GCCs cut IT service providers

AI, analytics, and product development move in-house

- PADMINI DHRUVARAJ

IT FIRMS STAND to lose a significant chunk of their revenue stream as global capability centres (GCCs) increasingly reduce their reliance on IT service providers by strengthening in-house capabilities in key technology areas such as advanced analytics, artificial intelligence (AI), and product development. Analysts say that it's time for IT firms to move up the value chain and increase their focus on high-margin offerings such as cloud services, high-value consulting, AI/ML, and cybersecurity.

"While the impact has been limited so far, as we scale our GCC, we will continue to evaluate skills that we must bring in-house versus those where we leverage ecosystem partners. Specifically, in the areas of advanced analytics, AI, and product development/engineering, we are building deeper capabilities in-house," said Manish Goyal, managing director and GCC Lead at Alvarez & Marsal.

Critical IT roles such as AI and cybersecurity are increasingly moving in-house as companies seek greater control over these vital functions. GCCs are reallocating IT budgets to focus on in-sourcing, aiming to improve efficiency, ensure strategic alignment, and drive long-term business value.