Global Capability Centers

Global Capability Centers, or GCCs, serve as integral hubs for enterprises seeking to centralize key functions such as IT services, research and development, and complex back-office operations.

Global Capability Centers (GCCs) play a crucial role in accelerating innovations. Major hubs in India, the Philippines, Poland, Mexico, and Brazil have grown significantly, driven by strong leadership and an entrepreneurial mindset. India, in particular, stands out with over 2 million professionals employed in GCCs, transforming them into strategic hubs that shape global business trends. These centers drive organizational initiatives, foster innovation, and build robust partnerships with tech innovators, startups, tech providers, academia, and government authorities.

1. Global Capability Centers (GCCs) have transformed significantly 

Initially, GCCs were primarily established to handle operational tasks cost-effectively. Since then, most GCC have become mature and transformed significantly as a result of operating in broader ecosystems and capitalizing on synergies between universities, tech firms and start-ups. 

Notable achievements are along five pivotal themes:

Source: Avasant Research.

2. Increasing share of GCC head-count (5.4%)

As a result of the increased maturity, the significance of GCCs in the strategy and operations is on the rise. This growing importance is reflected in the number of multi-function GCCs and the steadily increasing share of GCC headcount within the overall enterprise workforce, currently ranging between 2-14% and on average 5.4%.

Source: Avasant Research 

There is considerable variation in their size and scale of GCCs, with about 25% less than 50 FTE. Median headcount is approximately 400 FTE, indicating that many centers operate on a relatively smaller scale. Even among Fortune 500 companies, the median GCC headcount is around 1,550. 

3. Renewed emphasis on GCC 

Lately there is an increased emphasis on GCC and CoEs as global DNA of organizations, especially as the world has become more global. Some of the underlying drivers are:

  1. Thresholds have become lower to globalize certain business activities and or functions as people have become more comfortable in operating in a global and/or virtual setting. 
     
  2. Increased level of commonization; Processes are becoming more and more harmonized as result of SaaS and AI, for example when upgrading the ERP, Finance, HR / Customer support systems.
     
  3. Technology developments, incl global platforms, data and AI are increasing levels of automation 
    (= reducing workloads) and are shifting emphasis towards global support, knowledge and talent.

Areas well suited in general are: Sales/Marketing support, Customer Service, Finance, HR, Data/Analytics/AI, Innovation/Engineering, ERP (SAP), Application development.


4. Strategic GCC design considerations

Some of the main design and operating model considerations are centralized in one or multiple regions or distributed – with people in the countries of lines of business in combination with CoEs. 
Various combinations of near-shore and off-shore models are possible. Secondly, organize internally, as captive center, or externally, taking advantage of the capabilities, scale and maturity of service providers. 

On average about 12% of the GCC workload is sourced to service providers and there are various formats for working with service providers in a partnership setting.

Source: Whitebridge


How Whitebridge can help

  1. Improve or transform an existing GCC, e.g. as result of new ways of working or growth ambitions, 
    taking advantage of vendors or managed service providers as appropriate
     
  2. Establish a new GCC or expand with additional business functions or as CoE, 
    e.g. in combination with new ERP or other platforms, selectively partnering with vendors
     
  3. Insource third-party services into a GCC or Center of Excellence, especially as capabilities have become more strategic or in case of reduced workloads through increased levels of automation.

Whitebridge is partnering with Avasant on Global Capability Center Consulting

Avasant’s GCC Consulting services provide strategic guidance to help organizations establish, optimize, and scale their GCCs, transforming them into engines of growth and competitive advantage.

  1. Baseline and Benchmark existing processes/capabilities to determine feasibility, quantify potential benefits and/or support target state solutioning and sizing.
     
  2. Assess Process Portability for potential transfer to a GCC or to third party services.
     
  3. Business Case and Scenario Evaluation to support decision-making.
     
  4. Operating Model Design: Defining functional scope, technology, and organization/talent.
     
  5. Partner Selection: Assistance with partner selection to ensure successful implementation.
     
  6. Transition Planning & Execution: Planning and execution of transition strategies.
     
  7. Governance: Establishment of governance processes to ensure effective management.

In addition

  1. Regulatory and Compliance: Ensuring compliance with regulatory requirements.
     
  2. Intellectual Property: Protection of intellectual property during the transition.

Together we ensure that organizations maximize value from their GCC investments by providing hands-on implementation support, helping organizations operationalize their GCCs with best-in-class governance, process efficiencies, and automation.

 

About Avasant

Avasant is a leading management consulting firm that specializes in digital transformation, technology strategy, and business optimization. With a commitment to data-driven insights, Avasant Research empowers enterprises with actionable intelligence to drive operational excellence and innovation.
For more information, visit https://www.avasant.com.

Global Capability Centers