1.6Mpeople
compound annual growth rate
5Mpeople
compound annual growth rate
According to ISG Research and the data from NASSCOM, over the past 8 years, the GCC has experienced an 11% compound annual growth rate (CAGR) in India alone, 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.
The recent ISG Market Lens™ Global Capability Center study reveals that those GCCs that are expanding are doing so primarily for cost optimization reasons, with growing emphasis on staffing, automation, productivity and talent access. However, there are many GCCs which are struggling with employee attrition, operating costs, talent shortages, and cultural and time zone differences.
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.
However, the rising challenges of war for talent, the emergence of remote work as the new norm, and the rising expense of popular GCC locations present a complex set of dynamics for companies seeking to establish a GCC. For established centers striving for enhanced outcomes, the rapidly evolving landscape of advanced digital technologies, including AI and intelligent automation, has created an urgent need to reimagine GCC operating models, dimensions and even the entire sourcing strategy.
Modern GCCs must consider:
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 model. This work includes location analysis and selection, operating and delivery model design, and functional and 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. |
Find out more from the ISG Market Lens™ study on global capability centers by clicking below.
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