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Taking global in-house centers to the next level
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Today's business environment is global, complex, agile, and influenced by the digital revolution, which means it is accelerating. To keep up, many multinational corporations are seeking to restructure their service delivery models and to integrate global in-house centers (GICs) in more expansive ways.
- Introducing the Global In-house Center Capability Maturity Index
- GIC maturity curve
- The GCMI framework
- Using the GIC Capability Maturity Index
Introducing the Global In-house Center (GIC) Capability Maturity Index
Over the last few years, more than 750 multinational corporations have established Global In-house Centers (GICs) in India1 in an effort to leverage the nation’s highly skilled, low-cost talent pool to reduce cost of ownership and to serve fast-growing global and regional markets. Historically, the maturity of these GICs has evolved gradually, taking years to progress from dedicated centers set up for one or two functions to multifunction centers providing value-added services both locally and globally.
GICs are being challenged to rapidly evolve their operating models to move up the value chain. As such, they are increasingly transitioning from being pure play cost centers to becoming centers of excellence delivering innovation, quality, and strategic value.
Aspiring to higher levels of capability maturity, however, raises a number of questions for GICs and their parent organizations, such as:
- What defines “capability maturity”? And where does our GIC stand now?
- How do we enhance the capability maturity of our GIC?
- How does our organization’s service delivery and shared services strategy compare to others?
- Where should we focus our limited resources? How do we prioritize?
- How do we continue to improve operations and optimize service delivery?
- What are some ways to improve service levels while maintaining the right cost structure?
- How do we incorporate outsourcing as part of the service delivery model?
To address these questions, and others like them, Deloitte in collaboration with the Indian School of Business (ISB), developed the GIC Capability Maturity Index (CMI).
The GIC CMI is composed of two parts, a curve that illustrates the progressive capability maturity levels for a GIC and a framework that gauges the maturity of participating GICs across the key areas of strategy, control, coordination, talent, and operational performance.
To learn more about the index download the complete report.
1 Defining the GIC CEO agenda for talent in 2013: Beyond Hypergrowth? What’s next for GIC Talent in India?” Deloitte and National Association of Software and Services Companies (NASSCOM), 2013, pg. 4.
GIC Capability Maturity Index (CMI)
- Assess the capabilities of a GIC in absolute and relative (i.e., peer comparison) terms.
- Identify specific processes and capabilities in which GICs may need to invest in order to deliver required business outcomes reliably and sustainably.
- Assist in building a credible business case for growth and expansion.
- Help showcase the value delivered to the parent organization.
GIC maturity curve
The GCMI framework
One size doesn’t fit all. An organization should consider its strategic goals and its vision for the GIC to determine where it wants to be on the maturity curve.
Using the GIC Capability Maturity Index
Importantly, moving up the curve is not necessary—or even desirable—for every GIC. An organization should consider its strategic goals and its vision for the GIC to determine if it should seek to transition to the next level of maturity or if it should focus on improving performance within the current level.
Most GICs in India continue to evolve in light of changing business priorities. While several have achieved critical scale and have succeeded in delivering significant cost savings, increasing operating costs are making it harder for even the most successful GICs to generate incremental value moving ahead. Therefore, it has become imperative for GICs to reinvent themselves to stay relevant and add demonstrable, sustainable value to their parent organizations. Some may accomplish this, for example, by acting as global centers of excellence, providing large-scale, highly standardized services at reduced costs, enabling regional/local innovation, and driving market expansion opportunities for the parent.
In undertaking such a transformation, GIC leaders should not only seek to understand the maturity level of their current capabilities but should also develop a value proposition that is relevant to the changing marketplace dynamics in which the parent organization operates. The GIC Capability Maturity Model is intended to provide GIC leaders with a structure for thinking about strategic direction, investment priorities, and potential paths to capability maturity on their journey to becoming a best-in-class operation.