Vantage
India has a growing number of GCCs today, employing a large pool of professionals and generating significant revenue. This number is set to keep growing over the coming years. The GCC boom has also created a certain level of autonomy. The average captive center is transforming from a shared-service back office into a strategic value engine.
“The average captive center is transforming from a shared-service back office into a strategic value engine.”
The Current GCC Mandate
New GCCs have been opening in India at a steady pace in recent years. Hyderabad and Bengaluru have been critical hubs since the shared service model works well in locations churning out engineering graduates required to execute these roles.
The core drivers of the shared services model have been headcount optimization, cost drivers, and critical SLA compliance.
In many ways, the operating model for GCC 1.0 was transactional accounting. Volume-based hiring was the norm with control over ERP and cloud migrations while running and maintaining legacy support. This transactional back-office routine has been key to operations until the advent and core adoption of AI.
“The core drivers of the shared services model have been headcount optimization, cost drivers, and critical SLA compliance.”
Key Enablers for Transition
Widespread AI adoption, automation and disruption of the traditional outsourcing model has been critical to the shift in GCC models. The ‘two in a box’ leadership approach has also been an important driver in adoption of the GCC 2.0 model. The following are key enablers of the transition:
1. Automation and AI Adoption
This has been a post-digital transformation inflection point. Most GCCs have adopted AI for near-perfect execution (removing human-error) and close SLA compliance. AI transformations have been made possible by proximity to data lakes (ERP, CRMs, Supply chain logs etc.). Opening up this data to enterprises leaves GCCs vulnerable to cyber attacks and severe compliance risks.
2. Disruption in Traditional Outsourcing Models
Traditional ‘Time and Material’ models have been disrupted since outcomes have become more important than billable hours. The alignment for effort-based outcomes and adherence to SLAs have become important in delivery models as opposed to traditional hourly billing.
“Outcomes have become more important than billable hours.”
3. Borderless Engineering and ‘Two-in-a-box’ Models
Most organizations setting up GCCs have begun outsourcing leadership roles as well. Apart from site leaders like managing directors, global CIOs, CISOs and several C-level functions work directly with offshoring teams. This has shifted the power dynamic with C-level decision-makers operating out of these hubs and empowered to make autonomous decisions.
Core Pillars of GCC 2.0
GCC hubs today have moved away from the traditional shared services model to becoming a strategic partner to technology outcomes. The strategic value engine rests on four core pillars:
1. Product Life-cycle Ownership
The move from the traditional model to outcome-based projects has seen local hubs have end-to-end ownership of product lifecycle. The new model involves a base requirement shared followed by an entire scope (SOW) definition by GCC hub leaders. GCC 2.0, therefore, owns the whole product suite from ideation to production and implementation. From hiring vendors or monitoring leads, GCC 2.0 hubs look to hire enterprise architects, product managers, UI/UX designers and so forth to own product roadmaps.
2. Distributed Global Leadership
As mentioned before, there is a preference for hiring CXO-level technology leaders in GCC hubs directly. These leaders will be empowered to make decisions on roadmap and future mandates based on required business outcomes.
3. Innovation Sandbox
GCC hubs have become crucial staging grounds for testing technology and AI. More recently, centers of excellence have been set up to build AI agents and test OEMs such as ServiceNow, Salesforce and BMC Helix.
4. Strategic Excellence
Beyond Technology, GCC hubs have also been roped in for strategic discussions around infrastructure investment, capital advisory and ESG. Legal and Risk teams have also been consulted on several matters along with supply-chain and sourcing, predictive inventory logistics and global procurement.
“GCC hubs today have moved away from the traditional shared services model to becoming a strategic partner to technology outcomes.”
Possible GCC 3.0 Mandate
Short of business advisory, GCC hubs in India are likely to become a critical cog in the wheel for organizations looking to outsource backend functions in their entirety. Based on previous progressions, the key defining characteristics of GCC 3.0 can look something like this:
1. Larger Business-line Ownership
At the moment, GCCs have almost complete ownership of the technology roadmap. However, business lines such as finance, ESG, capital advisory, legal and risk will become core GCC functions. GCC site leaders will also have oversight on customer success and support functions.
2. AI-native Core
AI-native GCCs are already becoming increasingly adopted for autonomous operations and headcount decoupling. GCC 3.0 will most likely measure output per employee non-linearly and allow an AI or agentic AI layer to simply execute.
3. Cross-border Sovereign Governance
There are 2 aspects to this. The first is that the global C-level leadership such as CFO, CIO, and CISO may be hired by the Hub. This means that the succession plan will also be based on the Hub’s priorities. The second is that the hub may function as the enterprise's sovereign compliance shield.
In Conclusion
GCC 1.0 was about execution based on HQ’s strategy; GCC 2.0 is currently building out platforms to fit into the HQ’s strategic intent. GCC 3.0 could be a strategic layer on top of the two evolutions outlined with setting corporate strategy, capital allocation and investment decisions.
“GCC 1.0 was about execution based on HQ’s strategy; GCC 2.0 is currently building out platforms to fit into the HQ’s strategic intent. GCC 3.0 could be a strategic layer on top of the two evolutions outlined with setting corporate strategy, capital allocation and investment decisions.”
