Evolution of the GIC Model: Do GICs Really Add Value Beyond Cost Arbitrage?

14 Oct 2014
by Prashray Kala



The Global In-house Center (GIC) model was initially adopted to only take advantage of labor cost arbitrage. Over the years, as companies have realized the benefits of arbitrage and the model has scaled, GICs have achieved a “seat at the table”. Some GICs have evolved from being low-cost delivery centers to becoming strategic entities within the organization, however, majority of the GICs are in the early to mid stages of evolution.

Stages of GIC evolution

While, GICs are creating business impact for their parent organizations in various forms in addition to cost arbitrage, the quantification of impact lags behind “actual” value addition. As GICs look to increase their play within the organization it becomes crucial to identify levers to increase business impact, as well as to measure and communicate the value addition to the parent organization.

Defining “value created” and identifying methods to measure value addition has, till now, been a puzzle for most GICs. This report assesses the current state of the GIC market in terms of maturity of model and aims to help GICs in their maturity journey by identifying value addition levers and providing a framework to help quantify the business impact created.

Scope and content

The report presents views on the following topics:

  • What are the areas where GICs add value to the parent?
  • How are GICs perceived by parent – as a low-cost set-up or strategic entity?
  • What is the current state of the GIC market in terms of maturity of model?
  • How do leading GICs articulate and substantiate their value?
  • What is the approach of the leading GICs for measurement and quantification of value addition?
  • What can GICs do better to present their true business impact to the parent?

GIC incremental business impact delivered


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