EP1: The GCC Revolution of India ft. Lalit Ahuja

you know truly making India for the world GCC is an integral part of the organization it's not a outpost it's not a back office it's not a siloja [music] in three words how target happened in India >> it's not what you do but how you do what you do >> India is not a cost arbitrage play but rather a very strong capability center and a lot of products can be shipped directly or built from here and shipped globally >> GCC is a very loosely ly used term you know it means different things to

different companies the focus became more in terms of what's next [music] what's new what's tomorrow for these companies how easy or difficult was it to attract the right kind of talent to a global brand which did not operate in India >> when you have good people and you contextually empower them and enable them you know magic happens >> what are key impact metrics as per you that you know should be looked at when we [music] talk about GC H1B uh policy level changes that have happened in US what kind of impact do you haing on the

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series. It's called the GCC miniseries and who better to bring onto the GCC miniseries than a stalwart who has seen the beginning of this ecosystem has built it and is touted on and in circles as the father of the Indian GCC ecosystem and we have for that Mr. Lalith Auja who's the co-founder and CEO of answer for over two decades he's helped some of the world's most respected enterprises build outcomedriven GCC's from India which are shifting the conversation from cost arbitrage to actually capability creation but not just limited to that

we're talking about transformation we're talking about innovation and we're talking about major scale impact and lit we're thrilled to have you here sir today uh and you know joining you for this conversation uh and it's going to be super interesting because I've heard so many amazing stories from different people, different leaders about you and uh can't imagine what it would have been like you know about 20 years ago, two decades ago when uh this concept never existed in India or at least not the way it is existing today. We wanted to tap into some of these conversations with

you today. >> Sure. Looking forward to it. >> Thank you so much. uh sir of two decades ago when you started getting into the space in fact if we talk about your journey before that as well you've been CEO of some large organizations what what was the transition point where you thought that you know you wanted to start setting up GCC's and what was the landscape at that point in time >> so I set up my first GCC for LG electronics way back in 1995 >> wow

>> there was no formal concept of GCC those days and I had just transitioned out as the CEO of Datamatics. We were the third largest IT outsourcing company and had joined LG Electronics as the first CEO. 95 was when consumer electronics was transitioning into the convergence era. M so essentially it was all about software driving consumer electronics and LG as a company and South Korea as a country just didn't have the DNA to uh make that transition and they were looking towards India to you know get the necessary help. Mhm. >> So they went around talking to all

potential contenders, the large IT outsourcing companies and realized that you know ultimately they had to do something on their own. So it manifested in LG Electronics you know hiring the best talent in the market and setting up an R&D center that will help washing machines and televisions and microwaves be more softwaredriven. So that's how LG soft which in many ways was the one of the first um you know GCC's that I led came into existence. It's a fairly large capability today as we speak and almost does everything you know software for you know uh the LG group. The second

point of inflection was when I left uh LG Electronics joined Star TV as the CEO in early 2000s. That was also the time when um AOL bought Time War Honor and the writing was clearly on the wall that media was going to be a technology business in disguise of media, right? and Jerry Yang and uh Yahoo were chasing Rert to essentially acquire news corporation you know following the footsteps of you know what AOL did. Rupert's response was to you know invest heavily in India to establish a number of GCC's for the group companies 20th

Century Fox television Harper Collins Dow Jones so that was the second wave of GCC's in early 2000s uh much of it had to do with obviously the necessity of transforming a traditional company into technology technology you know manifestation. Uh in the process we ended up creating a company called NDS which um you know uh resulted in Tata Sky and brought the DTH uh revolution in India became a global market leader you know building products for the global broadcasting industry. So, you know, before I started answer, these were, you know, two experiences

over a 10-year period >> to essentially help, you know, two large, you know, very traditional companies that just didn't have the technology DNA transform themselves completely into technology companies through a GCC kind of a business model. >> That's fantastic to hear. In fact uh sir if I'm not wrong as part of answer one of the first companies that GCC's that you set up in India was target uh I was uh lucky to be a part of target at one point in time as well of course by then you transitioned on to a bigger role and you know doing a bunch of other things

as well uh NIT was the India MD by the time I joined in. Uh >> and I've heard a lot of interesting takes on how target happened in India. uh do you want to share a little bit of that perspective because I've heard that you know you met the then CEO over a flight and that resulted in a conversation in the target boardroom. Do you want to share us a little bit of a perspective about how that transition happened? >> Yeah. So you know the seeds for you know target India was sewn really in 2004. I had a chance meeting with Bob Olrich.

He was the legendary chairman and CEO of Target. This was actually over a lunch meeting. >> Mhm. And this happened at a time when you know there was amazonization of retail that was beginning to take place and most traditional retailers like Target and Walmart were struggling with the same DNA issue right I mean if you have to move from a traditional brickandmortar retailer to an e-commerce you know technology company it just requires a whole different approach altogether together. So, um, target was very clear. They

couldn't have done this in Minneapolis. They were very dependent upon, you know, uh, a host of, uh, service providers, uh, who obviously didn't have the right context and the empowerment and the capabilities to do something like this. And one thing led to the other. In 2004 is when over a lunch meeting we decided that uh you know we would do uh target India. Uh Target didn't initially buy the story of you know coming to India on its own and build the ability to hire the best talent in the market. So we ended up doing a joint venture with Target which essentially meant we put

our skin in the game and the whole deal was to create an insanely successful capability uh in return for the equity that Answer had. So not too many people know that when we started answer we were supposed to be just a one customer company. You know the whole business was around you know helping target establish its second headquarters and build technology and analytical capabilities for the future. So that's how we really got started in 2005. >> Uh you know we formally started the the operations.

>> That's fantastic to hear. In fact uh target has been a place for a lot of first uh I remember since I was leading innovation uh after Mahesh and Ravi at target in 2016 I was made to understand in 2013 the target accelerator program had started and uh interestingly enough uh in the whole GCC ecosystem we have seen a lot of mapping of activities operations happening from the headquarters to India but target on the other hand started an innovation center in India before they started one in or in Bangalore rather before they started one in Minneapolis. So there's been a

lot of first there when it comes to target. So thank you sh for sharing that story as well. It's it's fantastic to hear that. Uh I also wanted to tap into this you know we've been talking about GCC's but if I'm not wrong the term GCC as a capability center came in about 6 8 years ago. Prior to that it was called an offshore center or a GIC and different terminologies have been used. Uh in fact my understanding is that you know there was a lot of cast cost arbitrage as the major lever which a lot of companies would factor in to start thinking of setting up shop in India.

Did that was that really a challenge? Was that the main perspective or were there other challenges like um perception about India perception about or challenges around regulations compliances and other aspects uh that you had to go through to set up this environment at large. Yeah, in many ways uh nothing has changed over the past 35 years since I have been doing you know GCC's right >> you know it's the same process of setting up a legal entity and you know what goes in creating an employable proposition you know how do you attract

talent and empower them enable them and get the work done so the regulatory environment has been fairly stable What has really changed is the evolution you know that has led to the maturation of the GCC's. I mean think about early mid '90s when companies set up R&D centers. They were just another office of the company. They were they didn't have a formal nomature in that sense. At some point we started using the concept of captive and then it became global in-house centers and then came the concept of global capability centers and I guess the next iteration

you know all these prefixes are going to be demised. it's just going to be the company in India and I think target was one of the first companies to essentially use the concept of target in India and target India rather than you know um calling themselves as a GCC of the uh of of target. So one thing to you know speak about over here is the fact that in many ways GCC is a very loosely used term. >> You know it means different things to different companies. Uh the context is you know extremely important but we're getting to a point of convergence in

terms of what it really stands for. >> Right. In fact, I've seen some news reports uh which have called out certain Indian companies and their technology arms as GCC's as well in the top 10 ratings or rankings for various aspects right and it was very strange for me to fathom some of these insights thinking that you know these are Indian companies why are there uh you know IT environments being called as a GCC but uh like you mentioned you know it's a very loosely framed term at this point in time where uh any capability center which is shipping products globally or

solving for or providing global solutions could in some senses be called as a global capability center as well. >> Uh what was the change that you have noticed that that transpired which led to the in-house centers to convert into capability centers? Where was the transition? what was the maturity curve which made people believe that India is not a cost arbitrage play but rather a very strong capability center and it's not just about mapping whatever is happening in the headquarters but a lot of products can be shipped directly or built from here strategized from here

built from here uh along with the mother ship or the headquarters and shipped globally >> yeah no that's a great question so you know just reacting to your earlier comments I think as GCC started Ed becoming more mainstream. Everybody wanted to have a play in the GCC industry and there was a very simple notion of if you were a subsidiary operating in some form in India, you could be a GCC or a GIC, right? So that uh you know companies that wanted to play in that industry could you know effectively credentialize themselves as

being legitimate GCC players. uh the inflection point from GIC to GCC happened as part of the differentiation uh between what it took to build capabilities around transactional commoditized functions that will ultimately lead to cost savings to becoming more of you know or leveraging competency and capability arbitrage in contrast to cost arbitrage. Right? So the arbitrage game moved to more capability competency. The focus became more in terms of what's next, what's new, what's tomorrow for these companies.

>> And that is where the concept of capability came in. The concept of capability also came in when the digital transformation journey became a big quest for companies. Right? So in order to accelerate digital transformation journey or to add to the capacity you know companies had to invest in you know capabilities that didn't traditionally exist in IT organizations and that's how the concept of capability you know came about in I would say in more like 2010 2015 kind of a time frame when it became more around a GC PCC being a repository for some of

the essential capabilities that a company needed to develop to keep a breast with where the technology was and to also leaprog on their you know evolution and transformation agenda. >> Got it. Makes a lot of sense. Uh was there any specific moment in time uh you know considering that you know you've been building and contributing towards the buildup of this whole ecosystem uh in India. uh was there a specific point in time where you felt that this is how India will be perceived going forward as the hub for creating capability centers for building capabilities for some of

the largest enterprises across the globe and even though we don't see the consumer sitting out of here but the conversations the product building the innovation the digital transformation journeys is going to create impact across the world and the consumers across of the world as well. >> Yeah, you know, I saw this unfolding, you know, in 95, you know, with LG. >> So, I've had the, you know, good fortune of not having gone through the evolutionary journey that the industry and many of the other companies have gone through. The story from our

perspective and from my personal perspective has been very simple. M >> you know when you have good people and you contextually empower them and enable them and unleash them to solve some of the most complex problems you know magic happens right >> so it is about a few things it is about good people it is about empowerment it is about you know providing them with the context the enabling resources and then waiting for magic to happen. I guess in some ways GCC's are also a very India thing. Okay. And the reason why I say that is it's very cultural. We we

derive that exhilaration that comes with the impact that we can create. We feed on the recognition that goes by doing you know truly impactful work. We feed on the empowerment that is given to us uh to solve complex problem. We are very adaptive. We are very flexible. You know, it's very unique to our culture. You know, we do GCC's in many countries, right? >> So, you don't see some of these attributes in terms of how quickly we can immerse ourselves in a particular environment, in a particular culture, with a particular problem. we make it

very personal >> and we'll do all it takes to solve that problem. So going back to that inflection point in 95, I mean imagine an a large you know conglomerate, global conglomerate 80 billion that had a very u you know burning platform in the form of not having software capabilities to stay relevant in the consumer electronics industry and India and a GCC like model >> did the trick right. So ultimately it what came out was you know truly make in India for the world right. So we changed the word of consumer electronics you

know through the work that LG electronics did out of their Bangalore R&D center >> u in early 2000s what NDS did not only in bringing Tata Sky to India and the whole direct to home revolution but also creating a product company that became almost a global monopoly. in technologies and products for the broadcasting industry. So um it was all coming out of India. So I'd seen very early on the power of the possibilities right in terms of just people and problems and context and empowerment. >> That's that's fantastic to hear. So you

spoke about the evolution. You said that you know your vision was uh very early on for you. This did seemed like an evolution because you were able to see through a lot of these changes that were likely to happen, right? And you said that you know this is how on this vision the DNA of answer was set up on, right? Uh but did answer as a large organization go through an evolution too with the changing uh economic models, business models and the way uh GCC's at at large operate. >> Right. So you know we've obviously in many ways pioneered the industry and as

GCC model started becoming mainstream we had to mainstream ourselves and you know follow the track. So I want to make a few points over here. You know we had the unfair advantage of starting off with a company like target. you know, target um is in many ways a gold standard, you know, when when it comes to everything GCCs. I mean, how do you get the model right from the outset, from the get-go >> way back in 2005, you know, we are almost at our 200 GCC now and uh you know, we've not done another target, right, in 20 years. So which essentially

means that the best was done you know even today 20 years back and a lot of it had to do with you know how target came about right the level of um executive sponsorship and advocacy the second headquarters model the fact that it was about getting the best talent from the market it wasn't about cost arbitrage it was a lot about enabling and empowering teams. It was about providing consistent brand experience uh to the employees. So the evolution that we went through after Target was to sometimes take a few steps back and start off at a very different point

which was you know in many ways much lower than where target already was. But you had to you know play to the industry. You had to play to the specific needs of companies, their requirements for organizational change management and to get used to you know um what a GCC could do to disrupt how work got done. Makes a lot of sense. Uh I also wanted to check in on one last thing. Uh talent density plays a very important role. uh how difficult or easy was it to attract Indian Indian talent at that point in time when they had not

heard of this concept? A lot of people uh would not have heard of the the the brands such as Target while it's one of the most renowned brands globally when these brands were coming in. Target doesn't operate in India in terms of shipping to consumers or they did not do it at that point in time. So how easy or difficult was it to attract the right kind of talent to a global brand which did not operate in India? >> Yeah. No, I think that's a great question and I think if I have to talk about one, you know, difficulty that we went through early stages of our

evolution as a company, it was, you know, convincing the best talent in the market that a company like Target was an attractive carrier proposition, right? because uh it was almost inconceivable that you would get the kind of carrier parts that a large service provider could give you with a very traditional company just that just didn't have the appreciation and DNA uh from a perceptive perspective uh you know compared to other constituents in the industry. So there was a lot of work that had to be done in terms of you know creating that value proposition

you know those branding strategies to you know uh go out you know with stories that will resonate with certain kinds of people. Uh so the problem further got compounded you know by the fact that you know nothing but the best would do from a talent quality perspective right so you couldn't just pick and choose anybody but you had to find the best you know people to do the complex work that was coming into you know target India. So it was very difficult. It took time and you know in many ways companies like Target pioneered that whole concept of you know creating that fungeibility of

how talent would move across different clouds or different you know types of career options you know in the market. >> Fantastic. uh speaking about talent uh and you had spoken about this very interesting uh perspective about Indian cultural ethos which leads for people to be very passionate about the talent to be very passionate about what they're trying to solve for right specifically solving complex problems and making it very personal to to to be able to achieve that and deliver that right uh how are genzies approaching this today because their perspective about life

work life balance is very different and uh today If Gen Z's have options to join a GCC versus let's say a startup, how would they look at that and why would they make it so personal about uh delivering? Do you see some challenges there as well? >> Yeah. So I mean obviously the priorities are changing >> uh and therefore you know you have to take a whole different approach in terms of how do you create an attractive proposition for the Gen Z's. Um the real fact remains that GCC's largely hire experienced lateral talent you know that

commensurates with the quality of work and the complexity sophistication of work that comes in >> right >> uh so uh you know the problem is not as compounded but as the uh number of GCC's coming in is increasing and as you're looking at doing more AI and you know more futuristic kind of work you need talent that has those capabilities. You know this is the next frontier in terms of how do you you know create those attractive proposition for this segment of workforce to you know make GCC's as

an attractive proposition. uh the good thing is that GCC's offer you know a more conducive you know customized kind of an environment you know unlike a services company so you know you can you know settle in based on what your you know personal preferences are in many ways you know the investments that GCC's make in learning and development and you know ensuring that you and maintain your individuality >> uh you know the uh incentives that are given you know to work in a particular way so I guess it'll all ultimately play out well but early days and you know we

hope it'll play out well. >> Sure. uh I've noticed uh in in the last couple of years if I'm not wrong uh a new term coming in when we talk about GCC's GCS are now also clearly called out as innovation centers and when we talk about innovation uh wanted to take your perspective what is that evolution like are is it at a particular maturity curve that a GCC becomes an innovation center and are there as part of innovation centers are there is there expectation to tap into local innovation uh ecosystem for example with startups or

academy and other other relevant R&D partners too. >> Yeah. So you know not very long ago GCC's used to go through a fourphased evolutionary process. Typically it would take them 2 to 3 years to get to phase 4. >> Okay. >> The first phase was more experimentation which means GCC set up as a experimental platform. You're trying to figure out whether you can hire the right talent, whether you're in the whether you can integrate with the company, whether you can contribute, you know, the value or

the perceived value, uh, which was part of the original business case for the GCC. The second phase had to do with optimizing the GCC in terms of form, structure, team, span of control, all facets. The third had to do with scaling up of the GCC. You go broad and deep, you take other functions, you take more complex work in the same function. Uh and you become more mainstream and that was the concept of you know scaling up. So you are like any other part of the organization and you have the trust from the organization and the fourth phase was innovation right. So the concept of

innovation came only when you had earned the stripes and the trust to you know be an integral part of the organization. Today majority of the GCC's skip the first three steps. They just arrive. uh much of it has to do with the benefits they can acrue by being a late mover right the market is mature there's plenty of been there done that talent >> people have been through the journey so when you hire from other GCC's they bring in a lot of insights and learnings that help companies in skipping the first three steps >> and getting to a level of maturity which

means you can be an innovation arm for the complete company right from the outset and you know GCC's in many ways are also helping companies innovate innovation right so uh part of it which is now as we all know uh is becoming mainstream is how you know there is an active startup grown-up corridor right >> you know where uh companies are looking at startup solutions to their problems Right. >> Right. So it is now you know an accepted way of bringing in innovation into the company. There are some other interesting aspects of engaging with

startups. >> You get to engage talent that's out of the job market. I mean these are individuals who are chasing their billiond dollar dreams. They bring in culture and level of edgginess that sometimes GCC's don't have. So they also do a makeover in terms of how work gets done. I've seen companies where you bring in startups that thrive on a cold cup of coffee and a slice of pizza and they work you know non-stop and it energizes you know the GCC workforce to emulate them >> you know so it also has those uh other

sort of motivational sort of impacts. Uh so this is you know going to only further you know get more intense deepen mature as we go along. Some part of it is also maybe a lot more of B2B or relevant startups coming into the market. Uh and you know ultimately it's the ecosystem effect right >> you know GCC's are nothing but enterprises which means they are customers. So there are obviously lots of startups starting because the customers are right in your backyard right so it's a lot more convenient way of engaging with a large company uh you

know doing it through their GCC >> totally in fact uh having led innovation for companies like target in India uh AB&B and lose and then eventually at TBS as well uh I have noticed the whole evolution in the models with which enterprises are now interacting with startups specifically the GCCs are now interacting with startups as well. Uh I remember a time in uh the early GCC innovation journey in 2013 when target SAP and Microsoft set up their innovation arms in India accelerators as we would call them back in the day. uh there was no concept of

paid PC's then 2016 some of us started pushing for paid PC's so that you know there's more skin in the game for from enterprise standpoint also to partner and deliver outcomes and cut to today uh those models have been completely I mean they've quite considerably changed you know not everyone wants to do an access program and I think everyone has a different need in terms of how they want to tap into innovation and where exactly in the maturity curve like you mentioned that they are in as Well, so very fascinating to know your perspective on this. In

fact, Chiron was one of the first few uh you know, >> in 2012. >> 2012. >> So, you know, we were an early mo in the market and Target was a first customer >> and it was an interesting, >> you know, proposition of connecting the dots between startups and grown-ups, >> right? uh and we did that for a number of companies and then of course we merged Kairen with Tech Stars and uh and of course when we did the joint venture with Tech Stars. >> Yes. No fantastic. I I also wanted to

get into um a very important aspect today on social media. We have uh you know so-called lot of experts on GCC's who are shaping the societal view uh you know about what GCC's are actually creating value for right or what's the true value creation. Uh there seems to be a lot of vanity metrics out there and there have there are obviously a lot of actual impact metrics. what are key impact metrics as per you that you know should be looked at when we talk about GCC's. >> So you know we've always taken a very different view. GCC's are an integral

part of the organization. Same is same. You got to be the organization. What works in the home office should work in a GCC. You should not treat the GCC any differently. Right? So there are maturity frameworks. There are cost and productivity metrics and sometimes they tend to become very divisive >> from the perspective of how a GCC integrates with the mainstream enterprise. I mean, target was a great learning for us when we were beginning to look at what should success look like from a target India perspective and what

are some of the KPIs and metrics we should use to measure our performance and return on investment and very early days we realized that a lot of it was not very relevant right so we have maintained that for the last 20 years 200 GCC's we've never reported cost metrics we don't believe in these maturity frameworks I think you got to do it in the context of an organization and maintaining the integrity of the broader organization if it makes sense to you know use certain metrics for a specific body of work or outcomes that a GCC is expecting ed to drive you know

those metrics can be brought in but you're not a services company right you're an integral part of the company so how well you integrate how much you are the company how consistent you are how the talent is the same bar how some of these you know some of the GCC talent will become enterprise leaders is the way you should measure measure the efficacy of you know a GCC how seamlessly you know work can move across borders >> you know how you know uh boundaryless an enterprise begin becomes right >> so that's a concept we've been using

>> it stood the test of time it's a very contrarian view >> from rest of the industry but we believe if you're on a journey to become the enterprise you know you got to shed added some weight around uh complexities and you know jarens that will make ultimately GCC a very divisive concept. You know that's fantastic to hear because a lot of people keep speaking about cost efficiencies as metrics as well as headcount to talk about how successful that uh GCC is in India right uh but to your point that that's so sent and uh important for people to look

beyond these factors into actual mainstream KPIs which are relevant to the headquarters as well right in fact speaking of the headquarters uh I wanted to touch upon two things one uh that I'll get into first uh would be uh you know you have spoken spoken a lot about a harmonious uh relationship between the mothership or headquarters with the GCC. Uh could you could you share some perspectives on how uh GCC leaders should build out this kind of a relationship which is uh not a master servant relationship in many senses of it but like uh you know

putting these GCC's as equal partners in many ways towards the growth of the organization. >> Yeah. I think uh GCC is an integral part of the organization. It's not a outpost. It's not a back office. It's not a silo. >> So you just happen to work for the same company but in a different office in a different location. So if you simplify this thinking that you work for a company and your it's just that your office is in another location, it could be another building in a in a campus. So think about the GCC being, you know, part of a large global campus. You the

building just happens to be on a different floor or 10,000 mi away, you know, uh and maintain that simplicity. So I think that overarching outreach to ensure that you know you are always integrated you are you know part of the organization and never think you know you are part of a very different manifestation just simplifies that whole thinking I mean early days of formation of a GCC we very fiercely you know uh undertake efforts to you know demolish any divisive you know tendencies that may

sometimes come in. >> Uh a lot of times it is you know it's coming from people who worked in organizations where just just used to operating in a you know mother or a parent child kind of a a relationship. I mean it is uh there is parity in some ways >> if you're part of the same organization uh and that concept has always stood the test of time. So stand up the GCC as an equal partner you know people do work that obviously is no different from how work will get done in the home office >> makes a lot of sense. Uh so I was

talking to a couple of uh leaders uh in the last few weeks. One of them is Iod Devit who is the council general to the kingdom of Netherlands uh uh for South India and uh also with Sanjiv Gupta. He is the CEO of KDM critical economy mission. So both of them were also sharing their perspectives on GCC's right. So Iv was talking about how some of the Dutch GCC's like a Heineken uh has set up shop in Hyderabad right but Philillips is in Bangalore and uh let's say Shell is in Chennai right and uh Sanjie also had a very interesting perspective about how they are talking

about Bangalore and beyond Bangalore Bangaluru clusters as well right uh I wanted to talk about this aspect that you know what are certain changes that you're seeing because I know you have as answer a lot of partnerships with various state governments as well. The recent one uh being in Maharashtra and then Andhra Pradesh as well, right? Uh Karnataka of course has been one of the hottest hubs of uh GCC's in the country but Hyderabad is growing very very strong in that space as well. What are the policy level changes that you're seeing that are happening and how is

that helping the growth and which states do you think are really contributing towards or differentiating themselves when it comes to these policies? Yeah. So at a very broad level there are obviously the established locations the six locations that we all know Bangalore, Pune, NCR, Chennai, Hyderabad and these are the locations that account for majority you know more than 95% of the GCC's. There's an emerging notion of emerging locations, >> you know, and it's a question of time before they start getting, you know,

adopted or they come in the consideration set. For certain kinds of companies, it's a longdrawn process. You don't, you know, become overnight sort of destinations. There is a whole ecosystem that needs to be built. Right. >> Right. So you need to have the real estate. You need to have the connectivity. You need to have social infrastructure. You need to have talent of a certain caliber. GCC's hire experience, you know, lateral talent. They live in big cities, you know, because they have families. They need access to certain,

you know, uh, social amenities that are not available in some of the emerging locations. So there is a national framework for emerging locations that will be published by the government in in a matter of time >> right. >> Uh a lot of us have been working on that framework. Uh it is currently being given finishing touches before you know it is reviewed by the government and is legis legislated in some form. And essentially this framework will provide some sort of an unfair advantage to the emerging locations

>> so they can come up right. It's not going to be a very natural intuitive process. >> It will require some push from the government and that's what we're thinking about in terms of what would that mean? How do you improve the connectivity? How do you bring in you know uh gradea real estate? How do you bring in more hotels? How do you create more malls? How do you create, you know, public private partnerships? But essentially, it's got three components. Uh what do you do from a talent perspective,

>> right? >> Uh upskilling and obviously talent migration, AI will play an important role uh and will make the job easier for these emerging locations. You won't need people, right? So you can if anything can be done by AI you can do it in Timbuktu for that matter right the second is more around infrastructure you need you know mana like infrastructure which indor possibly doesn't have as an example and the third is ease of doing business right so these are the three pillars in terms of what that uh national framework for emerging

locations you know would look like I think the there's some level of saturation in the uh existing established hubs. Uh so we need to decongest >> and we also need to you know have the broader impact of social and economic development you know uh benefit go to other parts of the country as well. So there's a lot which is underway. It's going to take time. is going to be slow and steady and some of these locations still need to build their own mojo and their own value proposition. What do they stand for?

Should they stand for GCC's from a particular part of the globe? Should they stand for some size of enterprises that will set up GCC's or should they stand for some you know focus around a particular industry fintech automobiles manufacturing energy pharmacy uh and you know how do you [snorts] create that ecosystem right so the good news is there's a lot in motion uh but I think we got to be patient I And it's taken us almost 30 years to get to where we are. >> True. >> And it'll not take that long for

emerging locations. It's coming. It's making its way slowly and surely, >> right? >> But uh it's still a few years away. >> Makes a lot of sense. In fact, uh you know, when you talk about emerging locations, I'm assuming Ahmedabad, Indor, Visag now, even Coimat. uh and coincidentally I was uh visiting Quoimatur about 3 months back on the invitation of a a few regional conglomerates and who wanted to set up a consortium to establish Coimatur as a GCC hub, right? And uh we were having similar conversations that uh how can

these conglomerates from a private party standpoint work with the the governments to establish a lot of this infrastructural aspect that you touched upon be it uh for the lateral migration you need uh entertainment schooling avenues to uh you know infrastructure for connectivity international flights and so on and so forth and and I think a lot of private players in these cities are now wanting to you know provide let's say real estate because they have colleges under their name they have real estate under their name and they're asking how can we work with let's say

someone like answer >> to to help us develop this ecosystem out here so there's a lot of that talk as well that's happening and it's very interesting to see like you said right this journey will take a few years but uh there's a lot of push coming in from the regional conglomerates as well >> yeah you know uh GCC is at the top of the food chain You cannot start a location with GCC. >> You can GCC's come somewhere along the journey, >> right? >> So, you know, you got to start with

services companies, you got to have the infrastructure, you got to have the universities, you got to have the ups upskilling mechanisms. Uh GCC's will happen. >> Right. >> Right. Because they are the next frontier. But uh if they are the next frontier, you know, they're not the first frontier, >> right? Of course. No, makes a lot of sense and thank you so much for clarifying that as well. Uh I wanted to also tap into geopolitical aspects when it comes to uh the whole ecosystem

developing right uh recently with H1B uh policy level changes that have happened in US uh what what kind of impact do you see happening on the GCC ecosystems in India? I think you know it's obvious that GCC's will benefit >> uh because [snorts] H-1B visas were really people going to work >> right and GCC's represent work coming to people >> right >> right so people happen to be in India in Poland in you know Manila or in Vietnam or you know Mexico so therefore the

concept of you know work going to people you know which is what a GCC really meant will be the beneficiaries of uh the impact of H1B constraints makes a lot of sense I mean I was also thinking from a perspective of the employees because some of the employees come in with a vision that eventually they want to move to the headquarters and that becomes a challenge with these kind of visa challenges that are policies are coming in do you see other countries will take advantage of this I was uh in fact in a chat with deputy mayor of London as well and he had a very clear

offer for Indian talent to actually you know move to London right uh so I think there are certain countries who are trying to make a play here saying that you know if you're not getting an opportunity to be in US >> we have amazing >> uh playbooks in our countries too and why don't you you know think about partnering with us >> yeah so I think we're mixing up two things over here right the desire of workforce to go to attractive locations from a livability perspective. You want to work in New York, you want

to work in London, you want to work in San Francisco, >> you know, which is a different dimension in some ways because you want to be >> in a place that obviously, you know, meets certain aspirational goals, >> right? >> And the second one is around doing some kind of work. Today you can stay back in India and do same or better work. True >> because the GCC offers you that opportunity, >> right? So and we do see that uh you know you can realize your American dream working for Target or Lowe's or Walmart

or Amazon or Goldman Sachs being in Bangalore you know getting to do the same kind of work but maybe it it doesn't lead you to you know relocate to some of these cities right so I think >> um you know I'll earlier on you know the whole American dream or you know going overseas dream had to do with three aspects you know how can you live well or live better >> right >> how can you make more money and how you can do you know good work today GCC's check two boxes most GCC's offer globally competitive compensation and

benefits >> true >> you do same or better work so it's just that you're not living in San Francisco so as long as you're happy living in Bangalore you are checking the other boxes. >> I I totally agree. In fact, I have lived outside uh on a few occasions. I lived in Europe as well, traveled to US too. I think somewhere uh deep down I think the kind of lifestyle that I can have in Bangalore. uh I would not trade that right that is of course my biased perspective probably but I I think a lot

of people are coming to the same understanding because of the pay parity like you mentioned you know the compensation skills fairly good uh uh the levels and second is the the actual work that we get to do in India as well right today >> yeah absolutely and I think it's going to change over the years uh in some ways H1B is going to be a big catalyst and I'm very optimistic it'll you know help in realization of our own vixit bar strategy you know accelerate our own social and economic development the brain stays here right

>> right so uh and we do more GCC's we do better work so I think overall it augers well you know some sort of a blessing in disguise >> dude we love that view sir thank you so much uh we speaking about uh the kind of work that we get in GCC's right today I think every GCC talks about being AI ready from the word go right when you're talking about setting up shop in India as a new GCC uh we talk about how do we lay out the fundamentals of AI frameworks AI architecture etc while building those capabilities and and uh you know of the GCC as well as the

technology capabilities uh you know what what are you seeing when it comes to a lot of technologies from generative AI to AI at large uh you know shaping the next wave of GCC's and how they operate and scale up. Yeah. So I think in some ways it is in works. We we know that the next wave of GCC's would be nonlinear manifestations. The output work output and the impact would not commensurate with the headcount that the GCC's have right there would be you know amplifiers that would be you know AI AI driven. M >> so that is very very obvious and I guess

it is uh two or three things at play over here. The first [clears throat] one is the maturation of technology itself right I mean we have uh inconsistent uh technology availability some part of it is the maturation some part of it is untried and untested >> right >> so organizations are risk averse so therefore it's going to take time before you know that mainstreaming happens in some ways The second part is the change management

that will come with adoption of AI because AI cannot be adopted in a pass through basis right >> you got to transform every facet of you know the organization what is the work and what work would look like in the AI era how would you do the work where would work be done and who would do the work right so it's going to be an agent or it's going to be a human or it's going to be a team of agent and humans. Uh the work itself has to be different. So you got to shed your legacy thinking and think about it very differently and that is going to be in

some ways the biggest impediment. Right? We are oversimplifying how AI would be a magic bullet and one day you know would you know deliver you know results that obviously everybody is promising you know on the on the side of the technology and platform companies. But there are there's change management, there's work reconstruction, there is workforce transformation. All those aspects at are at play. I guess the most important aspect is going to be uh finding out the right use cases because not everything can be done by AI. Certain work will require more people

right >> in the new world and some work you know will require no people. and there'll be space in between. So I guess we have to go through that journey. We have to be resilient and patient and flexible to go through that transformation which should be different for different bodies of work. >> Uh but that process is underway. >> Makes sense. >> I I guess um two aspects that will favor the GCC's. One is uh it's so hard to get AI talent globally specifically in countries like

US everybody wants AI talent. Meta is hiring and so is Google and so is Microsoft and they'll do anything and pay everything anything >> to get people. So therefore traditional enterprises will have to rely on GCC's and uh India. The second is the the fact that when you're talking about change management GCC's are you know by nature constituted in a manner where there's no legacy there's no you know u thinking uh that of how work was done traditionally in a company and therefore they're much more suited >> to undertake this kind of work. You have

people, there's affordability, uh the passion and some of the cultural attributes that we spoke about and the ability to change things, you know, would work in our favor. But I think it's a journey, right? If we give it the right uh chance to succeed, we'll make really good progress in making this a reality. >> Thank you. Thank you so much, sir. uh looking 5 years ahead uh what would future of GCC's look like you know we've seen a lot of evolution there over the years but 5 years from now what do you

think GCC's would actually what what's the form factor what would change over the next 5 years >> so I think a lot of things are going to change in many ways they'll become a lot more industry agnostic all kinds of industries luxury retailers you know automotive companies airlines hotels uh you know cosmetic companies, right? Restaurants, every anybody can do a GCC, right? In fact, uh you know, when we had launched our subscription model >> Mhm. >> you know, one of the ads

uh or the events that had inspired us >> was the launch of Air Asia in India. Okay. Okay. So when Air Asia brought in the whole concept of you know a budget airline >> uh at a very affordable rates you know they came out with this ad which said now anyone can fly. >> Okay. So when we launched our no capex subscription model you [snorts] know just making GCC's a lot more uh or all perervasive available concept right >> you know we launched something very similar now now anyone can set up a GCC >> so essentially

in terms of the future anyone can set up a GCC right it'll become >> an infinite market it's not just the fortune 500 or global 2000 it'll be the top million companies in the world. You can have five people and still run a GCC. You can be of any industry. It'll go beyond IT and its and business functions. You can design automobiles. You can design flying cars. You can design drugs of the future. You can make movies. What stops a movie studio to be a GCC? Right? So the concept of GCC will expand beyond technology

and uh that makes it an everlasting and endless concept and we all already pursuing some of those notions. They'll come from all countries countries where obviously there's a serious scarcity of talent of a particular kind specifically when AI becomes a lot more mainstream. There'll be the AI GCC's. You know, one of the sci-fi concepts that we have is can you have a peopleless GCC? Can you have a GCC that can be quickly constructed all agents, all digital talent that is culturally uh aligned to a company's way of

functioning? So a lot of conversations with some of the new age you know AI companies is around emulating ways of working uh of companies you know everybody does the same work but they do it differently so can you you know bring in this nuance and agents as well and I think the time is not far when you would have you know bolt-ons or even GCC's that'll have no people you can do it in your backyard, you can do it on your computer and you know uh so I think it's coming right >> so it's exciting how this whole concept of GCC's can be reimagined. I guess the

biggest driver is going to be how GCC's will help in re-imagination of businesses, industries and enterprises because companies are um big ships. They don't turn >> right. >> They can be derailed uh with any profound change like AI. So GCC's will be the big enablers for change. Uh, and that's the future, >> right? What a business or what a product or what a service would look like would potentially come out of a futuristic GCC. >> Thank you. Thank you so much, sir. I'm

I'm cognizant of the time and the posity of time that you have right now. So, I'm going to skip and rightly go into the rapid fire. I think no conversation is complete without getting so quick rapid fire questions out there as well. Uh the first one sir one word that defines the GCC ecosystem today. >> Talent. >> One word that comes to your mind when you think about innovation in GCC's. >> Uh innovating innovation. >> Brilliant. Three learnings that you would want the uh the next gen GCC leaders to adopt over the next 5 years.

>> Um culture, leadership and future maybe. your proudest moment as a founder. >> Um sitting here and talking to you and narrating the story. I guess uh we've come a long way and uh you know creating an industry you know has been uh obviously something that all of us are very proud of. >> It my privilege to I mean I'm it has been my privilege to hear these stories. Uh the most underrated skill for a GCC leader. >> Um

I I guess the um ability to you know integrate and you know become part of the organization doesn't come very intuitive. Everybody tries to uh you know uh demonstrate what they're capable of. But I guess the skill that is really required is you know humility and acceptability and adaptability >> right makes a lot of sense. Bangalore, Hyderabad or Chennai, which city would you bet on for the next wave of growth? >> That's a tricky question. uh you know I think each one to their own and uh everybody all of these cities

have their own advantages and they will all go in you know three different directions so I I guess the best of Bangalore, Hyderabad and Chennai is yet to come right we are at the end of the beginning right >> and uh you know the race really begins now >> no that's that's phenomenal to hear uh one book that changed how you think about leadership Uh I've written I've read almost all books of you know Steve Jobs uh including you know his biography and you know that's what has kept me going and

inspired me. Yeah. >> Wow that's amazing. If you could have coffee with any global CEO who would it be and why? Uh I would say um you know Rupert Murdoch you know he was my manager and uh you know he's an embodiment of you know um you know in some ways doing the impossible right fantastic uh a startup or sector you're personally excited about right now? >> Uh everything AI. >> Yeah. [snorts] What advice would you give to your own 25 year old self? >> Uh, do it again. [laughter]

>> Uh, Leahja in three words. >> I would say builder, believer, and beyond. >> Wow, that's fantastic. Thank you so much, sir, for taking your time and sharing such amazing insights with us. >> Thank you. >> So, this is for you. >> Thank you so much. Thank you. >> Thank you. I'm just going to read out these are gifts from some of our sponsors. Uh the first one the red box that you see is by Naranta which harmonizes India's ancient narratives and crafts with contemporary living

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