Xcelyst Partners

Your Global CoE as a strategic advantage: A Playbook

India today is home to many large Global Centers of Excellence (CoEs) or Global Capability Centers (GCCs), many of them with 1000+ employees.  The earliest CoEs were set up almost 25-30 years ago, when they were simply offshore centers with a few employees performing a defined task.  Over time they have become strategic centers with thousands of employees, playing a vital role in not only basic “run the business” functions like customer service, application-infra maintenance, financial accounting, but also in “change the business” functions like transformation, risk management, new product development, business planning, innovation and R&D. 

This journey from an offshore center to a strategic CoE takes a committed CXO sponsorship, engaged local leaders, and an awesome culture that permeates across levels.   Having been part of the journey at a few successful and mature CoE’s over the past many years, their inception, growth and maturity can be broken down into a few critical stages.  This specific playbook is for a global bank, but is applicable across industries.

 

1. Initial Setup and Establishment

  • Purpose: Establish presence in India primarily for cost-effective back-office operations and support functions.
  • Focus: On transactional processes such as data entry, IT support, call centers, and routine operations.
  • Key Drivers: Cost arbitrage and a growing pool of English-speaking, tech-savvy professionals.

2. Expansion of Service Scope

  • Service Diversification: Handling more value-added services such as research and analytics, finance and accounting, software development and risk management.
  • Transition from Cost Centers to Centers of Excellence: India seen as a preferred talent pool for specialized areas like risk management and technology.

3. Integration and Functional Growth

  • Increased Strategic Importance: Integration with the bank’s global operations. No longer just offshore units but integral part of teams; working on strategic projects that directly impact global operations.
  • Focus on Risk and Compliance: Post financial crisis, need for enhanced risk management and compliance functions.
  • Involvement in Global Operations: Indian teams started managing complex functions such as equity research, asset management support, and handling critical parts of the global operations for investment banking.
  • Innovation: This period also saw a focus on automation and process improvement, which drove efficiency across global network.

4. Digital Transformation and Innovation

  • Technology-Driven Growth: Global push toward digital transformation significantly impacted its India operations. The CoEs played a key role in developing cutting-edge technologies such as AI, machine learning, blockchain, and big data analytics.
  • Cybersecurity and Fintech Development: The rise of digital banking and fintech innovation saw Indian teams being deeply involved in building secure platforms for global clients. Cybersecurity and fraud detection systems became core activities in Indian centers.
  • Shift to High-Value Services: The Indian CoEs moved further up the value chain, handling complex roles in global trading systems, algorithmic trading support, and data science.
  • Leadership Integration: More Indian leaders became part of the global executive teams, ensuring better alignment of India operations with global business goals.

5. Maturity and Complex Global Operations

  • Strategic Center for Innovation: Almost 15 years after inception, the India CoEs became critical to Bank’s global strategy, playing key roles in innovation, product development, and digital transformation.
  • Scaling Advanced Functions: Indian teams now manage highly sophisticated functions, including algorithmic trading, AI-driven risk management systems, and global platform development for asset and wealth management.
  • Talent and Leadership Hub: India’s role as a global talent hub was solidified, with a growing number of Indian leaders taking up critical global roles. Leadership at the CoEs became an integral part of Bank’s broader leadership structure.
  • Innovation in Cloud and Automation: With the rise of cloud computing and automation, Indian centers worked on enhancing global banking platforms, improving efficiency and customer experience

6. Future

  • Continued Role in Global Strategy: As of this year, Indian CoEs are expected to remain key players in global financial services, focusing on advanced technological solutions, cybersecurity, AI, machine learning, and ESG-related initiatives.
  • Innovation Hub: The centers are likely to play a leading role in developing the next generation of digital banking solutions, integrating AI and fintech advancements into mainstream financial operations.
  • Increased Autonomy: Indian operations may become even more autonomous, managing significant global projects and driving innovation independently while being tightly integrated into the global network.

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