How global corporations are establishing their own IT and ITES GCCs in India

In recent years, Global Capability Centres (GCCs) in India have emerged as a transformative force. What initially began as mere back-office support operations for global companies have now evolved into a nervous system for driving innovations and excellence.

India's emergence as a global innovation hub is not a tale of sudden disruption, but of methodical evolution, one that challenges our conventional understanding of offshore operations. 

The evolution of GCCs: Beyond back-office operations

Far from their initial cost-effective origins, GCCs have transformed into strategic powerhouses. They now function as natural extensions of their parent organisations, executing broader corporate ambitions. The journey from making passive repositories of routine tasks to crafting technological advancement has been nothing short of remarkable.

Today, these centres are no longer just financial arbitrage mechanisms, but crucial enablers of digital transformation. Indian GCCs are also serving as research labs where innovation is not just encouraged but systematically cultivated. 

Why India continues to lead as a face of talent?

The country’s prominence in the GCCs sector stems from a multi-faceted ecosystem of excellence. Nation’s Centres of Excellence have fundamentally transformed the talent pool of skilled professionals, while a booming digital infrastructure creates an ideal environment for establishing and scaling global operations.

A recent industry report advisory firm Inductus GCC underscores this transformation, indicating that India has become a pivotal hub for GCCs globally, with more than 1,800 centres established across major industries effectively transforming the country into a nucleus for high-value corporate functions. 

While technical expertise remains crucial, it is no longer sufficient in this evolving landscape. GCCs now seek professionals who can drive high-value strategic initiatives, shape technological trajectories, and navigate complex global business environments. The emphasis has shifted towards holistic professional development. Implementing prosperous mentorship programmes and creating specialised leadership development opportunities, while ensuring equality at all levels, has become a crucial practice for technological leadership. 

The strategic importance of GCCs is particularly evident in cutting-edge technological domains. Arenas of AI, cloud computing, data analytics, and cybersecurity demand sophisticated skills central to global enterprises' strategic initiatives. These capabilities are more than theoretical—they are practically demonstrated.

In FY 23, GCCs employed over 1.66 million professionals, with 42% engaged in engineering, research, and development. This translates to a remarkable velocity arbitrage, allowing companies to execute innovation initiatives 2-3x faster than traditional R&D centres, particularly in AI and machine learning development. 

Strategic establishment of GCCs and Centre of Excellence

GCCs have mastered the art of maintaining close alignment with organisational goals. They ensure “glocal” aspects—a synergy between local operations and global objectives. This transformation is visibly manifested in geographical innovation.

An intriguing 22% of India's new GCC centres were set up in Tier II cities, accelerated by pandemic-induced reverse migration and the appeal of cost efficiencies. This strategic dispersal has created an unexpected competitive advantage, effectively establishing a second wave of innovation hubs while deepening trust in India's predominantly STEM talent pool. 

The talent ecosystem is the true differentiator in this narrative. India’s rich talent pool provides access to professionals with new-age skills and competencies across varied functions and technologies. This diversity is not just a numerical advantage, but a strategic capability. The talent base enables GCCs to drive two major functions across multiple domains: technology and innovation. 

Infrastructure and cost-effectiveness play equally critical roles in this ecosystem. Scalable infrastructure in critical regions, combined with competitive costs, provides significant operational efficiency benefits. Importantly, this cost-effectiveness is not a compromise, but a strategic enabler. It doesn't diminish quality but rather enables greater investment in innovation and development. The integrated nature of GCCs facilitates seamless collaboration across borders.  

Looking ahead: Future of GCCs in India

As we contemplate the future, Global Capability Centres represent far more than a corporate strategy—they embody a new paradigm of innovation. They illustrate how breakthrough moments in research and development are not linear progressions, but dynamic landscapes of peaks and valleys. The most sophisticated GCCs have recognised a fundamental truth—innovation is a continuous journey, not a destination. By granting employees end-to-end ownership of processes, these centres have transformed innovation from a static milestone into a living, breathing feature of their organizational DNA. 

Beyond individual corporate success, this represents a macroeconomic transformation. Contributing over 1% to India's GDP these Global Capability Centres have transcended their original mandate. They are no longer mere service providers or cost-optimization mechanisms, but talent multipliers that challenge traditional narratives of global business operations. 

(Shiney Prasad, Country Head, Guardian India)