Innovation is now not only being supported out of India but also being driven out of India which is one of the biggest shifts we have seen.
By Rasika Deshpande
With the pandemic fueling borderless innovation, India is fast becoming the world’s largest innovation hub. GICs are truly emerging as co-creation and co-innovation centres blurring the demographic and operational boundaries. They are riding on the back of the country’s knowledge-driven workforce, solid infrastructure and supportive government policies. The honours are on all of us to continue to cultivate a truly borderless culture, fostering innovation that will drive the best experience for all the stakeholders.
While India has almost half the worlds GICs situated outside home countries, Hari Vasudev, Country Head and SVP, Walmart Global Tech India feels there are three factors that are driving this interest – strong talent, overall ecosystem play and the market.
“India as an ecosystem is growing very fast. Particularly sectors like retail. A lot of innovation is happening and there is a constraint market. Companies are very eager to come to India. They take the learning from here and apply it outside. India is also a very large market. Companies have a large business interest in India. It always makes sense to have a workforce in the market that can be much closer to the customer so that they can develop great empathy,” Vasudev said.
Talking about cost focus in other companies and in Walmart, Vasudev said, “Companies used to be cost focus but now the scenario is changing. We at Walmart are definitely cost focused, we have EDLC (Everyday Low Cost) / EDLP ( Everyday Low Price). So as a retailer we are always looking to take cost focus. But it has now become much of a value play. We are in the market because this is where you get a lot of value, you can drive a lot of innovation and that is more and more becoming the predominant theme. It’s not that cost is not important and it is true that India continues to offer a cost advantage related to markets, but I don’t think that is a top priority for top global leaders when it comes to India particularly when they think about their own GCCs.”
Ankur Mittal, SVP Tech and MD, Lowe’s India added that today cost is not the reason for businesses to come to India. There are other factors like the talent that are making India such a hot place for GICs. People have a lot more empathy to offer towards the customer as well as openness to learning new things, that is what drives GICs even more over here.
He says, “There are a couple of GICs where India is more expensive to them than their own countries but they still want to have a centre in India because they believe the kind of talent they get over here is just phenomenal. You can get people who have worked with Amazon, Walmart, Target and now they are working with Lowe’s. It is by far and large talent play and their ability to connect to global customers.”
Arindam Bannerjee, EVP and MD, Wells Fargo pointed that today, GICs are attracting not just talent in India but also from all across the world. He says if you look into the unique factors which have come into play in the last few years, firstly it is scalability. The scales of India have expanded well beyond just score engineering which has been the extraordinary skill set we have in India but as well as expanded beyond that. talent mobility is a big factor that comes in. and if you put that together, the scalability, the wide variety of functional depth, the leadership and managerial capabilities which is available- honestly very few other locations other than India can throw in the recipe. Things have evolved at such a massive pace.
The effect of the pandemic on revenues of enterprises
As a lot of enterprises are facing a revenue crunch today because of the pandemic.
“Obviously with the pandemic, everyone just had to react. But I wouldn’t call it a revenue crunch. In fact, this is the other way around. Because people see this pressure as a need to do things differently and faster. It is just like any discontinuation. It’s not a direct impact. GICs have long ago ceased to be just for cost play. Because even if it was for cost play you could assume that there is a direct impact between what’s happening on revenues and pandemic to the GICs. I think that relationship got broken probably 10 years ago,” said K. Harishankar, Vice President- IT- Architecture, Engineering and Corporate Functions, Kimberly Clark.
The pandemic has blurred the geographical, physical boundaries and boundaries across ecosystems which is accelerating digitization faster than what we have seen in the past.
Talking about IBM specifically, John Granger, Senior VP and Hybrid Cloud Services & COO, GBM, IBM says that “This pandemic has driven a huge amount of change. Everyone has pivoted in a matter of days in our contingency plans to nearly 100% people working from home and we have still maintained our service levels. This continuity has driven change in a matter of weeks that was going to happen over the years. And therefore I think the implications for the borderless concept has really started to be codified by our team in India.” We call this concept dynamic delivery.”
According to Granger, the cloud is driving the whole borderless technology approach and he believes that the right answer is going to be the hybrid cloud. “We believe that our clients want to have hybrid cloud architecture that takes advantage of their traditional IT environment, their personal clouds and multiple public clouds. We think that through that approach not only you can drive more innovation and you can access innovation from different clouds, you can also drive 2 and a half times more value than you went to a pure public cloud approach and you can also preserve your strategic optionality in terms of not being tied in too many public cloud providers and you will be able to switch. So that hybrid cloud architecture is going to be really important which will drive towards a more borderless movement of technology.”
Status of GICs in India post-pandemic
Vasudev thinks that change existed even before the pandemic hit. What the pandemic has done to a certain extent is really make it a little bit more frictionless. It has opened up to the people’s eyes that this sort of borderless development, innovation happening across the globe is now a reality and it is possible.
“Everyone in the enterprises has suddenly woken up and realised that digital transformation is now where we work well across borders on a fairly global level. Still, there are some issues like time zone, work-life balance and people are sort of stretching their day endlessly. A lot of time has been put into how do we actually partition the work and drive more and more accountability and ownership to the team that is distributed across geographies. So that they can still run independently equally focused on the well-being of associates,” Vasudev said.
How to train associates on how a company works in the market?
Training the teams at a team when physical interactions are extremely challenging is creating innovative opportunities for GICs in India where many of the employees have never seen how the company’s stores function being in other global markets. This also makes it challenging to work with team members in a remote environment.
Mittal talks specifically about how Lowe’s India trains its associates. He said “Last year when then lockdown started, we saw a sudden spike in our sales, both in dotcom and stores. Dotcom grew by 120% but our stores also grew by 15 to 17% and total sales grew by 25%. The last time it happened in 1977 when we opened hundreds of stores that year. But what happened because of that suddenly we all realised that some of the things that we were planning to do in the next 2 or 3 years we have to do them now in 6 weeks. And we also realised that we have to use our stores much better in terms of using them as delivery centres because volume increased overnight so much. 50% of Lowe’s technology is based in India. Now everybody came on the same platform. Everybody was sitting in front of their screens. It becomes very very important for each one of them to understand how it will work when you work as an individual on your machine. That was really helpful for Indian associates. Eventually, everyone figured out how we are going to work together.”
Talking about the biggest innovations in the last year, Harishankar says AIML, “Data Science and digital core transformation are big areas for most companies. The whole digital core transformation is a big agenda and a lot of that is being run out of India, we are working with other centres as well but we have both existing talent, a lot of new hires with expertise in this area particularly around digital core transformation. Therefore I would say on the front end, commercial transformation, digital core transformation as well as Data Science, AIML areas, there is a lot that has been happening in the centre. In the new digital way of working it is very important to position your centre in that manner. We are leading innovation and not just part of it. We are equal partners in innovation across any centres in the world.”
Talking about technologies that can be deployed or exploited from Indian centres, Bannerjee says once you start to enhance your digital adoption effectively, your store becomes your phone or your PC. You basically have the engineering capabilities to build your front end channels, your ability to quickly access the throughput.
He says, “Some of the UI designers from the US who were working at front end client enterprises had a lot of experience with a lot of fintech in India. They played on those and actually saw how can we adopt some of these principles and some of that was done. They had to do something to pass the quality test and it met the requirements of the clients and businesses in the time frame that was required. It is not only just about a quick fix to solve the problem it is about looking at the larger context and looking out of the box to create different solutions.”
Article: How the recent pandemic has driven digital transformation in a borderless enterprise