GCC business contributes 10% to Coforge revenue amid growing demand

Maddee Hegde, executive vice president and head of the company's business process service (BPS) and GCC units, told Business Standard in an interaction-Coforge is focusing in its core verticals

Mid-tier information technology (IT) company Coforge said its global capability centre (GCC) business already contributes about 10 per cent — roughly $147 million — to its top line, as it doubles down on a sector that has posed a stiff challenge to IT service providers.

 

Coforge is focusing on its core verticals — banking, financial services, and insurance (BFSI), and travel, transportation, and hospitality (TTH) — while also expanding its presence to help healthcare GCCs set up units in India, Maddee Hegde, executive vice-president and head of business process service and GCC units, told Business Standard in an interaction.

 

“There is this deep hyperspecialisation from an industry standpoint, which I think stands us in good stead. I am quite okay to say we will contribute 10–15 per cent, but Coforge has also been growing very fast. Now, if we cross the $2 billion mark, as our chief executive officer (CEO) mentioned, in the next two years, then $200 million would not be terrible,” Hegde added.

 

The company set up a GCC centre of excellence earlier this year to help clients establish and scale GCCs as an integral part of their businesses. It said many enterprises are struggling to drive their offshore strategies alone — a gap that is helping service providers across the spectrum engage with them and capture a slice of this hottest vertical.

 

Large IT service providers are also deepening their engagement with GCCs, setting up dedicated business units and appointing heads to manage them. Wipro and Cognizant are the latest to join the bandwagon, while Infosys and Tech Mahindra have been working with GCCs for some time. In July, Hexaware acquired two SMC Squared group companies for about $120 million to expand its GCC presence.

 

GCCs are the technology centres of foreign companies in India. Once called captive centres, many in the industry now prefer the term GCC, reflecting their growing maturity and greater autonomy from headquarters. Over the past decade, these centres have insourced much of the technology work that was previously outsourced to IT companies.

 

This shift has also led to higher attrition among IT firms, as GCCs often pay a premium over prevailing salaries — even in a muted job market — to attract talent in cutting-edge areas such as artificial intelligence, machine learning, data analytics, and cybersecurity.

 

Most of these centres operate under a build–operate–transfer model, where IT companies set up and run the centre for a few years — usually around five — before transferring it to the parent company.

 

For Coforge, the US and the UK remain the dominant GCC markets, with some traction also emerging in West Asia.

 

Hegde said Coforge’s relatively smaller size works in its favour. “The comfort factor with our size is very high. They go to a $30 billion company and worry they’ll get lost there. Here, they have access to a CEO-minus-one person.”