Part I: Establishing a Global Capability Center (GCC) in India

India has seen a remarkable evolution as a destination for outsourcing in the past three decades. From back-office operations in BPOs in the 1990s to knowledge and process outsourcing in KPOs in the 2000s to its current avatar of leading research and development activities, the latest technology solutions and IP creation, India has become the optimal location for a Global Capability Center (GCC) with scale, skills and cost benefits.

Here are some recent, mind-boggling statistics from the Economist, NASSCOM, Wizmatic and others :

• Number of GCCs jumped from 700 in 2010 to 1580 in 2023
• A new GCC opens in India every week, 40% in and around Bengaluru
• GCCs employ over 3.2 million knowledge workers
• Current revenue contribution estimates range from $46B to $120B (as multinational companies do not publish GCC contributions)
• GCCs in India include semiconductors (Intel, Invidia and others), technology giants (Alphabet, Microsoft, Amazon), retail (Walmart), banking (Wells Fargo), automotive (Mercedes Benz), pharmaceutical among others
• GCCs lead in innovation and IP creation which have resulted in several patents
• The GCC option has become very tenable for smaller organizations due to absence of language barrier, availability of high-speed communication and flexible models

The factors behind the juggernaut growth are well documented: constant supply of skilled technical and managerial workforce, continued cost efficiencies, technology maturity in areas such as AI, ML, robotics, blockchain and others, and stable political climate.

Yet so many organizations struggle to realize the fullest value from their GCCs. In our experience, most problems arise from an inability to scale effectively, cultural imbalances between the parent company and GCC, ineffective tools and processes, and lack of local expertise in taxation, law and governance.

Our approach, honed from over 100 man-years of experience in establishing and managing GCCs in India, Europe and Middle East, helps organizations bridge these gaps. We start with a well-articulated strategy which clearly spells out the endgame, execute multi-disciplinary operations with facilities, people and processes, and partner with hands-on management and services.

So, how do we make this happen?

Our next post on scale considerations, operating models and cultural synchronization for GCCs in India.

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