Cost savings and talent pool key drivers for enterprises to establish GCCs in India: Report

Significant cost savings, access to a deep talent pool, and IP protection remain key drivers for enterprises to set up their Global Capability Centres (GCCs) in India, revealed a new study. 

Global Capability Centers (GCCs) are specialised offices that large companies establish in other countries.

The survey titled "Back to the Future: What You Didn't Know About Setting Up a Successful GCC in India – Today" and commissioned by CaptiveAide in collaboration with research firm Feedback Insights, delved into the entry and partnership strategies adopted by organisations in setting up their GCCs in India. The study aimed to understand both challenges and opportunities GCCs face amid recent changes like the pandemic, evolving work environments, heightened security needs, and shifting employee expectations. 

The report, which surveyed 255 GCC leaders from companies based in the US and the UK, highlighted that India's appeal remained enduring, with key motivators being cost savings (cited by 57% of leaders) and the talent pool (52%).

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"The GCC landscape in India is evolving rapidly. While the opportunities are immense, organisations need to be aware of the complexities and proactively address them to ensure success. Our study provides valuable insights and recommendations to guide companies in making informed decisions and building sustainable GCC operations in India," said Chandramouli Srinivasan, Chief Executive Officer at Feedback Insights. 

Organisations must adapt to the new global business realities, as relying on past successes is no longer sufficient, the report said. 

GCCs, initially focused on cost-saving tasks like customer service and IT support, now handle complex projects like product development, research, and innovation. Despite the opportunities, new entrants face challenges such as cultural integration (84%) and regulatory compliance (55%). To address these, the study highlights the need for organisations to invest in cultural training programs, empowering local leadership, and robust compliance frameworks.

It identified four key focus areas for GCCs in India, which are operating model and governance, local leadership, culture and communication, and compliance. 

The report revealed diverse preferences in entry strategies: 46% of respondents favoured joint ventures while 34% relied on specialised firms with local expertise. Forming strategic partnerships with local entities is crucial for managing market entry, regulatory compliance, talent acquisition, and operational excellence.

"Building a successful GCC in India is not just about cost savings; it's about creating a strategic asset that drives innovation and growth for the entire organisation,” said Jawahar Bekay, Managing Partner at Captiveaide Advisory.