Global Capability Centers (GCCs) have evolved from supporting standardization and efficient delivery of corporate operations to becoming centers of excellence that provide significantly enhanced value to enterprises. They provide access to top talent, build differentiating business capabilities, and drive transformation, innovation, scalability and business growth.
According to ISG Research, over the past 8 years, the GCC has experienced an 11% compound annual growth rate (CAGR), compared to the IT sector's 8% CAGR. The workforce in the IT sector totals 5 million people, while the GCC workforce has grown to 1.6 million.
However, the rising challenges of war for talent, the emergence of remote work as the new norm, and the evolving landscape of advanced digital technology including AI and Intelligent Automation present a unique set of obstacles for companies seeking to establish a GCC or for matured centers aiming to achieve greater outcomes and future-proofing. This demands a reimagining of a holistic view of GCC operating model and its dimensions.
ISG provides an end-to-end solution for establishing, modernizing and reinventing your Global Capability Centers for transformative business impact. Whether you need strategic advice and tailored research on the global GCC landscape, expertise to establish a GCC center from scratch, or strategies to optimize and scale up your existing GCCs for better results, we have the solutions you need, supported by our extensive experience and unmatchable data.
We carefully analyze your business landscape to forge a resilient operating scheme, including location selection, operating & delivery model design and functional & process design.
| Models | Description | Pros | Cons |
| Captive Centers | A facility that is fully owned and managed by the parent company. | Offers complete control over all processes, operations, and quality standards. Ensures strict alignment with the company's objectives and internal protocols. | High operational costs and significant investment required. Can lack flexibility and may take longer to adapt to market changes or scale quickly. |
| Hybrid | A blend of captive center operations with outsourcing to third-party vendors. | Combines flexibility with cost efficiency, allowing businesses to scale as needed. Provides external expertise while keeping key functions under the company's control. | Managing third-party vendors alongside in-house operations can lead to complexity. Possible issues with quality control and accountability. |
| Joint Ventures | A collaboration between the parent company and local entities or international partners. | Allows for shared investment and risk, while providing access to local expertise and market resources. Fosters innovation and growth through collective knowledge. | Potential for conflict or misalignment between partners. Divided control and profits. Slower decision-making processes due to the need for consensus. |
| Build-Operate-Transfer (BOT) | A third-party establishes and runs the operation, later transferring ownership to the parent firm. | Reduces initial investment and operational risk. Enables a smooth transition to full ownership. Speeds up operational setup while requiring a lower upfront financial commitment. | Transitioning ownership may result in integration challenges. Less control during the initial phase, and performance may depend on the third party's management. |
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