2025 has seen a notable push by companies to establish dedicated capability centers—or global capability centers (GCCs)—in countries with lower-cost resources and access to a strong talent pool. According to S&S Insider, the global GCC market was estimated at about $128.5 billion in 2023 and is expected to increase to more than $300 billion by 2032, growing at a rate of 13.51% CAGR. NASSCOM reports that India leads the GCC market, currently hosting over 1,700 GCCs, employing more than 1.9 million people, and having an 11% CAGR.
Why Are GCCs so Popular?
The key business drivers fueling the rising popularity of GCCs include the following:
- Enhanced business control and oversight over work being driven to and handled by the GCC (“an extension” of the existing workforce)
- Ability to better align offshore workforces with company culture and strategic objectives
- Access to broader talent pools to expedite innovation and R&D initiatives
To highlight the first driver, Hutech Solutions notes that the GCC is intended to integrate the offshore workforce with the company’s other business teams and facilitate better collaboration with internal company departments.
What Are the Different Types of GCC Build Models?
There are a number of different models that are emerging for establishing GCCs. For a detailed summary of the different models, see our past blog post Rise of the BOTs: Exploring Build-Operate-Transfer Models for IT and Business Process Services.
Challenges of Transitioning to a GCC
As with any strategy, there are benefits and challenges. According to a recent ISG Insider Index, the top five challenges when transitioning to a GCC are:
- Integration with the business
- Transition management
- Operational management
- Employee attrition
- Finding talent
Other challenges include establishing a new entity (if applicable), identifying the best site location and infrastructure setup, and accounting for various regulatory, tax, and data protection considerations. GCCs require a commitment to the overall investment and long-term planning.
Our Morgan Lewis Tech & Sourcing lawyers can help you navigate the complex and evolving process of building and integrating a GCC. To learn more about GCCs and the convergence of digital solutions and BPO, register for our upcoming webinar on April 30, 2025 at 12:00 pm ET.