Saurabh Gupta — HFS Research[00:22]
Hello, hello, everyone, and welcome to another edition of HFS Unfiltered. In today’s conversation, we’re going to talk about Global Capability Centers, or GCCs, the topic that’s dominating the IT services industry right now, especially in India. And I have a super special guest with us today, Swaroopa, who’s the head of Eastman Chemicals’ Hyderabad Operations Center. So, welcome to the show, Swaroopa.
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[00:50]
Thank you, Saurabh.
Saurabh Gupta — HFS Research[00:50]
So Swaroopa, let’s start with a bit of background on Eastman Chemicals and how does your India center cater to the broader strategic goals at Eastman?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[01:04]
Yeah, so Eastman is a 100-plus-year-old organization, based out of Kingsport in Tennessee, and we call it the Hyderabad Operations Center, the Hyderabad office. It has been operational for the last 10 years now — close to, as of this week, we are 10 years. We are a shared services office here, catering to the various functions of the global organization, and essentially on the talent capabilities like any other GCC. So we deliver the core capabilities here in the digital space, finance, supply chain, and so on. So I think I can comfortably call it a microcosm of the global organization.
Saurabh Gupta — HFS Research[01:50]
Fantastic. So congratulations on completing 10 years. As you look back at these 10 years of existence of your shared service center, Swaroopa, what rises to the top as, you know, the two or three biggest accomplishments that you as a team have accomplished?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[02:12]
See, I joined Eastman around 1.5 years back, right? It has been a short stint comparatively, but I think the center as a whole has really catered to the global needs in a very impactful way. I can really call out a significant contribution in the IT space, because we started that as a pilot in Hyderabad, and eventually we scaled up the capabilities. So I can confidently say that the core digital capabilities we have — essentially the 34 digital products from Eastman’s offerings — are predominantly built and developed from the Hyderabad office. So that’s a significant contribution. And also on the engineering space, which is core for any manufacturing or chemical industry, we have the design services predominantly led from Hyderabad. So that is again one of the major accomplishments. And we do have a couple of areas 100% co-located in Hyderabad, essentially on the IT services, on infrastructure, as well as a couple of areas in the supply chain, where we are running the operations for the global organization 100% from Hyderabad. So I think I can definitely say it’s a combination of core capabilities in IT and a couple of unique capabilities that we are offering for the global organization.
Saurabh Gupta — HFS Research[03:44]
Fantastic. So, Swaroopa, as you look at the next 10 years, what’s sort of on the horizon?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[03:51]
See, I think like any other GCC, we started as more of an operations center and matured to a delivery center. So our journey has been a little humble in the beginning — we started in 2014, and we’ve relatively been small, growing the capabilities for the global organization. But I think we picked up speed since the pandemic. I would say 2020, 2021 has been where we’ve seen significant growth in the center. So, like any other GCC, we are aspiring to be a capability center for the global organization, where we can really be a strategic talent hub, driving the corporate agenda, not just in one area but multiple areas. Essentially, in the IT space, we are envisioning a few of the core capabilities being fully driven from Hyderabad to strengthen the innovation agenda for the global organization — that’s definitely one of the things we’re looking at. On data science, we are also leading the data agenda for the organization, be it the data hubs we’re talking about or the overall AI mission that we have. I think we have predominantly started our journey on that. And most importantly, like any other GCC, we are venturing into GBS, the global business services. So we are now looking at the complex capabilities to be delivered end to end from Hyderabad. Though we have not started that journey, there’s definitely a dialogue where we really want to leverage the talent here. So if you ask me two or three areas, one would definitely be the IT space, like any other organization, and the second would be more on the engineering space, because we are a manufacturing organization and we want to make sure we’re delivering to the core of the manufacturing services as well — whether it is the advanced design services we deliver from here, that is definitely on the radar. And most importantly, on the supply chain world, what kind of capabilities we can drive for the global organization because of the time zone advantage we have, spanning across Asia Pacific, India, and the US. So supply chain is also one of the areas we are looking at.
Saurabh Gupta — HFS Research[05:59]
Yeah, that’s fascinating, Swaroopa, because we are seeing that global capability centers are no longer just a place for only cost arbitrage. Obviously, you get cost-effective operations there, but it’s becoming more and more about skills arbitrage. And I think it’s the combination of, as you rightly mentioned, IT services, engineering services, and business services all being delivered out of global capability centers. But the one thing I wanted to ask — as you mentioned AI, and I think AI has a lot of different emotions attached to it. It’s exciting, but it’s also nerve-wracking at the same time. So are you excited by it? Are you a little nervous about it? Are you a bit of both?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[07:06]
I think I’m super excited about it, because if you look at 10 years back when the whole automation and RPA started, there was a huge panic in the industry about what happens to my role. And, cut short, I think we’re a good decade on from that place, right? So you see that the level of value creation we’ve added to the roles is significant. We are just trying to shift the low-hanging or low-value-added things to automation, and we are moving towards the more critical stuff that the human brain can process. AI is a different ball game. I totally understand it is really giving tough competition to the human race, but I strongly believe there are still a lot of things that humans can handle better than AI. So I’m not nervous, I’m excited, because if you look at the technology advancement, be it blockchain or AI or IoT, that is enabling humans. And if you look at it, the workforce is also significantly growing — the job opportunities we are getting. Though there will be some kind of panic, people really need to understand that I can leverage this to the best of my advantage. Don’t panic; make sure that you’re upskilling on it and trying to see what is the edge I want to get over the technology. I think that would be the first thing everyone should think about. So, in short, I’m excited about AI.
Saurabh Gupta — HFS Research[08:36]
Oh, that’s great. There’s almost a tale of two cities that’s happening in India right now. On one hand, you see a lot of these large third-party IT service providers having a bit of a rough time, to be honest — if you look at their growth rates, it’s either flat or declining. But on the other hand, you look at GCCs like yourselves, and there’s explosive growth in either expansions or new setups. So why is that happening?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[09:08]
See, I think most of the organizations, given the model is proven with the GCC, really want to tap into the potential of the talent here. And naturally, the level of commitment or the level of connect of an employee is much higher than a third party. If you’re outsourcing to a third-party organization, they build a product and deliver it to you. The way an employee can think through a product — an internal stakeholder versus an external stakeholder — that is definitely one of the things we see differently. And I think the other thing that is also very predominant in this whole game play is the shift of the organization, as you rightly said, from cost arbitrage to talent arbitrage. So when they want to really evolve the journey, they just have to start investing in their own talent. It is not plug and play like with the third-party organizations; they really want to invest in the talent, grow the talent to the global needs of the organization, and drive the innovation of the organization. And if you see, most of the firms have their general managers sitting in Hyderabad now — they are in fact looking at moving global leadership roles into Hyderabad, because they’ve seen that kind of significant contribution coming in from India Inc., if I have to say. So that’s the change which is driving it.
Saurabh Gupta — HFS Research[10:32]
You know, I think you’re right. You feel a little more in control with the GCC versus losing control, and given the model is proving out, more and more companies are jumping onto the bandwagon. So tell me a little bit about why Hyderabad — or let me ask you this, Swaroopa: why India? What’s India’s superpower, and then within that context, why Hyderabad?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[11:20]
See — good or bad, we are the most populous country in the world. I’m not saying that is the driving factor, but look at our education system. I think we are predominantly STEM-based. You see that hundreds of thousands of students, including Indian parents, have that fascination towards engineering courses and so on. So you have a large talent pool of entry-level resources available — that’s number one. Number two is, again, the cost arbitrage, the kind of cost play that we have is one of the strong cases there. And if you look at the kind of talent we have — not the entry level, but at every level we’re really talking about, be it in product management or IT services — education itself is a huge strength. And then, of course, the communication skills. There’s a lot of emphasis in our country about English being the language for us, right from day one of our schooling, the fluency of English and the way we communicate. And more importantly, something plays on our culture also — again, this is my view, but we always try to put customer centricity in every conversation we do, whether it is with a global organization or when we are talking to global leaders. I think that is also one of the key drivers really helping India be a favorable location. And our resilience to change — I think there is a strong appetite in our culture. Again, I speak a lot about our culture, but there’s a resiliency, an appetite for change. We are agile, we move on to change pretty fast. And the resilience is driven by the average age of Indian employees. If you look at it, 27 to 29 is the average age of most of the firms; in my firm, I think we have an average age of 29, 30 years. So that’s the kind of age of the workforce we have. And I think from a government perspective, the ease of doing business, the government policies which are really enabling these kinds of setups — that is also helping, which is pro-GCCs. So they’re getting a lot of perks setting up here. I think that is also really enabling the GCCs, in my view.
Saurabh Gupta — HFS Research[13:53]
No, that’s fantastic. So let’s talk a little bit about talent management, because that’s really the name of the game here. And you know, this is not a new model. We’ve seen GBS, GCCs, or even IT services, third-party services, in existence in India for what, 25, 30 years now? And you know, when the whole thing started, I graduated out of India and my first job was as a software engineer in one of these IT services companies. My parents were quite proud of me, and so was I — I was quite happy. But now, as I look at — maybe they had low expectations of me, but anyways — as I look at my nieces and nephews now coming out, there are so many opportunities in India. Unlike when I was growing up, they either want to join a startup, or create a startup, or join a technology company. Perhaps IT services and GCCs are no longer the only thing driving our cream of the talent, at least. So what do you think our industry needs to do to make this sexy again, to make it attractive for the top talent, to attract India’s top talent here?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[15:31]
Yeah, see, I think if you look at around 5 to 10 years back, definitely a GCC was not an attractive place for all the new entrants, because the initial phase of GCC evolution was that they were stuck to more of an operations kind of thing. Even though we are an arm to the global organization, it was always seen as mostly outsourcing kind of stuff internally also. So that was the mindset when we started. It was very difficult for us to attract the talent because we were really talking about the operational nature of things. But as you see the maturity of GCCs from operations to capabilities, innovation, or the business-driving things we are really talking about, I think that has changed the story of talent management a bit. Where we are really talking about, as I referred to earlier, global leadership positions in India, where we are leading the global capabilities for the global organization — that’s number one. We are talking about critical research and development kind of initiatives. If you look at it, most of the major firms have R&D centers also set up in India, because of the kind of innovative culture we’ve seen. So I think that is driving, to some extent, where we are really talking about the whole purpose of things. It is not just operations. Well, there is some segment of it, which is a reality and which can’t go away, but we have evolved towards the research capabilities, the critical and complex capabilities of the organization. And as I said, the complex leadership positions coming into India — that definitely is the new story for talent management, for attracting the talent. So you have to be very clear on what kind of purpose you are driving in India, what kind of capabilities you want to build, and storytell. Then it is not a difficult one, because I’ve seen that change in my organization itself, where the way we used to approach the market was a different thing — we do this, this is our offering — but now you change the storytelling and say this is what we’re envisioning and this is what we have started. I think we have seen some good talent onboarded in the recent past. So I feel it is all about making sure that you have a strong purpose, then you know what you want, and then target that kind of talent pool; then it is not a difficult one. Like, if you went to the premier institutes like the IITs in the past — oh, you are a GCC, probably we don’t even have any people coming in for the placement talks. But you now go and talk about the complex things you’re delivering and do hackathons and all those things with the students, then that’s an instant connect to the organization. So, it’s important that you talk about those critical capabilities you are driving from here.
Saurabh Gupta — HFS Research[18:36]
Oh, that’s fantastic, Swaroopa. This was a really, really interesting conversation, but I wouldn’t let you go without asking this hypothetical question, Swaroopa. So let’s imagine you have a magic wand and you could make one wish come true. What would that be?
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[18:55]
OK, if it is with respect to Eastman Chemical India Private Limited, I want to drive the R&D capabilities from India for the global organization — drive, not contribute, but drive the R&D capabilities for the global organization.
Saurabh Gupta — HFS Research[18:55]
I think we’ve covered the three value propositions here at HFS. We talk about how the whole value proposition for India started as cost arbitrage. I think where we are today is more of a skills arbitrage, where you’re finding the skills, and I think what your wish is, is to get to innovation arbitrage — which is fantastic. So thanks a lot. I really enjoyed it, and I’m pretty sure our listeners would enjoy it as well.
Swaroopa Rani Akula — Head, Hyderabad Operations Center, Eastman Chemicals[19:22]
Thank you so much, Saurabh. Thanks to HFS for the opportunity as well.
