Twenty years ago, I embarked on my professional journey in the world of “Centers” within multinational corporations. Back then, they were known as Offshore Development Centers (ODCs). Witnessing their evolution over the years, from ODCs to Shared Service Centers (SSCs), Global Inhouse Centers (GICs), and finally, the current iteration of Global Capability Centers (GCCs), has been a truly captivating experience.
These centers started by providing IT, engineering, and associated services, leveraging India’s vast pool of talented professionals. Today, over 1500 such centers operate in India, employing millions and generating billions of dollars in revenue. This number is expected to rise significantly by 2026.
But what fueled this remarkable transformation? While the core mission of delivering value to the global corporation remains constant, the initial focus solely on cost optimization soon proved inadequate. Businesses realized the immense value proposition of their talented workforce. These individuals craved opportunities to learn, grow, and contribute strategically. Organizations, in turn, needed to foster a two-way perspective, investing in building both technical and behavioral competencies while empowering their teams.
This shift in focus led to the current state of GCCs, where they not only provide cost-effective services but also play a crucial role in driving high-value initiatives like R&D, digital transformation, and cutting-edge services like AI, ML, and data science.
Shaping the future of GCCs: A three-pronged approach for sustainable growth
The question now is: how can we shape the future of these centers for sustainable growth? My experience suggests a three-pronged approach:
- Optimize core operations (Run – 70-80%): Ensure core operations run smoothly and efficiently. Partnering with managed service providers can handle routine tasks, freeing up the workforce to focus on higher-value activities.
- Foster continuous improvement (Change – 15-20%): Encourage continuous improvement through process standardization and collaboration within co-located teams. This fosters a strong social connection and builds a positive company culture.
- Embrace transformation (Transform – 5-10%): Embrace the digital transformation era by investing in new technologies and skills like AI, ML, and data science. This is the key differentiator that unlocks future growth potential.
Country Director / India Leader
AGCO Corporation
The ideal balance between these factors will vary for each GCC, depending on their unique challenges and context. However, all centers should strive to tilt their composition towards “Transform” activities, where significant differentiation opportunities lie.
By collaborating with universities, vibrant startup ecosystems, and a robust vendor partner network, GCCs can create unique value propositions and secure their place in the ever-evolving global landscape. As I look ahead, I’m excited to see how these centers continue to evolve and contribute to the global economy, drawing upon the collective strengths of talent, innovation, and strategic partnerships.
