As per the GIC Maturity Model (source: Intellee Research), the GICs range from a simple, no-frills resource center where labor rate arbitrage is the key driver for value to an innovation center/lab where organizations are accelerating Innovation across tech products/platforms and digital transformation initiatives. In addition, organizations have moved the needle to convert a GIC from a cost-center to a revenue center where GICs add revenue streams to the parent organization.
Today, majority of the GICs are striving towards becoming an innovation center where they can accelerate innovation across 2 key dimensions :
Time to Market reduction for Technology Product delivery by leveraging the 24 hour “follow the sun” model for product delivery by implementing an integrated global team across India and other geographies. This feature velocity benefit has greatly helped drive competitive advantage.
Advancing digital Transformation initiatives by leveraging digital talent in India and the GIC ecosystem encompassing a vibrant and growing start-up and academia community that are helping organizations jump-start their innovation story.
Many GICs, who have started with Cost and Talent as the main drivers have transformed their centres to Innovation centres. The transition from a cost and talent advantage to innovation is clearly becoming compelling. As per a Times of India article many of the enterprise Banks like Deutsche Bank are innovating in India and building AI solutions for Bank Operations.
Retail players, from US like Walmart, Lowe’s, L Brands (Victoria’s Secret), JCPenney, Saks Fifth Avenue and Ann Taylor have come in to create digital platforms that can provide an omnichannel experience to customers, make supply chains more efficient, and analyse humongous volumes of data.
In the Aerospace domain, GE, Honeywell, Airbus and Boeing use engineers in India to conduct research in areas such as flight sciences, materials & processes, and structures. The team focuses on core engineering in areas such as Structural analysis, Computational fluid dynamics, Avionics software design and testing, System simulation, Digital mock-ups and system installation. GE’s technology centre in Bengaluru has become its largest R&D centre, housing engineering teams across all their businesses in healthcare, aviation, transportation, power and energy.
Oil and gas major Shell opened a tech centre in Bengaluru in 2006, and expanded to a new 52-acre campus last year. The campus has over 1,000 people with expertise in liquefied natural gas, subsurface modelling, data analysis and engineering design.
Automobile platforms built by Harman India, run on numerous Automobile brands globally, including Fiat Chrysler, General Motors, Volkswagen, Hyundai, Subaru, and Kia. For all Mercedes car lines, the rear seat safety mandate is in India. The engineers in India compute all the parameters for seat safety, compute every load case, and provide the result. The India team then participates in testing in a crash test facility elsewhere in the world. The centre in India also works on certain doors and chassis, and has built numerous cutting-edge algorithms — involving over 250 patents — that help parent company Daimler simulate and test a variety of systems. India has Daimler’s biggest R&D presence outside of home country Germany. (Article: Times of India )
Accelerating Innovation is clearly becoming a compelling business value of GICs and CXOs are rushing in to leverage this capability to stay competitive in today’s digital world by leveraging the Innovation eco-system of Startups, Academia and Talent available in India.