The Evolution of GCCs: From IT Back Offices to Global Innovation Powerhouses

Introduction

Global Capability Centers (GCCs) have significantly matured over the years. Originally conceived as offshore support units focused on cost savings, they now serve as strategic outposts for innovation, digital transformation, and product ownership. In this blog, we explore this shift and why it’s pivotal for companies setting up GCCs in India.

Why the Evolution of GCCs is a Game Changer

Strategic Shift: The move from transactional operations to strategic innovation has reshaped the global enterprise ecosystem. GCCs are now deeply involved in core business functions, product development, and high-end engineering.

Economic Footprint: India’s GCC landscape includes over 1,800 centers employing close to 2 million people. The sector contributes more than $76 billion in output and is projected to reach $105 billion by 2030.

GCCs in the Early Days

Initial Focus: GCCs started as extensions of corporate IT departments, handling functions like tech support, finance processing, and HR operations.

Drivers of Growth: Factors such as affordable talent, English proficiency, and government incentives spurred early adoption. Locations like Bengaluru, Pune, and Hyderabad quickly became GCC hotspots.

Modern-Day GCCs: More Than Just Support

Innovation Hubs: Today’s GCCs run AI centers, data analytics labs, and cybersecurity operations. They are launching new products, creating IP, and taking full ownership of global portfolios.

Talent Strategy: Companies invest in upskilling local talent in areas such as machine learning, blockchain, and product engineering, making India a center for technological leadership.

Why India Remains the GCC Capital

Robust Ecosystem: India offers a rich blend of tech infrastructure, educational institutions, and a vibrant startup culture.

Scalability: Businesses leverage tier-II cities like Indore and Coimbatore to diversify and scale operations beyond metro hubs.

Policy Support: State-led GCC policies and infrastructure incentives are making expansion even more attractive.

Emerging Trends in GCCs

• Product Ownership: GCCs are increasingly responsible for end-to-end product lifecycle.
• Patent Creation: A rise in patents and IP filings showcases innovation maturity.
• Hybrid Working Models: GCCs now offer global delivery from distributed teams across India.

Insights for Businesses Establishing GCCs in India

1. Define Objectives Clearly: Decide if the Centers will support operations or drive innovation.
2. Choose Location Strategically: Evaluate cities based on talent availability, cost, and infrastructure.
3. Build Leadership Locally: Empower Indian teams with decision-making authority.
4. Focus on Long-Term Value: Move beyond cost to innovation, speed, and IP creation.

Conclusion

The transformation of GCCs from support centers to innovation leaders is not just a trend it’s the new normal. India’s evolving talent landscape and supportive ecosystem make it an ideal location for forward-thinking companies.

Looking to build a high-impact GCC in India? Partner with Sansovi to design, launch, and scale your capability Centers with innovation at its core. Let’s get started.