The Complementarity of Global Capability Centers and Technology Service Providers

At Davos 2024, a pivotal insight emerged: the business landscape is ripe for collaboration, far beyond what many leaders previously recognized. This concept opens up new possibilities for enriching business practices and fostering partnerships, particularly between Technology Service Providers (TSPs) and Global Capability Centers (GCCs). Once seen as separate competitive entities, TSPs, and GCCs are now identified as collaborative partners, each with unique strengths. TSPs bring external expertise, scalability, and varied industry insights, while GCCs focus on internal capability development, strategic objectives, and managing risk.

This evolving dynamic underscores the shift from competition to collaboration, aligning more closely with customer-centric business models. By combining the agility and innovation of TSPs with the strategic depth and domain knowledge of GCCs, businesses can more effectively navigate complex technological environments. emphasizing customer needs at its core, it fosters an integrated, adaptable, and cooperative business ethos.

How Global Capability Centers and Technology Service Providers Uniquely Enhance Their Client’s Ability to Innovate, Scale, and Drive Value

Here are five reasons why this theme is critical for business leaders and the potential future impact for firms embracing this synergy.

• Enhanced Innovation and Competitive Edge: The combination of GCCs’ internal, strategic focus and TSPs’ external, cutting-edge expertise fosters an environment of innovation. This partnership enables companies to stay ahead of technological trends and meet evolving market demands more efficiently, thus maintaining a competitive edge.

• Strategic Resource Optimization: By leveraging TSPs for specialized skills and external insights, businesses can free up their GCCs to concentrate on core competencies and strategic goals. This ensures optimal resource utilization, focusing internal efforts on long-term growth and external resources on immediate, specialized needs.

• Agility in a Dynamic Market: The collaboration between GCCs and TSPs provides businesses with the agility to respond quickly to market changes. TSPs offer scalability and flexibility, allowing companies to adapt to evolving needs without the overhead of developing in-house expertise for every new technology or trend.

• Holistic Problem-Solving Approach: Working together, GCCs and TSPs can address complex challenges more holistically. GCCs bring in-depth understanding of the company’s ethos and long-term strategy, while TSPs contribute diverse industry perspectives and innovative solutions, leading to more comprehensive problem-solving.

• Future-Proofing Businesses: As the digital landscape continues to evolve, businesses collaborating with both GCCs and TSPs are better positioned to navigate future challenges. This partnership not only drives current innovation but also builds a foundation for sustained growth and adaptation in the face of future technological advancements.

GCCs and TSPs do not stand in competition; rather, they offer complementary strengths that can significantly enhance a company’s capability to innovate, adapt, and grow. By fostering a collaborative ecosystem, businesses can strategically align their long-term goals with the agility to respond to immediate challenges, creating a synergistic relationship that maximizes value and propels both entities toward shared success.

Embracing The Global Capability Centers and Technology Service Providers Synergy: Case Studies on Collaboration for Global Business

1. GE and Infosys: Synergizing GCC Expertise and Service Provider Innovation for Grid Transformation

Challenge:

General Electric (GE) faced the challenge of digitally transforming its global industrial operations to improve productivity and drive innovation. The company needed to leverage advanced digital capabilities, such as the Industrial Internet of Things (IIOT), and manage complex grid systems more effectively.

Solution:

GE opened its largest Digital Hub in Bangalore, recruiting 1,000 IT and software professionals to focus on developing IIOT solutions. To further enhance its grid transformation efforts, GE established a strategic partnership with Infosys, leveraging:

• Infosys’ capabilities in AI, cloud, cybersecurity, and industrial IOT to co-create intelligent grid solutions.
• Infosys’ investment in developing a GE Digital Center of Excellence (COE) to facilitate the integration of GE’s GridOS® platform and application suite into enterprise ecosystems.
• The combined expertise to address the growing complexity of grid systems and the increasing importance of IT and Operational Technology (OT) alignment.

Outcome:

The partnership between GE and Infosys led to:

• The accelerated adoption of grid software that equips grid operators with advanced tools for stability, resilience, and sustainability.
• Significant productivity improvements and cost efficiencies in managing and orchestrating the clean energy grid.

2. Shell’s IT Revolution: Harnessing GCC Synergy with IBM and Wipro for Global Technological Leadership

Challenge:

Shell sought to streamline its global IT operations and support capabilities, focusing on enhancing in-house project delivery and optimizing its IT workforce to significantly reduce operational costs.

Solution:

In a strategic move to overhaul its global IT capabilities, Shell has taken significant steps to tap into the growing IT sector of India and the expertise of technology leaders:

• Initiated a Bangalore IT Center: Shell has established an IT center in Bangalore, integrating it into the core of its global IT project delivery and support network. This strategic decision leverages India’s vast, skilled, and diverse IT talent pool to support Shell’s operational needs worldwide, across all business sectors.
• Partnership with IBM and Wipro Technologies: Shell has entered into a significant IT services agreement with IBM and Wipro Technologies. This partnership is designed to harness the external expertise of these tech giants to meet Shell’s IT requirements, with a focus on driving higher efficiency and fostering innovation within its IT services.

Outcome:

This initiative leveraged India’s extensive tech talent to enhance IT project delivery and support, leading to a significant competitive edge and considerable cost efficiencies. By streamlining IT services and reducing headcount, the alliance was projected to save Shell an estimated USD 850 Mn — a critical factor for success in the digital transformation of the energy sector.

Synergizing External and Internal Capabilities

In both cases, GE collaborating with Infosys and Shell collaborating with IBM and Wipro demonstrated how companies can efficiently combine external tech expertise with their global teams to streamline operations and boost global competitiveness. This approach actively improved their process management and enhanced their market position worldwide.

This synergy marks a progressive shift in business strategies, moving beyond competition to a model that combines TSPs’ external innovation and agility with GCCs’ domain expertise and strategic focus.

For over 20 years, Zinnov has supported more than 100 Multinational Corporations (MNCs) in achieving these outcomes. Our services include rapid GCC setup in under 90 days, Global Talent Strategy, and Globalization Advisory. We are dedicated to helping you find the precise balance required to elevate your business to new heights in the global market. Contact us today at info@zinnov.com to learn how we can assist you in reaching your goals.