India most preferred location for global shared services after Poland and Mexico, says Deloitte survey
August 24, 2023
India has emerged as the most preferred location as a Global Shared Services hub, followed by Poland and Mexico, according to Deloitte’s 2023 Global Shared Services and Outsourcing survey.
The GCC sector currently contributes a revenue of $60 billion, which is expected to reach $75-80 billion within 4-5 years. India is expected to have over 1,900 GCCs, employing 2 million people and earning $60 billion. “According to WTO estimates, India is also amongst the world’s top exporters of services, doubling its share in global services trade to over 4 per cent in 2022 from 2 per cent in 2005. This, backed by survey findings, showcases that shared service centres are going to be at the core of India strengthening its position on the global map, and achieving the country’s services exports target of $400 billion for the current fiscal year,” said Saurabh Mathur, Partner, Deloitte Touche Tohmatsu India LLP.
The report by Deloitte delved into the evolving service delivery models adopted by the world’s largest companies amidst tightening economic conditions and continued preference for remote and hybrid work. It also uncovered trends and strategies driving process optimisation and cost-efficiency across industries.
The global survey revealed a significant shift, with GBS organisations delivering transformational capabilities and becoming more closely aligned with the C-suite. “Over 40 per cent of experienced GBS firms are now being led by dedicated GBS leaders, with CFOs taking the lead in over 80 per cent of these organisations that go beyond their defined scope,” it said. The survey also discovered that automation takes center stage as the top digital enabler for GBS organisations and is expected to be a key focus area in the next 1-3 years.
However, despite significant progress, GBS organisations face challenges such as talent shortage, which is still seen as an implementation barrier while adopting automation by 40 per cent of GBS organisations. “With a talent revolution coming in, one of the solutions is to move work to cost-efficient locations and navigate tight labour markets and cost pressures, followed by upskilling and bolstering employee well-being,” said Saurabh Mathur.
The survey underlined the role played by GBS in driving Environmental, Social, and Governance (ESG) outcomes. As organisations place greater emphasis on ESG, GBS are actively supporting an array of ESG processes and contributing to their parent group’s net-zero aspirations. The ESG adoption is broadly industry-agnostic, with a majority of the industry areas reporting a significant focus on ESG ranging from 45- 55 per cent.
The integration of enabling technology and ESG initiatives will also be a key differentiator for organisations seeking to drive operational excellence, foster sustainability, create long-term value for stakeholders, and drive greater impact across industries in the years to come, it said.
[The Financial Express]
