How Global Capability Centers are Shaping the Future of Biometrics

In an interaction with India Pharma Outlook, Nagalakshmi Shetty, Country Head – India & Vice President, Clinical Data Science at ICON plc, discusses India's emergence as a hub for Global Capability Centres (GCCs), particularly in healthcare. She highlights talent availability, cost advantages, government support, and future trends, emphasizing GCCs' evolution from cost-saving units to innovation-driven strategic centers for global businesses. A recognized industry leader with over two decades of experience, Nagalakshmi serves on the SCDM India Board and was its first female India Chair. At ICON, she leads the Networking Organisation for Women (NOW) in APAC, championing gender diversity and inclusion.

What is a GCC, and why has India emerged as one of the preferred locations for GCCs? 

Global Capability Centres (GCCs) are strategic arms of multinational corporations. They utilize a diverse and skilled offshore talent pool, with the center representing a substantial percentage of the global workload. The nature of work spans from operations, global business services, and consulting to R&D services, technology and transformation.

While there are GCCs in regions across the globe, such as Latin America, Eastern Europe and Southeast Asia, India has emerged as a preferred choice, providing scalability, a skilled workforce and cost-effectiveness. It has more than 1,700 GCCs with a US$64 billion market size, poised to grow at a 10% compound annual growth rate. This is nothing short of remarkable. It is estimated that one GCC is added every week, at which rate it is anticipated will contribute 1-2% of India’s GDP. India is projected to become the third-largest economy by 2030, according to Standard & Poor Global Market Intelligence.

Looking at their evolution, GCCs began in the early 1990s as companies identified the available talent pool that offered substantial cost savings through labor arbitrage. It progressed to a phase of enhancing process knowledge and quality. As these companies have been in operation for a significant period, they have produced professionals with extensive domain expertise who are at the forefront of driving innovation. This transition has resulted in more global multinational companies operating from the region and delivering significant value to their parent companies.

Can you tell us about the Healthcare GCC Landscape? 

Healthcare companies such as Novartis were among the early adopters in establishing GCCs. There has been a surge in the setup of GCCs in the past few years. Many pharmaceutical companies have seen their India-based GCCs become the primary hubs for their parent organizations, with headcounts reaching the thousands and growing rapidly. Companies such as Elly Lilly, Sanofi, BMS, Takeda, Astra Zeneca and Amgen are setting up GCCs. According to the Organisation of Pharmaceutical Producers of India (OPPI), there are close to 40 Pharma GCCs in India. Hyderabad is emerging as a preferred location, with significant investments ranging from €400 million by Sanofi to Amgen leasing a 500,000 sq ft facility. Bangalore boasts the highest number of GCCs in India, and companies, including GSK and Takeda, have centers there.

Healthcare GCC centers have multiple teams covering industry-specific responsibilities such as drug development, clinical, data management, biostatistics, medical writing, regulatory, and pharmacovigilance. In addition, they cover broader operational needs such as digital and technology, HR services, finance, procurement, legal, risk and compliance, and commercial. Bringing teams together through GCCs offers transformation and collaboration opportunities, fuelling the innovation ecosystem.

Why has there been a surge of Pharma companies setting up GCCs in India? 

Healthcare and pharma organisations constantly seek to accelerate drug development whilst ensuring patient safety. GCCs can be leveraged to drive innovation, transformation, and enhance their core business processes. Being a mature market, India has talent at scale. These talented professionals add value to current processes, collaborate with their global counterparts and deliver critical responsibilities. While wages are going up due to demand for talent, there is a significant cost advantage compared to the other geographic regions, especially more developed ones. This model is sustainable, considering India produces 2.4 million STEM graduates every year, which continues to grow and is expected to overtake China by 2030.

India is an attractive location for pharma company GCCs due to our English-speaking workforce and robust innovation ecosystem fuelled by government policy support. There are tax benefits, infrastructure supports and grants other benefits include technology parks, special funds for AI, and university-industry collaborations bridging the gap between industry and academia. The market is also conducive to bringing more clinical trials to India.

ICON has been part of the GCC ecosystem for many years. What are some of the dos and don’ts for companies just setting up? 

ICON is a prominent leader in the healthcare service sector and has operated in India for more than 20 years. We have built our team over many years, developing deep expertise and a talent pool. Newer companies setting up now must try to achieve this in a shorter timeframe. Regardless of India's potential, it is crucial for a GCC strategy to have support from C-Level management. Without top-down sponsorship, success may be slower or restricted.

We require not only employees and their immediate managers but also experienced senior leaders to be based in India. They help build an effective team with the right culture. They know what works, understand effective strategies, foster collaboration with the global team and empower the local team to reach its full potential. Empowering local leaders is vital, and a clear operating model is essential for success.

It is crucial to grant autonomy at the local level to speed up and maximize the team's capabilities. Equally, a lack of collaboration with the global team can result in numerous obstacles. To overcome this, ensure that everyone within the global team and GCC are striving towards a clearly defined and unified vision. Synergy, knowledge sharing and a supportive ecosystem are critical for success. While building a team a robust governance framework with clear accountability and definitions of what success looks like will help the GCC to excel. Transparency in reporting progress and clear communication are vital for managing change. A supportive ecosystem should underpin everything. Networking and collaboration are necessary to establish a culture that embodies the principle of thinking globally and acting locally. This can be achieved with secondments, in-person meetings, and collaborative workshops. 

Finally, it’s important for GCCs to focus on investing in talent development rather than solely relying on external hires. Collaborating with academic institutions to cultivate industry-ready talent ensures GCCs can secure a sustainable long-term talent pipeline.

How do you see the evolution of GCCs in Healthcare? 

We expect an increase in the establishment of new GCCs by other companies, spurred on by the existing thriving GCCs. There is an expected trend towards multi-centre GCCs expanding into Tier II cities. Companies will evolve to find their particular balance between insourcing and outsourcing. GCCs will continue to collaborate with expert vendors/partners in their respective fields to achieve their end goals faster, better and at optimal cost.

GCCs have already evolved from focusing on cost savings to adding value. They will continue to mature to have end-to-end functions and drive innovation. The fascinating journey of moving up the value chain will mean even more opportunities, continued focus on talent development, retention and excellence in delivery. The potential for growth and impact is limitless. It is up to GCCs to seize these opportunities to shape the future of their organizations.