Shared Services Center (SSC) in India can contribute to global businesses in more than one way, i.e. Efficiency, productivity, cost, and all these help the growth. We discuss this below in detail.
Organisations often evolve organically, growing over time and becoming more complex with added redundancies, non-standard processes, and diverse technologies due to their geographic spread. These complexities can lead to inefficiencies, impacting profitability and hindering agility.
Many large multinational corporations establish a Shared Services Center (SSC) to address these challenges. This centralised operational unit is an in-house service provider, offering common business services to various departments and geographically dispersed business units.
Traditionally, Shared Services encompasses functions like human resources (HR), accounting, finance, IT support, customer service, and procurement. However, with technological advancements, SSCs have expanded their scope to include a broader array of business processes and back-office services such as compliance, legal, fraud detection, engineering, and design. By consolidating these functions, SSCs boost operational efficiency, enhance service quality, and minimise redundancies, facilitating seamless scalability for businesses.
In the contemporary landscape, modern SSCs harness cutting-edge technologies, automation, and optimised processes to streamline workflows and ensure consistent service delivery across all organisational units. This strategic approach enables businesses to operate more efficiently and effectively in a competitive environment.
Are SSCs Different from GCCs?
Captive SSCs, distinct from 3rd party SSC service providers, serve as centralised back-office units within an organisation. They offer shared services like HR, finance, IT, legal, and payroll to dispersed business units under the same company umbrella.
GCCs, also referred to as Captive Centers, play a pivotal role in fulfilling the parent organisation’s goals. They extend beyond traditional shared services to encompass functions like research & development (R&D), product engineering, and other strategic business operations.
Strategic adoption of SSCs by MNCs
As multinational corporations (MNCs) expand globally, SSCs have become a strategic tool for optimising business operations. SSCs provide:
SSC Standardisation & Efficiency
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- Centralised operations reduce redundancies and enhance process consistency.
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- Standardised workflows improve efficiency and ensure uniform service delivery.
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- Best practices can be easily identified and implemented across multiple business units.
Cost Reduction
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- Consolidating back-office services into a centralised unit reduces operational costs.
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- Economies of scale allow companies to optimise resource utilisation.
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- SSCs located in low-cost destinations, such as India, offer significant labour and infrastructure cost advantages.
According to Deloitte, organisations with SSCs reduce operational costs by 30%–50% compared to decentralised models.
Technology & Digital Transformation
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- AI, automation, and cloud computing improve efficiency, reduce human errors, and enhance data accuracy.
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- Intelligent process automation (IPA) helps streamline repetitive tasks, reducing turnaround times.
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- Robotic Process Automation (RPA) allows businesses to automate manual processes such as data entry and invoice processing
Adoption of RPA in SSC can reduce transaction processing time by 60 to 80% while improving compliance.
Talent and Expertise
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- SSCs serve as hubs for skilled professionals in finance, IT, HR, and analytics.
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- They offer career growth opportunities, enhancing workforce retention and development.
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- Access to specialised talent ensures innovation and process optimisation.
Fact: India produces over 1.5 million engineering and IT graduates annually, making it an attractive destination for SSCs.
Scalability & Flexibility
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- SSCs provide businesses with the agility to scale operations up or down based on demand.
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- Companies can easily expand SSC capabilities to accommodate growth in different markets.
Growth of SSCs Globally and India as the lead destination
The global Shared Services Center (SSC) market is on a significant growth trajectory. Grand View Research’s report indicates that the market demand surpassed 75,000 units in 2022 and is set to escalate to around 336,742 units by 2030, showcasing a robust compound annual growth rate (CAGR) of 19.8% from 2023 to 2030.
India stands out as a key player in hosting Captive Global Shared Services Centers (GSSC) for multinational corporations (MNCs). This trend is fuelled by factors such as a skilled workforce, cost efficiency, and technological advancements. Currently, India boasts approximately 1500 SSCs spread across different cities, generating an estimated revenue of US$ 50 billion and providing employment to about 1.5 million individuals. These SSCs play a vital role within the broader Global Capability Centers (GCC) sector.
The country’s transition from an agrarian-based economy to a service-oriented powerhouse has been swift, with a particular stronghold in IT and knowledge-based services. This evolution has solidified India’s position as a prominent global hub for Shared Services Centers, reflecting its prowess in delivering high-quality services to a global clientele.
Cost Efficiency & Operational Savings
One of the most compelling reasons for India’s dominance in SSCs is its cost advantage. Setting up SSCs in India can lead to cost savings of up to 50 to 70% compared to Western markets, thanks to:
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- Competitive labour costs: The availability of highly skilled professionals at lower wages than in developed countries.
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- Reduced operational expenses: Affordable real estate, infrastructure, and business costs make India an attractive destination for multinational corporations.
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- Government incentives: Tax benefits, subsidies, and relaxed regulatory frameworks further enhance cost-effectiveness for SSCs.
Large & Skilled Workforce
India boasts a vast and highly skilled workforce across various domains, including IT, finance, HR, analytics, and customer service.
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- With a median age of 28, India has one of the largest working-age populations globally, ensuring a steady supply of professionals.
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- Millions of engineering and management graduates enter the job market annually, with expertise in software development, data analytics, financial services, customer support, manufacturing and supply chain etc.
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- Government-led programs like Skill India and industry-driven training initiatives continue to enhance workforce capabilities.
Specialisation & Knowledge-Based Services
India’s SSCs have evolved beyond traditional back-office functions to offer high-value, knowledge-intensive services.
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- The country excels in Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO), legal services, healthcare, and financial analytics.
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- Indian SSCs are increasingly focusing on data analytics, AI, cybersecurity and consulting, aligning with global business needs.
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- Companies are investing in industry-specific SSCs, catering to sectors like manufacturing, healthcare, telecom and fintech.
Other factors making India attractive
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- The affordable digital infrastructure. Lowest-cost Internet and Communication links
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- Mature IT & Data Protection Laws
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- English Proficiency & Global Communication
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- Continued focus of the Government on favourable policies for GCCs/SSCs
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- Improving Infrastructure in Cities
SSC Landscape in India: Major Locations
India’s landscape for Shared Services Centers (SSCs) is robust and continually evolving, with several cities emerging as major hubs due to their strategic advantages. Many MNCs have SSCs in various cities in India. Some names that may be worth mentioning are – Amazon, American Express, HSBC, Bank of America, Barclays, Siemens, GE, Thomson Reuters, Vodafone, Airbus, Mercedes, Walmart, Cargill, Dell, Steria, Ford, Pfizer, Fidelity, Wells Fargo, Tesco, and Bosch. The list is long.
Here’s an overview of key locations, notable examples, and upcoming projects:
| Bangalore (Bengaluru) | A Cost-beneficial location with a Technology and Biotech cluster. |
| Pune | A cost-beneficial location with a Technology and Biotech cluster. |
| Hyderabad | An important destination in the East. Though it’s a metro by classification, it is comparable to Tier II Cities in terms of cost savings and employee retention. |
| Delhi, Gurgaon and Noida (Delhi NCR) | Best location north. High on the availability of Back-office operations at Manpower. Focus on finance and business operations. |
| Chennai | Cluster of Auto manufacturing, Banking and Finance and Technology |
| Kolkata (Calcutta) | An important destination in the East. Though it’s a metro by classification, it is comparable to Tier II Cities in terms of cost savings and employee retention. |
Other Centers and Tier-II Cities
Tire I cities offer high availability of talent, but this comes with the challenge of retaining employees and cost savings.
Tier II cities of Kochi, Trivandrum, Ahmedabad, Jaipur, Bhuvneshwar and Chandigarh provide a much better cost advantage for SSC for mid-size operations aiming for low-cost, stability and high employee loyalty.
Transforming SSC using Technology Adoption
The modern SSCs are using technology as a value driver. The modern SSCs also tend to be the early adopters of companies’ Digital Transformation, which is necessary for organization-wide efficiency.
Some of the technology adoption done by SSC are following areas:
Robotic process automation (RPA)
Uses software robots to automate repetitive tasks based on fixed process-driven and preprogrammed business rules.
AI + RPA-led Automation
Generative AI can learn and adapt to new processes quickly. Artificial intelligence (AI) can be combined to automate processes, yielding a higher degree of process automation. This is now rolling out as AI adoption increases and will define the cost + efficiency paradigm of the future.
Data Analytics
SSC process maps can be sharpened with the use of data analytics. Generative AI enriches data analysis by generating predictive and prescriptive insights with greater precision, allowing SSC to anticipate trends, identify optimisation opportunities and make data-based decisions with greater confidence.
Low-code deployments
Low-code development helps with the rapid development and deployment of workflows. It is being adopted for SSC operations. The new trend is the use of AI, with low-code upping the game in process automation.
In recent years, AI and automation have become integral to SSCs, streamlining processes and reducing operational costs. Many MNC SSCs in India are making the coupled use of AI with other technologies for better value.
For instance, Wells Fargo has integrated AI across various departments, automating tasks in corporate finance and customer service. This integration has led to more efficient operations and improved service delivery.
Similarly, ServiceNow has introduced AI-driven solutions to enhance IT service management. Their AI agents, launched in late 2024, assist in automating routine inquiries, thereby improving response times and customer satisfaction.
Moreover, the consulting industry has witnessed significant benefits from AI adoption. Major firms like Grant Thornton and EY have reported that employees save up to seven hours per week due to AI tools automating administrative tasks. This efficiency allows consultants to focus on higher-value activities, enhancing overall productivity.
Additionally, companies like Palo Alto Networks have implemented AI-powered solutions to streamline HR processes, such as onboarding and benefits management. This approach not only automates routine tasks but also provides real-time support for new hires, facilitating a smoother integration into the company.
Sustainability and Green SSCs
Environmental sustainability is now a key focus for global Shared Service Centers (SSCs) to meet their sustainability goals. These centres are embracing eco-friendly initiatives, like integrating energy-efficient systems and striving for net-zero emissions. Major multinational corporations (MNCs) such as Google and Bank of America have committed substantial funds towards these endeavours, aiming to create low-carbon, sustainable global operations.
Conclusion
Global companies are tapping into India’s skilled workforce, cost advantages, and digital advancements to boost operational efficiency. The country continues to attract multinational firms investing in state-of-the-art infrastructure and talent development, solidifying its position as a key global hub for Shared Services Centers (SSCs). Bangalore, Pune, Hyderabad, Chennai, and Gurgaon lead as primary Tier One SSC locations. However, the Tier II cities and emerging low-cost metros represent promising future destinations for businesses of all sizes.
India’s SSC landscape is rapidly transforming, propelled by AI, automation, and sustainability initiatives. Pune, Hyderabad, Gurugram, and Chennai are experiencing notable growth, with a focus on expanding IT parks, data centers, and global service facilities. This evolution underscores India’s pivotal role in driving innovation, economic progress, and enduring business metamorphosis within the Global marketplace.
