August 10, 2025

Is the old way of outsourcing from India fading? Bengaluru’s top IT bosses may disagree, but the story unfolding says otherwise. Back in 2015, the visionary Vishal Sikka, then CEO of Infosys, made a bold move by investing $1.4 million in ANSR (pronounced Answer). ANSR helped big foreign companies set up their own tech teams in India, a neat twist from the traditional outsourcing model run by Infosys, TCS, and Wipro. Long ago, companies sent their work to Indian IT firms to save costs. But by 2013, big clients like Bank of America and Procter & Gamble started bringing those jobs in-house—called insourcing. By 2016, this trend was more than a trickle. Even UBS, the Swiss bank, went against the grain and began doing up to 60% of their tech work inside their own Indian centres, leaving the old 70% outsourcing model behind. Indian IT leaders weren’t worried at first. N Chandrasekaran, then TCS’s boss, casually said, “captives” (now called GCCs) would coexist with outsourcing and weren’t threats. But after Sikka quit Infosys in 2017, his investments including ANSR were sold off for a loss. By 2018, the question “Are you insourcing?” popped up for every IT company. Giant Citibank, after making $1 billion selling its captives to TCS and Wipro, eyed setting up its own tech centre in India. Covid's remote work boom added fuel to the GCC fire. Today, two GCCs plant their flags in India every week, totaling 1,700 centres and employing 2 million people! HSBC noted in 2024, “The revenue of GCCs has been growing at a CAGR of 11% since 2015 vs. 8% for top five Indian IT companies.” Their share of IT exports jumped from 18% in 2015 to 23% in 2023. Accenture invested a whopping $170 million in ANSR last August, scoring a board seat. Cognizant even called GCCs a “threat,” confessing every one of its clients is considering or already has a GCC. But why the sudden rush to bring tech work inside? It’s simple: speed and control. When phones got smart and shoppers went online, companies wanted tech to be part of their core, not something outsourced. Markus Lickert from UBS said in 2016, “We have seen our IT and BPO partners sometimes struggle with the pace of innovation.” Indian IT firms faced a hurdle—they were used to slow “waterfall” projects, often failing to deliver value. The new star was the ‘agile’ model—quick testing, scrapping bad ideas early, and moving fast. But Indian IT companies had separate teams doing routine testing, making the agile move tough. Clients picked GCCs so they could innovate faster and keep control of their high-value tech work, leaving the low-margin, repetitive jobs to Indian IT firms. Commonwealth Bank of Australia is a perfect example. It once had 2,500 workers at TCS. Now, it has a 2,500-strong GCC in India and is doubling it, while TCS shrank to 500 employees on that contract. This tug-of-war hits IT companies on two fronts: business and talent. GCCs offer better pay, perks, and work-life balance. Vinu Nair, from recruitment firm Antal International, reveals only 1 out of 10 IT company candidates get hired by GCCs. But the prize is sweet — starting salary is double and pay rises are 10-12% annually. Indian IT giants aren’t sitting still. They’re rolling out “GCC-as-a-service” models—setting up and running GCCs for clients. New leaders like Sailaja Josyula (Cognizant) and Deval Shah (Infosys) are hired for this push. Coforge reports 1.5% of its revenue from creating GCCs and 8% from working with existing ones, hitting nearly $1.5 billion in FY25. The future? Analyst TJ Singh forecasts, “By 2028, third-party IT and ITeS providers will generate or influence over 50% of their revenue through GCC partnerships.” Still, the shadow of uncertain US policies hangs overhead. Pareekh Jain warns that if service tariffs hit, it might slow GCC growth, hurting both the IT companies and GCCs. In this spicy saga of outsourcing versus insourcing, Indian IT giants must innovate fast or risk being left behind in a game where customers now prefer to play at home.

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Tags: Indian it industry, Global capability centres, Outsourcing, Vishal sikka, Infosys, Insourcing,