finance, risk, and analytics, and is now exploring non-traditional areas like legal compliance and model risk management.
What are the strategic priorities for firms today, and how do GCCs in India contribute to them?
-The strategic priorities for firms today are digitization, simplification, and customer experience. GCCs in India are uniquely poised to drive transformation in these areas, with a pool of talented young technologists and strategic scale in finance and risk analytics.
What advantages does Tamil Nadu offer as a location for GCCs?
-Tamil Nadu offers a deep talent pool, including high-quality engineering talent, good operations managers, and leaders with strong commerce and accounting skills. It also provides a favorable business environment with an emphasis on ease of doing business and strong industry partnerships with academia.
How does Citi Group balance global standardization with local adaptation?
-Citi Group maintains global standardization in processes, platforms, and ways of operating while adapting locally as required. This includes local engagement with employees, colleges, communities, and the market, providing employees with the best of both worlds.
What has been Citi Group's experience with the ease of doing business in Tamil Nadu?
-Citi Group has found Tamil Nadu to be extremely supportive, with a good partnership from local players across the regulatory and private ecosystem. The state has been proactive in fostering interactions between GCCs, colleges, and non-traditional ecosystems, and has been helpful in developing the overall ecosystem.
How do GCCs contribute to enhancing global competitiveness and export capabilities?
-GCCs contribute by sharing employment, adding value to the kind of work done, and connecting regions better to the global economy. They have placed cities like Chennai at the center of the global digital economy, reflecting an upgrade in the quality of roles and the impact on corporates worldwide.
What is the future outlook for GCCs as a growth engine?
-The future of GCCs looks promising, with an expected growth to more than 2500 GCCs in India with 4 to 5 million employees by 2030. They are expected to continue upgrading the talent ecosystem, increase focus on innovation, and bring in lateral investments across sectors.
What are the primary challenges faced by GCCs and how can they be overcome?
-The primary challenges include upgrading competencies quickly, especially in areas like cybersecurity, and focusing on soft skills and leadership capabilities. Overcoming these challenges requires enhancing functional capabilities and placing more emphasis on developing interpersonal and leadership skills.
Outlines
🌟 Introduction to Global Capability Centers (GCCs)
The podcast 'Future of Growth' hosted by Yar introduces Mr. Balaji, the Managing Director and Head of Operations and Technology at City South Asia. The focus is on GCCs, which have significantly contributed to economic growth, particularly in India. Mr. Balaji explains how these centers have expanded rapidly, employing over 1.7 million people and growing at a rate of 12-14% annually. The conversation highlights the evolution of GCCs from cost efficiency to talent utilization and innovation, emphasizing their role in driving transformation across the enterprise.
📈 City Group's Journey and Role in GCCs
City Group's experience in India, spanning over a century, is highlighted with a focus on technology and leveraging the local talent pool since the 1980s. The company now operates five GCC sites across India, employing 30,000 people and supporting various global functions. The discussion delves into how City Group's strategic priorities, including digitization and simplification, are deeply embedded in their operations, with Indian talent driving technology transformation and contributing to analytics, finance, and risk management on a global scale.
🏭 Tamil Nadu's Advantages for GCCs
The state of Tamil Nadu is recognized for its favorable business environment and skilled workforce, making it an ideal location for GCCs. With over 10,000 employees in the region, City Group has benefited from the high quality of engineering talent and strong industry-academia partnerships. The state's supportive ecosystem and ease of doing business are emphasized, along with the positive experiences during the COVID-19 pandemic, showcasing the proactive measures taken by local authorities to ensure business continuity.
🌐 Balancing Global Standards and Local Adaptation
The conversation explores the balance between maintaining global standards and adapting to local conditions within GCCs. While processes and platforms are standardized globally, local adaptations are made to engage with employees, colleges, and communities. This approach ensures employees benefit from global best practices while feeling connected to the local ecosystem, contributing to the aspirational nature of working in GCCs and their seamless integration into the global economy.
🚀 The Future of GCCs and Economic Growth
Looking ahead, the future of GCCs is envisioned to be even more impactful, with an expected growth to over 2500 centers employing 4 to 5 million people by 2030. The sector is seen as a new growth engine, not only employing talent but also upskilling the workforce. The focus will be on enhancing functional capabilities, soft skills, and leadership, positioning India as a global center for talent and innovation, attracting further investments and increasing global visibility.
🤝 Challenges and the Path Forward for GCCs
The final part of the discussion identifies the primary challenges faced by GCCs, including the need to quickly upgrade competencies and focus on soft skills and leadership capabilities. Despite the rapid growth and positive contributions, there is a recognition that India needs to further develop cutting-edge expertise in areas like cybersecurity and enhance the overall skill set to produce future global leaders. The conversation concludes with a note of optimism for the continued growth and transformation driven by GCCs.
Mindmap
Keywords
💡Global Capability Centers (GCCs)
💡Tamil Nadu
💡City Group
💡Talent Arbitrage
💡Knowledge Economy
💡Digital Transformation
💡Innovation
💡Ease of Doing Business
💡Export Preparedness Index
💡Remote Working
💡Soft Skills
Highlights
Global Capability Centers (GCCs) have seen significant growth in India, with over 1,600 GCCs employing more than 1.7 million people directly.
The GCC sector is growing at a CAGR of 12-14% and is expected to employ up to 4.5 million people by 2030.
GCCs have evolved from cost efficiency to talent utilization and are now focused on innovation and transformation.
City Group has been leveraging the Indian talent pool since the 1980s, with a current workforce of 30,000 across five GCC sites in India.
GCCs contribute to strategic priorities like digitization, simplification, and customer experience, with a focus on technology transformation.
Tamil Nadu offers a favorable business environment and a strong skilled workforce, making it an attractive location for GCCs.
City Group has been a top employer in Tamil Nadu since the mid-1980s, with over 10,000 employees and a history of positive experiences.
GCCs balance global standardization with local adaptation, ensuring employees benefit from both global and local engagement.
The ease of doing business in Tamil Nadu is supported by active government and regulatory partnerships, as seen during the COVID-19 pandemic.
GCCs enhance global competitiveness and export capabilities by connecting Tamil Nadu to global platforms and markets.
The future of GCCs is predicted to include more than 2500 GCCs in India, contributing to the global digital economy.
Challenges for GCCs include upgrading competencies quickly and focusing on soft skills and leadership capabilities.
The GCC sector is expected to increase global attention and visibility to India, potentially bringing in lateral investments across sectors.
The journey of GCCs has been from a proof of concept to a significant contributor to the global economy.
The conversation provides a comprehensive overview of the role and impact of GCCs in India, particularly in Tamil Nadu.
Transcripts
the future
[Applause]
of hi everyone welcome to future of
growth a special podcast Series where we
explore the dynamic landscape of Tamil
nadu's Industrial Development and its
Global impact I your host Yar and in
this episode we are thrilled to have a
distinguished guest Mr Balaji nut laadi
managing director and head of operations
and Technology city south Asia at City
our Focus today is on global capability
centers the new growth engine driving
the economy Mr Balaji sheds light on how
GCC is aligned with City's Global
strategy leveraging Tamil nadu's skill
Workforce and business friendly
environment we explore the balance
between Global standardization and
localization the impact on talent
development in Tamil Nadu and the role
of gcc's in fost in Innovation join us
for a concise yet insightful
conversation as we unravel the
transformative journey of global
capability centers more popularly known
as gcc's shaping both the global and
Local Economic Dynamics now to Our Guest
hello sir Welcome to our special podcast
series future of growth thank you it's a
pleasure being with you today sir it
would be wonderful if you could provide
us an overview of how Global capability
centers have played a role in fueling
economic growth especially keeping in
view how City group has contributed to
this model Global capability centers or
gcc's for short as I'll refer to them
for the rest of this podcast have really
exploded in the last four or five years
in India and across some other countries
as well I think the concept of
strategically hubbing functions together
to create scale and Synergy has really
worked
specifically in India we have more than
1,600 gcc's today that number is growing
every year these gcc's employ more than
1.7 million employees directly today and
several more indirectly the sector is
growing at about 12 to 14% cagr And in
terms of value you know it's much Beyond
monetary value it's creating linkages
from India to the rest of the world the
knowledge economy in many comp centers
around the talent in India today I think
the sector has been one of the top
performers in Indian it and it enabl
service economy in the last several
years will continue to grow and by some
estimates it could employ as many as 4
and half million people by 2030 so that
is a tremendous contribution to the
country's economic competitiveness but
also a tremendous contribution to the
knowledge pool and the talent ecosystem
in corporates worldwide so just a
continuity to that question with your
expertise and experience in City Group
in the last decade how have you seen
gcc's evolve that's a very relevant
question so the concept of gcc's goes
back really to the concept of cost
efficiency that's how it started because
obviously countries in Asia like India
and the Philippines for instance offer
significant cost advantages and that's
why the first gcc's got set up more like
a proof of concept and you can call it
phase one of gcc's I think Phase 2 was
when they started maturing and started
focusing on advantages Beyond cost
looking at Talent Arbitrage looking at
scaling up to achieve levels of critical
mass I think phase three is where we are
right now uh for most gcc's which is
really driving Global platform
development application development
Global operational Process Management
Global finance and risk related work out
of India
and here most gccs have already reached
critical mass they're now starting to
look at how to develop synergies between
different functions operating from the
gcc's and also synergies with the
broader technology ecosystem in this
vibrant market so it started with cost
moved on to talent and is now moved on
to Innovation and driving transformation
across the Enterprise I see that
continuing to uh move in that direction
but you know I have been a part of this
journey personally for many years now
and it's been a pleasure to see the
evolution from a small proof of concept
to this industry driving transformation
globally today wow that was like almost
looking at a RX to riches song in a
movie so the understanding is that
multinational corporations often
establish Global capability centers to
enhance operational efficiency how do
these centers align with the broader
strategy of global financial
institutions leveraging the advantages
of skilled Workforce across different
countries sure I think City group's
journey in India itself has been a
fascinating one we have been in India
over 100 years now and specifically in
the technology space city has been a
Pioneer in leveraging the Indian talent
pool right from the 1980s onwards much
before most other multinationals started
discovering the talent pool here we now
have 30,000 employees across five cities
in India five GCC sites in India
supporting the length and breadth of
City globally in five major areas
technology operations Finance risk and
analytics and we now also starting to
explore and scale up in areas
non-traditional areas I would say like
legal compliance model risk management
and other Allied areas so you know if
you look at the city Journey it's kind
of illustrative of the overall GCC
sector in India tremendous growth fulls
scale GCC covering all functions of the
company you know started with operations
and Technology but starting to evolve
much beyond that to all Enterprise
functions today if I look at how this
contributes to the company's strategic
priorities this is deeply embedded I
think technology transformation is core
to most company's agenda today and the
Indian talent pool across gcc's is
actually best Poise to help companies on
their digital Journey we have a pool of
very talented young technologists in
virtually every part of the technology
spectrum and they are helping to drive
across all sectors core technology
transformation core digitization and
Innovative products and Platforms in
addition in other areas for example in
finance and risk which I spoke about and
analytics we are finding the ability to
achieve scale strategic scale in India
which can drive endtoend transformation
of those functions globally I'll give
you an example in analytics and it's an
example in city which I'm very proud of
almost 34 of City's analytics work is
done in India Global analytics work 34
is done in India and what we have seen
from the team is repeated examples of
how they can identify opportunities that
were not known before to drive value in
terms of ideation and execution and
overall efficiency for the firm much
Beyond cost they drive customer
experience Improvement they drive
internal process changes or
simplification and the net result is
that all of these pools of talent in
India are coming together to produce
virtually a new company in many ways
City's journey is similar to many other
gccs have spoken to and I think the
momentum is only going to get faster
because digitization is clearly a theme
of the future I think the three
strategic priorities for any firm today
are digitization simplification and
customer experience India and the gcc's
in India are uniquely poised to drive
transformation in all three areas so
interestingly Tamil Nadu positions
itself as a prime location for gcc's so
how do you see multinational
corporations benefiting from the state's
favorable environment and also its
strong skilled Workforce I think India
as a whole offers a tremendous talent
pool but within that I think Tamil Nadu
has been a state where we have tapped
deep we have more than 10,000 employees
today in Tamil Nadu our association with
the state goes back right to the mid
1980s and city has consistently been a
top employer in the market our
experience has been extremely positive
we have found a very good quality of
talent here of course engineering talent
I don't even need to speak about it
tamado has a lot of engineering colleges
very high quality of engineering
education
and the quality of fresher Talent here
is at least equal to if not Superior to
most other states in the country in
addition we also have a large operations
pool here a large skill set of good
operations managers and leaders we have
a lot of Commerce and accounting latest
skill sets so in effect Tamil Nadu
offers multiple skill sets good quality
very good industry Partnerships Academia
and now a growing lateral ecosystem
because of the Sher size of the industry
here I also must call out that tamado
has offered a very favorable business
environment in many ways with a lot of
emphasis on ease of doing business and
we have always found it very easy to
operate here and it's been a pleasure
for us to continue to grow and which is
why we keep investing in the
State uh I extremely grateful for all
the local Partnerships and support you
have received and I do think you know
I'm speaking not just on behalf of City
group but on behalf of all gcc's
operating in the state so I'm just
curious to know how do you balance
between the global standardization and
local adaptation it's a very good
question see our processes our platforms
our way of operating is globally
standard and I think that's true of most
multinational companies so we bring the
advantages of global best practices you
know employees experience globalized
learning programs and talent development
programs but while we do all of that in
a consistent fashion globally we also so
adapt locally as required and there are
certain things that we drive locally for
example are processes around engagement
of employees our internal Mobility
programs to help employees grow within
their chosen
locations our engagement with the local
colleges engagement with local
communities our engagement with peers in
the market here these are all locally
driven so a combination of global scale
and best practices a with local
engagement works very well so employes
kind of get the best of both worlds in a
sense and I believe that's one of the
reasons why the setor is quite
aspirational for many employees to join
cuz they are working here at the same
time being part of a global digitz
economy and barriers have disappeared
today working out of Chennai and office
in Chennai you're seamlessly connected
to the rest of the company globally and
especially with the rise of uh remote
working I I think now it's so seamless
that employees here feel truly connected
to the global economy this was not the
case let's say 10 years ago people still
felt they were in a bit of a Backwater
but now it's changed and U for me
individually it's been very gratifying
to see that change where people sitting
here are responsible for Global projects
and produce impact in capitals around
the globe so going back to my question
on Tamil Nadu can you share some
insights from your experience on ease of
doing business in the state I would say
in many ways when we set up our GCC
sites in India I think we saw a very
good partnership from all of our local
players across both the Regulatory and
the private
ecosystem and you know I can give you a
couple of small examples to concretize
and illustrate what I'm refering to when
covid broke out for instance and we all
had to react in a few days I thought
tamado did a tremendous job in the way
all parts of the government the
industries Ministry the police you know
local local Corporation Authority all
came together to ensure that we could
still continue to operate even through
the lockdown for critical functions in
the office arranged for E passes
arranged for exemptions as required and
right through what I saw was an
understanding and a conviction and all
those regulatory players that this is an
important sector and should be supported
we did not even need to explain to them
they understood this so I think that
defines the supportive environment in
the state another example I can give is
how guidance Tamil Nadu has actually
helped to Foster interactions between
gcc's between gcc's and colleges and
between gccs and non-traditional
ecosystems so I think the active role
the state plays in developing the
overall ecosystem is very helpful to us
so I would in all say that this is a
very favorable environment and we could
not really ask for anything more so
while we are on the topic of Tamil Nadu
recognizing Tamil nadu's top ranking in
the export preparedness index how do
gcc's contribute to enhancing Global
competitiveness and Export capabilities
well our contribution is only a small
spot of a very very large State
industrial ecosystem here but I think we
are proud of our participation we have
been here right from 1985 in terms of
harnessing tamado poool in technology
and operations in particular as I said
we have more than 10,000 employees here
and we will continue to add more more
we've also been in many ways a champion
of best practices bringing in global
views into Chennai we have shared that
with many of our peers in the ecosystem
we have been part of several government
initiatives and panels around how to
further grow the ecosystem in Tamil Nadu
and we intend to continue doing our best
in that space we have worked with many
colleges across the state to improve the
level of Industry Academia partnership
uh we have a lot of Community
Partnerships in the state as well
overall I would say both at City Group
level and across the GCC sector we are
very proud of our association with the
state and it's also a two-way
Association we get a lot of benefit from
being here and we are working on our
best to give back to the state as well
but how have we improved the export
competitiveness to your question I think
in three ways first by of course share
employment which is
self-explanatory second by adding to the
value of the kind of work done here and
that's the upgradation I spoke about we
started a cost moved on to talent and
Innovation that's reflecting the kind of
roles being done from here so the it's
not just the number of roles but the
quality of Roes that has improved here
and thirdly I would say we have
certainly connected Tamil Nadu better to
the globe today Platforms in a stock
exchange in New York or the railways in
London there are so many examples are so
closely linked with what happens from
Tamil Nadu so I think we have placed
Chennai in many ways at the center of
the global digital economy it's true for
India as a whole but it's certainly true
for Tamil Nadu and Chennai and I think
that's only going to improve in the
future so now the Quint essential
question how do you see the future of
gcc's and how do you see them as a new
growth engine fueling economies I think
gcc's as a sector have been one of the
most interesting areas in the last 10
years I have seen the sector when it was
very very small in 2013 10 years ago and
I've seen it Blossom over the years to a
space now where it is an aspirational
employer across the whole industry and
if I zoom out 5 years from now or 7
years from now in
20130 I see more than 2500 OD gcc's in
India with 4 to 5 million employees
creating direct impact on corporates
worldwide across countries across
continents across sectors I also feel
that gcc's are in many ways upgrading
the talent of qual quality of talent in
India it's not just just about oneway
Street of employing talent it's also
about up teering the whole ecosystem and
I think that will reflect in three ways
Partnerships is Academia on the country
it will reflect an increased focus on De
across the entire industry not just in
gcc's and thirdly by also becoming the
channel to increase Global attention and
visibility to India and thereby bringing
in lateral Investments across sectors so
I am personally very very gratified to
have been a part of this journey I have
seen this experiment move from a proof
of concept to where it is today and I do
believe that our best days are still
ahead of us so while the Journey of gccs
has been evolving I'm sure there are
also challenges that you have overcome
and there will be challenges that you
face sir in your mind what becomes the
most primary Challenge and how do we
break this obstacle I think we need to
upgrade competencies quickly while large
sectors within GCC have done so I do
think across the Spectrum India
is still not entirely there India offers
Talent at scale at strategic scale at
transformational scale but if you take
individual areas let's say cyber
security you will find pockets of
Excellence around the globe where there
has been Cutting Edge work done India
still hasn't got entirely there so
enhancing functional capability is
extremely important and I must say the
Gap is narrowed in the last few years
but that is still a gap second I think
we need to focus also on soft skills and
Leadership capabilities of employees
there's been a lot of emphasis on hard
skills and India traditionally those
skills have been valued and that's how
we talk to our children as well
mathematics science but in a corporate
world in today's globalized world soft
skills interpersonal skills team
management skills leadership skills
communication skills ability to work
with Partners around the globe those are
actually the skills that are very very
important and what you learn in college
what you learn in the early years
disappears in a few years because
technology moves so fast but the skills
you inculcate as a human beings stay
forever I think we need to focus more on
developing those skills if we have to
truly produce the leadership of the
future sitting out of India for the
globe so thank you once again for
joining us on this special podcast
future of growth I'm sure for our
listeners it was like a crash course on
global capability centers thank you for
having me today it's a topic I'm very
passionate about it's been a pleasure to
be with you today thank you again for
the privilege thank you listeners for
joining us on this special podcast on
Global Investors meet uh I'm sure you
found this conversation valuable and
gain New Perspectives on this sector
stay tuned for more engaging discussions
with industry leaders if you have any
questions or topics you would like us to
explore in the future episodes please
feel free to reach us do stay tuned for
more engaging discussions with industry
leaders so until next time this is Yar
signing off on future of
growth the future of growth
oh
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