How are Global Capability Centers (GCCs) transforming the business world with innovation and technology?Publish Date: July 6, 2023
The importance of technological skills and innovation cannot be overstated in today’s fast-paced business world. As businesses expand and become more globalized, enterprises are no longer limited to resources based at specific locations. This has resulted in the growth of Global Capability Centers (GCCs), now vital players in the global business ecosystem. Initially, GCCs were offshore centers for large corporations but have evolved to become strategic partners in driving business transformation and innovation. These centers provide a wide range of support services, including IT, finance, HR, and R&D, enabling organizations to tap into the expertise and talent of professionals worldwide.
A report by Gartner shows that GCCs have witnessed significant growth in recent years, with over 1,000 new centers getting established worldwide in the last five years alone. This growth is expected to continue at a rate of 5-10% annually, highlighting the importance of GCCs in today’s business landscape. This blog post will delve into the key factors driving the growth of GCCs and explore their impact on the global business landscape.
GCC landscape in India- Home to more than 1,200 GCCs
India is home to more than 1,200 GCCs, that employ over 1.3 million professionals. They have become profit centers and have started delivering organizational KPIs locally. The “India GCC Trends Quarterly Analysis Q2CY2022” report by NASSCOM highlights the continued growth and resilience of Global Capability Centers (GCCs) in India. According to the report, GCCs in India have seen a 5% increase in headcount growth in Q2CY2022 compared to the same period in the previous year. The report also notes that GCCs in India increasingly focus on developing innovative solutions and products, with a growing emphasis on digital transformation and emerging technologies such as artificial intelligence, machine learning, and automation. The report further reveals that GCCs in India are expanding their talent pool by tapping into the country’s vast pool of engineering and IT graduates, with an estimated 7.8 million students graduating from higher education institutions in 2021.
Powering Global Growth: The Factors Driving the Rise of Global Capability Centers (GCCs)
In recent years, Global Capability Centers (GCCs) have emerged as a preferred model for organizations looking to leverage the benefits of outsourcing. Here are some of the driving factors responsible for the growth of Global Capability Centers (GCCs) in the last couple of years:
- Cost-effectiveness: Cost savings is another driving factor for the growth of GCCs. Many organizations outsource their non-core functions to GCCs, which are often located in countries with a lower cost of living and lower wages. This allows companies to access highly skilled talent at lower costs than that in their home country.
- Innovation: GCCs are increasingly considered strategic partners in driving innovation and digital transformation. Many GCCs have highly skilled professionals and advanced technology infrastructure, allowing companies to leverage their data analytics, artificial intelligence, and machine learning expertise.
- Geographical proximity: GCCs in regions close to an organization’s home country can provide several advantages. They can facilitate better communication and collaboration between teams, reduce cultural and language barriers, and provide better access to the local market.
- Government support: Many countries actively promote the establishment of GCCs by providing various incentives, such as tax benefits and infrastructure support. These incentives can significantly reduce the cost of setting up and operating GCCs.
- Business continuity: The COVID-19 pandemic has accelerated the adoption of remote work and outsourcing, increasing demand for GCCs. GCCs can provide business continuity by ensuring the uninterrupted delivery of critical business functions, even during a crisis.
GCCs Innovating with Next-Gen Tech
GCCs are constantly exploring new technologies and applying them innovatively to help their global parent stay ahead of the competition and provide value to their customers. They are at the forefront of technological innovation, constantly pushing the boundaries of what is possible.
Here are some innovative and cutting-edge technology trends of GCCs:
- Artificial Intelligence (AI) and Machine Learning (ML): GCCs are at the forefront of helping their global parent increasingly leverage AI and ML to automate processes and make data-driven decisions. From chatbots for customer service to predictive maintenance for manufacturing, AI and ML are transforming the way GCCs are helping their parent organization operate.
- Internet of Things (IoT): With the increasing prevalence of connected devices, GCCs are using IoT to collect and analyze vast amounts of data in real-time for their parent. This enables them to improve operational efficiency, reduce costs, and enhance the customer experience within the enterprise.
- Cloud Computing: GCCs are helping their global parent organization move away from traditional IT infrastructure and adopting cloud computing to scale their operations and reduce costs. Cloud computing enables them to access cutting-edge technologies like AI, ML, and IoT.
- Blockchain: GCCs are exploring the potential of blockchain technology to improve data security and transparency. From supply chain management to financial transactions, blockchain can streamline processes and reduce the risk of fraud.
- Virtual and Augmented Reality: GCCs use virtual and augmented reality to enhance the customer experience and improve employee training. Virtual and augmented reality can create immersive customer environments and simulate real-world scenarios for global employees.
Global Capability Centers (GCCs) are poised to remain a critical driver of global growth, providing essential support services to organizations across various industries. As businesses expand their global footprint, GCCs will play an increasingly pivotal role in tapping into the expertise and talent of professionals worldwide, driving competitiveness and innovation. R&D centers in GCCs (Global Capability Centers) are becoming increasingly important in driving innovation and new product development. According to a report by Deloitte, GCCs are driving manufacturing innovations at scale, with organizations using data transparency and analytics to enhance efficiency and profitability 
The future outlook for GCCs is bright, with these centers set to play a crucial role in driving innovation and growth across industries worldwide. Organizations that invest in GCCs will be better equipped to navigate the complex and dynamic global business environment, capitalize on emerging opportunities, and stay ahead of the competition.