Guide to scale innovation at

GlobaI In-house Centers(GICs)

kpmg.com/in

DRAFT

The changing paradigm of innovation at GICs

In order to step-up as a business partner and play a consultative role to the enterprise, GICs can adopt an integrated strategy to scale innovation in digitisation...

Digital disruption seems to be fundamentally changing the ways in which organisations operate. Adopting digitisation is one of the imperatives and staying ahead of the innovation curve is the new norm. This requires a paradigm shift in GICs’ perspective towards innovation to thrive in the digital era…

1. http://articles.economictimes.indiatimes.com/2004-12-11/news/27407344_1_offshoring-neoit-supplier2. https://hbr.org/2013/03/offshore-centers-can-offer-more-than-low-costs3. http://www.business-standard.com/article/economy-policy/india-based-captives-move-up-the-value-chain-114050700199_1.html

Source: KPMG in India analysis, 2015.

Enterprises focussed on cost arbitrage through low cost destinations. Offshoring was driven by global consolidation coupled with unified technology platform roll-outs.

GICs achieved critical mass and moved up the operations maturity curve through Operational Excellence.

Digital disruption seems to be the next inflection point. It will be important for GICs to lead this wave and become a true business partner to the enterprise.

For GICs to move up the value chain, it is important for them to build stronger strategic partnerships with their eco system.3

Business Standard

• Mobility and social media

• Cloud/SaaS• Analytics and big

data• Robotics process

Digital transformation

3.0

• Standardisation• Automation• Process

Re-engineering• Centres of

excellence

Originally designed to provide labour cost arbitrage, these centres are pushing the boundaries of efficiencies and are on the brink of being a source of strategic advantage. 2

HBR

Operational efficiency

2.0

Offshoring

• Cost arbitrage• Technology

platforms• Access to global

skills• Data management

Global sourcing has become a corporate mandate for both leading corporations and global service suppliers.1

Economic Times

1.0

Cost andScalability Productivity

BusinessPartnering

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Framework to scale innovation

Source: KPMG in India analysis, 2015.

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MandateSet budget and drive sponsorship for innovation- Leading GICs work closely with their parent organizations to identify a budget which is spent on innovation and also drives sponsorship at an enterprise level.4

Involve the parent organisation closely during execution- GICs must involve the parent organisation and business units while prioritising and executing ideas. This can help the GIC move up the learning curve, showcase its capabilities, help build trust with the parent and drive a culture of working together with the enterprise and not limit innovation to GIC’s scope.

Drive focused innovation- Few GICs have a dedicated and focussed innovation cell that poses problem statements to employees to garner bright ideas. Leading GICs in technology sector also set-up ‘garage time’ for employees to build on their ideas and passion.

MentorshipAssign idea champions and provide commitment- Assign a suitable subject matter expert to help ensure technical and functional guidance is provided to foster the idea. In addition, leading GICs show commitment through their senior management to create the right enterprise level network to drive support and execution of ideas.

MotivationAlign performance to innovation goals- Employee performance goals not aligned to innovation goals may not help drive bottom-up innovation across the GIC. The centres must explore opportunities to drive innovation by linking organisation objectives to their existing performance management system.

Drive ideation at grassroots- GICs must focus on building an ideation culture at various levels of the organisation and not restrict it to only a part of the organisation. Drive the culture of ‘everybody can innovate’.

Align rewards and recognition to innovation- Create a recognition platform for contribution to innovation at an enterprise level and identify inputs to compensation, based on employee contribution.

People & culture

4. KPMG in India analysis, 2015; Interviews conducted with leading GICs.

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Real time data Leverage customer and operations data- Access to real time customer and operational data can be a powerful tool towards cutting edge analytics that can drive innovation. Leading GICs thrive on such data that have resulted in development of mobile apps and algorithms. This possibly has changed the way organisations interact with their customers and vendors on the process innovation front.

Look inside-out- Besides access to customer data, GICs must also leverage internal audit findings on an on-going basis and benchmark their maturity of operations to continuously improve and sustain innovation on the process and productivity front.

ToolsCollaborate through ideation platforms and social media- GICs have fostered two approaches to generate ideas– bottom-up (crowd sourcing) and top-down (innovation cell). Leading GICs have been successful in both these approaches with the support of right collaboration and social media tools. While many GICs leverage readily available enterprise social collaboration tools, few of them deploy sophisticated in-house tools.

Generate ideas from events and analytics- GICs must organise focussed events to generate ideas. On the technology and product development front, leading GICs conduct hackathons to address customer challenges while others run analytics camps to generate insights and drive innovation.

External ecosystem to drive innovation

Ecosystem How GICs can collaborate and leverage the ecosystem

Academia

• Long term research projects focussed on product innovation and ideation forums

• Few GICs leverage academia to solve complex business problems and build complex algorithms

Service Providers • Explore gain share model to drive process innovation and operational excellence

Start-Ups • GICs in the technology sector lead the pack by creating innovation accelerators in product innovation and the analytics space

GIC Network • Leverage the existing GIC clusters to share and learn leading practices

Capacity

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Guide to scale innovation at

GlobaI In-house Centers(GICs)

kpmg.com/in

kpmg.com/in

KPMG in India contacts:

Viral ThakkerPartner Management ConsultingT: +91 22 3090 1730M: +91 99 6706 8657E: vthakker@kpmg.com

Saurabh MathurDirectorManagement ConsultingT: +91 22 3983 6000 M: +91 98 3363 6933E: saurabhmathur@kpmg.com

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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Printed in India. (003_BRO0415)

SkillsHire the right talent- GICs must look at enhancing their talent acquisition approach by driving innovation and creativity related assessments to gauge the innovation quotient of candidates especially for product innovation.

Train the talent on creativity- Develop training modules and programs like Design and Innovation workshops to hone creative thinking skills of employees.

Align career path- Create positions, alternate career paths and growth prospects for employees who contribute heavily to idea generation, groom them to become Idea Champions and drive innovation in the GICs.

ExposureBuild business context- GICs can offer a secondment option to resources to move temporarily to the parent/business units to gain business understanding. This can drive innovation not only at a GIC level but also help them play a consultative role to the innovation value chain. Digitisation helps in gaining business context as it provides a platform for GICs to get closer to business.

Leverage domestic business- GICs, whose parent entity has a domestic business in India must make use of the opportunity to support domestic operations, get closer to the customer and build business exposure.

Build technology context- GICs can drive digital innovation by developing capability to build certain technology capability and tools in-house or leverage the external ecosystem.

Capability

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