Index Insider: AI Talent Drives Global Capability Center Service Expansion? | ISG

Hello. This is Michael Dornan with what’s important in the IT and business services industry this week.

If someone forwarded you this briefing, consider subscribing here.

Global Capability Talent Needs Are Changing

Last year, we discussed here how global capability centers (GCCs) have been evolving as sources of value as well as talent. In today’s Insider, we’ll identify how talent needs at GCCs are changing, based on our most recent ISG Market Lens study.

Data Watch

Background

Skills requirements in GCCs are evolving. According to our research, 50% of enterprises will expand the services portfolio in their GCCs over the next two years. To manage this expansion, centers say they will invest an average of $1,400 per employee toward generative AI initiatives in 2025. These investments are primarily for operational cost reduction and productivity improvements, both within the GCC and in the wider business. As a result, there is a need to ramp up recruitment of AI and machine learning skills as part of those initiatives and supplement with data science, analytics and other technical skillsets.

The Details

• Access to talent was cited as one of the top three challenges by 25% of companies we talked to, particularly for GCCs seeking productivity improvements.
• 50% of GCCs expect to achieve staff productivity outcomes from generative AI initiatives by the end of 2025 and are accelerating their hiring to deliver on these initiatives.
• Nearly half expect productivity in their centers in terms of total work throughput to increase by 10% or more over the same time frame, while operational budgets remain flat on average.

What’s Next

Evolving the skills mix and expanding service portfolios in GCCs will require significant investment, and, in most cases, outside support from managed services providers.

In our study, almost all GCCs report having external outsourcing partnerships, and just over half use these relationships for talent acquisition and HR services. Furthermore, more than 60% expect to increase outsourcing spending. And, given the rapid shift of talent requirements to more technical and hard-to-source AI roles over the next two years, talent services will be a core component of this investment.

This kind of talent-related service is one of the many types of services managed services providers are quickly developing to capitalize on the current GCC trend. We’ll be covering this topic in more detail on the 1Q25 ISG Index Call, so be sure to reserve your spot for the call here.