When the internet shrunk the world and allowed people to conduct business from any part of the planet, Business Process Outsourcing (BPOs) took the world by storm. BPOs mushroomed in different parts of the world, with customer service being one of the first functions to be outsourced.
While twenty years ago the imperative was cost, fast forward ten years, and enterprises started focusing more on quality. Today, 174 of the Fortune 500 operate their very own Global Capability Centres (GCCs) out of India. This evolution from "cheaper" to "better" to "owned" reflects a fundamental truth: technology has changed the rules of the game. In an era where technology capabilities determine competitive advantage, companies that own their capabilities will outperform those that rent them. The question for executives isn't whether to embrace this shift, but when to do so.
Now, let’s take a look at how a traditional offshore centre differs from a GCC.
A GCC is owned by the parent enterprise, while a traditional offshore centre is owned by a vendor. GCCs are designed for strategic integration. Their operations, talent, and innovation endeavours are closely aligned with the parent organisation's culture and long-term goals. They are accountable for direct business outcomes. In contrast, traditional offshore centers focus on cost-driven service delivery. They are vendor-controlled and are obliged to function only as per pre-defined SLAs. This limits operational agility and ownership of business outcomes. It’s not surprising that global enterprises are more inclined to spend their energy on setting up GCCs. After all, agility and resilience are the cornerstones for growth in today’s rapidly changing business ecosystem. The mantra is greater control, deeper integration, and long-term capability building.
This is further validated by a recent IDC research that reveals that 67% of GCCs have adopted an innovation-first strategy. There has been a marked shift from "offshore" to a more balanced "rightshore" approach that optimises value beyond geography. GCCs function essentially as the digital twin of the headquarters, where integrated multi-functional multi-talented teams turbocharge innovation.
GCCs offer 4 strategic advantages to the parent company.
enhanced control and agility
Lack of control and visibility are often cited as the reasons behind the reluctance exhibited by some executives to sign off on traditional outsourcing. In contrast, GCCs offer enterprises direct oversight of talent, processes, and strategic priorities. Headquarters can have control over governance and operations. This control translates into faster time-to-market for digital initiatives and the ability to adapt in real time during market disruptions. For executives, GCCs allow them to evolve from defensive postures to a more offensive posture. They can now confront today’s fast-paced markets with agility and confidence.
innovation catalyst and IP Protection
As organisations shift their focus from cost arbitrage to fostering innovation, the traditional BPO model often falls short. IP in a vendor-managed model could become a point of contention. GCCs offer enterprises proprietary knowledge retention and collaborative innovation, fostering direct access to emerging technology talent without vendor markups. The result is accelerated R&D capabilities and enterprise-owned IP, contributing to product development cycles that are faster and more efficient. GCCs that are innovation-first shift from cost centers to profit generators with elan.
talent acquisition and retention excellence
In this era of skill shortage, GCCs present a strategic advantage. A recent research by Forrester indicates that GCC employees have a 40% higher retention rate as compared to vendor-outsourced teams. This is attributed to employer branding and career development opportunities. It could also be because of the customised learning frameworks and cultural integration GCCs allow. All of these contribute to higher employee engagement and loyalty.
operational excellence and risk mitigation
Compliance and risk mitigation are often blind spots in vendor-managed offshore operations. A completely controlled environment built on proactive frameworks to mitigate operational and cybersecurity risks is the need of the hour. With GCCs, enterprises have the freedom to harness AI and automation to mitigate risk while maintaining process efficiency and compliance standards.
There are challenges in setting up a GCC, but none that cannot be worked around. Sometimes the initial setup costs and time investments might be more than anticipated. One way to counter this is to start with non-critical functions to build capabilities and prove value before scaling operations. Cultural integration might also be a roadblock while harmonising work practices and communication styles. Invest in local leadership and cultural initiatives to foster better team cohesion and accountability. Navigating regulatory and legal complexities across jurisdictions is another uphill task that one will encounter while setting up a GCC. Establish clear governance frameworks to ensure jurisdictional compliance as well as adherence to parent company objectives.
GCCs are transitioning from operational service centers to strategic innovation hubs that deliver breakthrough solutions and drive business transformation. For enterprises, the strategic priority is developing sustainable competitive differentiation through proprietary capabilities rather than vendor dependencies. Leadership must conduct a comprehensive evaluation of organisational readiness and capacity to successfully implement and scale GCC operations as a core component of their global strategy.
how can Infosys BPM help?
Infosys BPM’s Global Capability Centre offerings empower enterprises seeking to design, build, and transform future-ready Global Capability Centers through proven end-to-end frameworks that cover assessment, setup, scaling, and transformation. Our AI-powered blueprints, agentic AI accelerators, and global talent network help create resilient GCCs that deliver measurable business value.
