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Our experts will also discuss critical global services decisions, including build vs. buy strategies, in-house vs. outsourcing, onshore vs. offshore operations, and the balance between long-term and short-term contracts.
The global services industry’s confidence waned in 2023 after a banner post-pandemic year. Coming off a bumper year in 2022 with double-digit growth driven by pent-up demand after the pandemic, the global services industry entered 2023 with macroeconomic uncertainty clouding the forecast.
Global Business Services (GBS) organizations have become essential to the enterprise as these sharedservice centers help to optimize costs and build talent strategies for the future. In fact, cost pressure was ranked as the number one business challenge in our annual key issues survey for 2023.
In 2023 alone, over three hundred GCCs were set up in offshore and nearshore locations, and this trend is expected to continue in the near future. Similarly, in 2023, Gloplax and KPMG formed a partnership to better serve their clients in the GCC setup space.
The normative definition for the GBS model is the central provision of facilities management, administrative services, HR services, metrics reporting, infrastructure, and often capabilities such as cross-functional collaboration, continuous improvement, program and change management in an offshore location while the business takes the delivery risk.
While most GCCs have successfully delivered upon their initial mandates for growth, concerns are mounting that they are increasingly viewed as mere offshore role aggregators as opposed to value generators. This challenge was highlighted during the 2023 nasscom GCC conclave, where many leaders raised the question of value articulation.
The benefits of setting up an offshore Global Capability Center (GCC) for growth are undeniable. However, gaining access to world-class talent and technology capabilities, quickly and at scale, comes with its fair share of challenges. Cost Optimization Setting up a GCC in an offshore location involves investing in heavy upfront costs.
Source: Magellan Solutions In 2023, global outsourcing spending may reach US$731 billion, according to Deloitte’s Outsourcing and SharedServices 2019-2023 Report. In 2023, spending on IT outsourcing is projected to increase by 22% to US$519 billion. We will examine some general outsourcing statistics below.
Source: Magellan Solutions In 2023, global outsourcing spending may reach US$731 billion, according to Deloitte’s Outsourcing and SharedServices 2019-2023 Report. In 2023, spending on IT outsourcing is projected to increase by 22% to US$519 billion. We will examine some general outsourcing statistics below.
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