Global Capability Centers (GCCs) are having their moment. McKinsey reports these centers are evolving from back-office operations into innovation powerhouses, fundamentally reshaping how global businesses operate.
The next wave is already taking shape. With 80% of new GCCs prioritizing AI and ML capabilities, they're positioning themselves at the forefront of digital transformation.
What's cool is how GCCs are breaking the mold. They're not just following orders from headquarters anymore – they're operating more like startups, bringing fresh ideas and pushing boundaries. We're talking about centers leading the charge in sustainability, digital innovation, and creating solutions that make a difference. The numbers tell an impressive story too.
The impact is clear: GCC leadership has expanded by 1,500 in just two years, reaching 6,500 global leaders. For organizations aiming to stay competitive, GCCs aren't just about efficiency anymore – they're about building future-ready operations that blend innovation with execution.
In India, GCCs have become a notable success story and a hub for future growth. The Indian market's proven track record and talent pool make it an attractive destination for setting up GCCs.
Historically, Bangalore was the preferred destination for GCCs, but now cities like Hyderabad, Pune, Indore, Jaipur, Mysore, Mangalore, and Hubli are emerging as new hubs.
These cities offer lower wages and attrition rates, government support, and quality educational institutions, making them attractive alternatives to the overheated Bangalore market.
GCCs are witnessing robust growth and adoption, propelled by several key factors:
The Karnataka government is actively promoting GCCs in Tier 2 cities to alleviate strain on Bangalore's infrastructure and promote regional development. Encouraging GCC establishment in smaller cities is a win-win scenario for all stakeholders, providing a steady stream of talent and lower operational costs. Additionally, real estate costs in Tier 2 cities in Karnataka are 40-60% lower than major metropolitan areas, further supporting their growth.
While India remains a cost advantage over the US and UK, it is becoming less competitive against Canada, New Zealand, and Eastern Europe. As a result, organizations are exploring other countries like Sri Lanka and Southeast Asia for setting up GCCs.
GCCs will lead distributed, digital-first global teams with standardized operating models and agile leadership. This will enhance the seamless functioning of globally distributed teams and deliver mission-critical programs.
By 2025, GCCs will see an increase in roles involving AI, ML, and data science. This will necessitate upskilling and reskilling the workforce and adopting gig models for hiring expertise. GCCs are evolving from cost centers to innovation hubs, driving value generation through emerging technologies like AI, ML, IoT, and cloud-native solutions. They will take ownership and leadership in developing tech products and innovations. These initiatives demonstrate how GCCs can significantly improve efficiency and business performance.
The decentralization of GCC operations to lower-tier cities will unlock untapped talent, infrastructure improvements, and cost advantages, boosting local economies and making operations scalable. GCCs are at the forefront of innovation and digital transformation, leveraging advanced technologies to drive business outcomes. GCCs are evolving beyond traditional cost centers to deliver strategic value through innovation, quality, and productivity improvements.
Enterprises are aligning their GCC technology portfolios with broader enterprise technology strategies to ensure GCCs are integral to overall tech leadership. The landlord model and skill development initiatives will foster innovation and collaboration within capability centers. As these hubs evolve into Global Value Centers (GVCs), they focus on revenue-driven projects, cross-functional collaboration, and product innovation. This shift positions GCCs as key players in the enterprise's competitive strategy and market growth.
Experts believe that GCCs will continue to grow and evolve, with several key themes emerging:
As Global Capability Centers (GCCs) evolve, sustainability is becoming crucial in their strategic direction, encompassing environmental, social, and economic dimensions. PWC’s Global Workforce ESG Preferences Study on Environmental, Social, and Governance, or ESG practices, is increasingly becoming a priority for companies in India, leading to a 10% increase in employee satisfaction and a 20% improvement in brand reputation.
As we approach 2025, GCCs must integrate sustainable practices into every aspect of their operations to positively impact the environment, society, and economy. AI will likely evolve into the central nervous system of software delivery, driving faster innovation cycles, smarter resource allocation, and more robust risk management.
GCCs are writing a new story for themselves that's less about saving money and more about driving innovation. The numbers tell the tale: India's GCC workforce alone is set to exceed 2.2 million by 2026, showing just how vital these centers have become.
What's interesting is where these centers are popping up. Cities like Ahmedabad, Mysuru, and Coimbatore are becoming the new GCC hotspots, with smaller cities now hosting 7% of all GCC units, up from 5% in 2019. This shift isn't just good business – it's unleashing talent in places we hadn't looked before.
The future of GCCs is about being talent magnets and innovation hubs that can shape what's next in global business.
“India is already the HQ of the world for GCCs, shifting from efficiency hubs to AI/ML thought leaders in the industry.” – Vineet Dwivedi, Global Head, Alcon Global Services (AGS) & Head AGS India
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