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In an era of rapid digital transformation and global competition, organizations are continuously seeking innovative strategies to enhance their operational efficiency, drive innovation, and maintain a competitive edge. One such strategy that has gained significant traction is the establishment of Global Capability Centers (GCCs). These centers have become instrumental in reshaping how multinational corporations manage their global operations, particularly in emerging markets like India. This comprehensive guide explores the world of GCCs, their impact across industries, and their crucial role in modern business strategy.
GCCs play a strategic role in enterprise transformation by driving innovation, building specialized capabilities, and serving as hubs of global talent. GCCs play a pivotal role in driving innovation, enhancing cost-efficiency, and accessing diverse global talent pools (top-tier global talent along with the latest technology).
Below are the core functions of GCCs that enterprises commonly establish:
Managing enterprise IT systems, cloud infrastructure, cybersecurity operations, product engineering, and large-scale digital transformation programs.
Handling financial planning, budgeting, compliance, risk management, regulatory reporting, and global shared services for enterprise efficiency.
Delivering superior service through omnichannel support, service delivery management, and digital-first customer engagement platforms.
Enabling intelligent decision-making with big data platforms, advanced analytics, machine learning models, and AI-driven automation.
Overseeing global hiring, workforce planning, learning & development, leadership programs, and HR shared services to support global growth.
Driving innovation through product design, prototyping, IP development, testing, and market-specific innovation labs.
Managing vendor ecosystems, global procurement operations, logistics optimization, inventory planning, and sustainability initiatives.
Building global brand campaigns, content marketing, social media operations, creative design studios, and customer insights hubs.
Ensuring adherence to local and global regulations, intellectual property management, contract management, and enterprise-wide compliance frameworks.
Running enterprise-wide transformation programs, governance frameworks, and providing global strategy support through program management offices (PMOs).
Handling sustainability data, tracking environmental and social performance indicators, and supporting parent companies in meeting evolving regulatory requirements around carbon reduction and governance standards.
Managing organizational structure, coordinating processes, consolidating technologies, and planning smooth integration during mergers and acquisitions.
Unlike traditional outsourcing models, GCCs offer greater control over operations and closer alignment with corporate objectives. This model has gained particular prominence in regions like India, which has emerged as a preferred destination for GCCs across various sectors due to its combination of skilled talent, cost advantages, and robust infrastructure.
The concept of Global Capability Centers (GCCs) has undergone a significant evolution over the past few decades. What began primarily as a cost-saving initiative has transformed into a strategic imperative for many organizations. Let’s examine this evolution in detail:
1. Access to a Global Talent Pool
Global Capability Centers (GCCs) unlock access to a high-quality, scalable talent base. Whether it’s Digital Engineering, Cybersecurity, Data Science, or Product Design – companies can tap into specialized skillsets that may be scarce or expensive in-home markets.
2. Cost Efficiency Without Compromising Value
While cost savings continue to be a draw, the modern GCC delivers much more. From driving digital transformation to creating Intellectual Property (IP), these centers are becoming hubs of innovation and business impact.
3. Business Continuity and Organizational Resilience
GCCs add agility and geographic diversification to enterprise operations. In a volatile world, they provide built-in buffers: supporting operations, crisis management, and faster pivoting in uncertain conditions.
4. Control and Ownership of Core Capabilities
Unlike outsourcing, GCCs allow full control over IPs and core capabilities. This internal alignment results in better integration with global strategies and long-term value creation.
5. Deep Integration with HQ Culture and Strategy
With mature governance and leadership, GCCs can mirror the parent company’s ethos and decision-making DNA, making them true strategic extensions rather than isolated satellites.
Selecting the right legal structure, such as a wholly owned subsidiary, Limited Liability Partnership (LLP), branch office, or virtual captive, is critical for a successful GCC setup. Considerations include tax optimization, liability exposure, ownership laws, and long-term business goals in countries like India, Poland, and Mexico.
Global Capability Centers must comply with evolving data protection regulations like the EU’s GDPR, India’s DPDP Act, and Brazil’s LGPD. Contracts and IT frameworks should support secure data flow across borders while adhering to localization mandates where applicable.
A robust transfer pricing model is essential to prevent tax disputes. GCCs must ensure arm’s-length pricing for all intercompany transactions and maintain detailed documentation to meet the requirements of local tax authorities in regions like LATAM, Eastern Europe, and Southeast Asia.
Protecting Intellectual Property (IP) is a core legal consideration when establishing a GCC. Clearly define IP ownership in employment and vendor agreements, and include non-disclosure and invention assignment clauses to avoid IP leakage.
Labor laws vary widely across countries like India, Philippines, and Brazil. GCCs must structure compliant employment contracts, respect mandatory benefits, and handle terminations in line with local labor codes and statutory protections.
To maintain ethical operations, GCCs must comply with anti-corruption laws such as the FCPA, UK Bribery Act, and relevant local statutes. Implement training programs, reporting systems, and due diligence procedures to mitigate risk.
Whether leasing a facility or opting for licensed workspace within a tech park, the structure of real estate agreements impacts business continuity, insurance, and legal obligations. India, Costa Rica, and Poland offer varied leasing frameworks that require careful evaluation.
When engaging facilitators for a build-operate-transfer (BOT) or virtual captive model, common in India and Southeast Asia, contracts must include terms for service levels, exit rights, IP handover, and governance to ensure long-term control and flexibility.
GCCs operating in regulated industries, such as BFSI, Healthcare, or Telecom, must meet sector-specific requirements. For example, financial GCCs in India must comply with RBI guidelines, while those handling Healthcare data must adhere to HIPAA or GDPR.
Exit planning is vital for long-term business continuity. Legal agreements should include clear provisions for staff transition, asset handover, IP continuity, and vendor disengagement, particularly when changing facilitators or insourcing the GCC
As the GCC model continues to evolve, a new concept has emerged: GCC-as-a-Service. This innovative approach allows companies to leverage third-party platforms and expertise to establish their offshore or nearshore centers rapidly and efficiently. The benefits of this model include:
When considering offshore operations, organizations often face the decision between establishing a captive center and outsourcing. Let’s analyze the key differences:
Captive Centers:
Outsourcing:
While both models have their merits, the trend is increasingly shifting towards captive centers, especially for companies looking to drive innovation and maintain control over critical functions.
GCCs are gaining traction because they offer what modern enterprises want: control, integration, and innovation. While cost arbitrage remains a benefit, it’s no longer the sole driver. While cost has moved down the priority ladder, it still matters. GCCs unlock access to world-class talent at 30–50% lower costs than home markets – an unbeatable combination in today’s climate.
The country’s unique combination of a vast global talent pool, cost advantages, and supportive government policies has made it an attractive destination for multinational corporations across various sectors.
Bengaluru and Hyderabad continue to lead as India’s top GCC hubs, driven by their advanced infrastructure, deep talent ecosystems, and strong innovation networks.
Chennai, Mumbai, Pune and National Capital Region (NCR) are also emerging as key destinations, offering robust infrastructure and access to skilled professionals.
Meanwhile, Tier 2 cities like Ahmedabad, Coimbatore and Thiruvananthapuram are gaining traction due to lower operational costs, improving infrastructure, and a growing pool of diverse talent, making them attractive alternatives for GCC setup & expansion.
“India’s GCC sector has become the nerve centres of global enterprises, helping them develop, test, and scale next-gen products and platforms”
Karthik Padmanabhan, Managing Partner, Zinnov, on YourStory.
The healthcare sector provides an excellent example of how GCCs in India are driving global innovation. Healthcare GCCs in India are involved in:
These centers have become crucial in helping global healthcare companies maintain competitiveness and compliance while driving innovation in patient care.
To fully understand the GCC landscape, it’s essential to be familiar with several key concepts:
A capability center is a specialized division within an organization that focuses on building specific skills or competencies. In the context of GCCs, these centers often concentrate on areas like technology, business processes, or product development.
While similar in nomenclature, these two concepts serve different strategic purposes:
Shift from Cost Centers to Innovation Hubs
AI, Automation & GenAI Integration
Multi-Function & Cross-Sector Expansion
Talent & Leadership Evolution
Global-Local Ecosystem Integration
As we look towards the future, several trends are likely to shape the evolution of GCCs:
Global Capability Centers have evolved from mere cost-saving measures to strategic assets that drive innovation, efficiency, and global competitiveness. As businesses continue to navigate an increasingly complex and digital-first world, the role of GCCs will only grow in strategic importance.
As we move forward, GCCs will continue to be at the forefront of driving global business transformation, making them an indispensable component of any forward-thinking organization’s strategy.
Here is your ideal way to setup your GCC–
A Global Capability Center (GCC) is a strategic, fully owned offshore or nearshore unit set up by multinational corporations to centralize and manage key business operations such as IT, finance, and customer service. These centers tap into global talent ecosystems to deliver cost efficiency, foster innovation, and improve agility. Over time, GCCs have advanced from conventional back-office support functions to becoming strategic hubs of excellence, leading sophisticated initiatives in areas like data analytics, artificial intelligence, and digital transformation — thereby strengthening an organization’s competitive advantage.
A COE is an enabling group that works across various Business Units (BU) or product lines within a BU of a Multinational Corporation (MNC). It has leading-edge knowledge and competency in a specific area of interest/technology. A COE is usually composed of subject matter experts and professionals with a comprehensive understanding of the domain.
Global Business Services is a unique construct in which multiple Shared Services functions are co-located in the same entity with the aim of delivering high value outcomes for the parent organizations. GBS extensively leverages data, automation, and technology as key enablers to deliver high value for their global counterparts.
An ER&D GCC refers to a Global Capability Center focused on Engineering, Research & Development. It includes activities that cover development, augmentation or optimization of products/services of an organization. This encompasses support activities related to manufacturing, engineering, project engineering, MRO, regulatory services, Software Product Development, Embedded Services, and Mechanical Engineering Services
Global Roles within GCCs entail responsibilities that span multiple regions or countries, rather than being confined to a specific geography. These positions require individuals to take ownership of the design, strategy, and outcomes for teams and stakeholders across various geographies. In addition to overseeing global charters and teams, global leaders often also have P&L (Profit and Loss) responsibilities. These roles can be focused on R&D, engineering, or other functional areas.
Shared Services are the consolidation of business operations that are used by multiple parts of the same organization. It is cost-efficient as back-office operations, used by multiple divisions of the same company, are centralized, eliminating redundancy. This approach is designed to be cost-efficient and provide high-quality, standardized services across the organization.
Service Providers are companies or individuals that offer specialized services to businesses or consumers. These services can include IT support, telecommunications, consulting, financial services, or cloud computing. They provide expertise and resources that organizations may not have in-house or choose not to maintain internally
Offshoring refers to the practice of relocating business processes or services to a different country, typically to take advantage of lower costs, access to skilled labor, or other strategic benefits
An ODC (Offshore Development Center) is typically a dedicated team or facility set up by a service provider for a specific client, often focusing on software development or IT services. A GCC, on the other hand, is a strategic unit of the parent company itself, handling a wide range of functions beyond just development, including business processes, research, and innovation
Offshoring involves moving business processes or services to a distant country, often with significant time zone differences and cultural variations. Nearshoring, in contrast, involves relocating these functions to a nearby country, typically sharing a border or in close geographical proximity. Nearshoring aims to reduce some of the challenges associated with offshoring, such as time zone differences and cultural gaps, while still potentially offering cost benefits.
Business Process Management (BPM) is a discipline that uses various methods to discover, model, analyze, measure, improve, and optimize business processes. A business process coordinates the behavior of people, systems, information, and things to produce business outcomes in support of a business strategy.
Digital Technology in GCCs includes AI/ML, Big Data Analytics, IOT, Cloud Computing, Web & Mobile Development, Cybersecurity, IA/RPA, Blockchain, AR/VR, 3D Printing, and other emerging technologies.
Yes, mid-market companies are increasingly adopting the GCC model as they seek to scale efficiently, drive innovation, and tap into global talent. While GCCs were historically the domain of large enterprises, falling entry barriers, modular operating models, and India’s mature GCC ecosystem have made it feasible for mid-sized firms to establish their own capability centers.
Mid-market GCCs are often leaner, more focused, and more digitally native compared to their enterprise counterparts, making them well-positioned to experiment, pivot, and scale quickly.
By 2030, this segment is expected to contribute significantly to the next wave of GCC growth in India, especially in emerging tech hubs and Tier II cities.
India is home to over 1,760 GCCs, bringing the total to more than 2,975 operational units globally. In FY 2024, these GCCs generated USD 64.6 billion in revenue. By 2030, India is projected to host approximately 2,100 to 2,200 GCCs, with a combined workforce of 2.5 to 2.8 million, driving revenues in the range of USD 99 to 108 billion.
India is recognized as the GCC capital of the world due to its large global talent pool, robust infrastructure, cost-effectiveness, government policies, and culture of innovation. Currently, India hosts over 1,760 GCCs, employing more than 1.9 million professionals.
Bengaluru is the GCC capital of India, also known as the ‘Silicon Valley of India,’ due to its thriving ecosystem, robust infrastructure, access to a deep talent pool, and an environment that fosters mobility and innovation. It hosts more than 875 GCCs in India, accounting for almost 29% of the total GCCs in the country.
With 23+ years of expertise in setting and transforming 200+ GCCs, Zinnov’s approach to a frictionless GCC setup has helped customers reduce time to set up and time to value by 50%. The proven 3-phase model—Design, Implementation, and Governance—ensures hassle-free setup and operations.
Global Capability Centers (GCCs) are established to help organizations boost operational efficiency, foster innovation, and expand their capabilities by tapping into global talent and cost-efficient locations. These centers serve as strategic hubs for specialized functions, enabling companies to concentrate on core priorities and long-term initiatives while delegating routine operations and making the most of shared resources.
When deciding where to establish a Global Capability Center (GCC), organizations should prioritize regions with a deep, affordable talent pool, reliable technology infrastructure, and easy access to major business hubs. It’s equally important to factor in the area’s overall stability, government incentives for global firms, business-friendly policies, and the ability to scale operations over time. These elements collectively help ensure the center runs smoothly, remains agile, and supports sustainable growth.
Top companies such as JP Morgan Chase, HSBC, Bosch, UnitedHealth Group, Oracle, American Express, Qualcomm, Ericson, Standard Charter Bank, Shell Technology Center, Intel and Walmart have setup GCCs in India.
Global Capability Centers (GCCs) are also known as Center of Excellence (CoE), Global In-house Centers (GICs), Captive Centers, Global Competency Centers and Shared Services Centers (SSCs).
Here is the step-by-step guide to setting up a Global Capability Center (GCC)–
1. Define the Strategic Objectives
2. Conduct a Feasibility Study
3. Select the Right Location for your GCC
4. Build a Robust Business Case
5. Develop a Detailed Roadmap
6. Choose the Right Offshoring Model
7. Define the Organizational Framework
8. Focus on Talent Development
9. Implement Effective Governance and Communication
10. Continuously Optimize Operations
11. Ensure Data Security and Compliance
12. Manage Organizational Change
13. Foster Collaboration and Integration
14. Govern Continuous Improvement
With 23+ years of experience and having set up and transformed 200+ GCCs, Zinnov goes beyond execution to become a true strategy partner for CXOs and boards. Zinnov, the top GCC Enabler recognized by AIM (Analytics India Magazine), doesn’t just help build centers — it shapes the ‘why and how’ of GCCs, driving business cases, benchmarking, digital transformation, AI adoption, and talent strategies that transform GCCs into strategic powerhouses delivering long-term enterprise value.
A Global Capability Center (GCC) is a wholly owned subsidiary of a multinational company, typically set up in talent-rich countries like India. It focuses on innovation, R&D, analytics, and digital transformation, acting as a strategic extension of the parent company to build future capabilities and drive competitive advantage. On the other hand, Global Business Services (GBS) is an organizational model that centralizes multiple support functions (like IT, HR, finance, procurement, etc.) under one umbrella, sometimes combining in-house teams and outsourcing partners. Its primary aim is efficiency, cost optimization, and standardized service delivery across the enterprise.
Global Capability Centers (GCCs) are strategic hubs that consolidate talent, technology, and infrastructure to drive innovation, efficiency, and scalability across enterprises. Increasingly, organizations establish specialized Centers of Excellence (CoEs) within their GCCs to build deep domain expertise, standardize best practices, and deliver long-term, sustainable business value.
Global Capability Centers (GCCs) give organizations scalable access to digitally native global talent and act as innovation engines powered by technology-driven talent strategies. These centers support everything from IT and finance to customer service and R&D by leveraging top tech and global expertise. Today’s GCCs go far beyond cost efficiency or back-office support—they accelerate digital transformation, unlock enterprise-wide value, and fuel growth. By uniting skilled global professionals with technologies like AI, machine learning, and analytics, GCCs improve process efficiency, elevate decision-making quality, and spark innovation. GCCs play a significant role in digital transformation.
Global Capability Centers are wholly owned and operated by their parent company, allowing complete control over intellectual property, corporate culture, and strategic alignment—unlike traditional outsourcing, where third-party vendors manage tasks with limited integration and oversight.
GCCs are evolving from cost-saving hubs into innovation powerhouses—working on advanced initiatives like AI, R&D, digital engineering, and integrated process improvement. They’re being transformed into functional extensions of global headquarters.
The first GCC was launched by Texas Instruments in Bengaluru in 1985 as an offshore R&D hub. Its success proved that India could deliver not just cost efficiency but high-value innovation and engineering. This breakthrough triggered a wave of multinational companies setting up GCCs, turning India into the world’s leading hub for capability centers.
In 2025, several multinational companies are expanding their presence in India through new Global Capability Centers (GCCs). Costco, the U.S. retail giant, is setting up its first GCC in Hyderabad, which will focus on technology and research operations and is expected to initially employ around 1,000 people, with plans for further growth in the future. Similarly, Dai-ichi Life Group, a leading Japanese insurer, is establishing its first GCC outside Japan, also in Hyderabad, in collaboration with Capgemini. The center has begun operations with about 50–60 technology professionals and is projected to scale up significantly, employing 500–600 staff within the next two to three years. These new GCCs highlight Hyderabad’s growing role as a preferred hub for global firms seeking both talent and innovation capacity.
Artificial Intelligence, Machine Learning & Analytics – Driving innovation through AI-first capabilities, data science, and automation.
Semiconductors & Internet of Things (IoT) – Powering digital engineering, connected devices, and product development.
Mid- Market Segment- GCCs are booming in the mid-market because mid-sized companies are seeking cost-efficient access to global talent and the ability to scale digital and AI capabilities quickly. Unlike large enterprises, mid-market firms use GCCs to gain a competitive edge through agility, innovation, and faster transformation.
Energy & Utilities – Building digital platforms for sustainability, smart grids, and operational efficiency.
Pharmaceuticals & Healthcare – Accelerating drug discovery, R&D, and digital health solutions.
Manufacturing & Automotive – Enabling design, engineering, and smart factory transformation.
Retail, Consumer Goods & E-commerce – Enhancing customer experience, personalization, and supply chain intelligence.
Banking, Financial Services & Insurance (BFSI) – Strengthening fintech, cybersecurity, analytics, and regulatory compliance.
Engineering & Technology – Advancing product design, IT services, and next-gen digital transformation
The next wave of GCCs will not just use AI as a tool, but embed it as the foundation of their operating model. Artificial intelligence will drive decision-making, process optimization, customer experience, and even product development. This evolution will position GCCs as AI-first innovation hubs, applying automation, machine learning, and generative AI across every function.
An AI-CoE will act as the central hub for building AI expertise and scaling its adoption across the enterprise. It will develop reusable frameworks, standardize best practices, ensure responsible AI usage, and foster continuous innovation. By doing so, GCCs will move beyond efficiency to co-owning AI-led transformation, driving enterprise-wide value creation.
GCCs are playing a pivotal role in shaping the AI strategies of global enterprises by taking on specialized, AI-focused functions. They are driving AI research and development to build enterprise-ready models, while also managing data engineering and governance to ensure high-quality, AI-ready datasets. Many GCCs are embedding intelligence into digital platforms through AI product engineering, and handling AI operations (MLOps) to deploy, monitor, and scale solutions across business units. At the same time, they are establishing robust frameworks for AI governance, ethics, and compliance, ensuring responsible and secure adoption. Beyond technology, GCCs are also enabling AI-led business transformation by reimagining workflows, automating decision-making, and unlocking new revenue streams. With dedicated hubs for AI and data science talent, GCCs are evolving into AI-first transformation engines that co-own innovation and long-term value creation for global enterprises.
Modern GCCs are no longer just cost-saving back offices; they have evolved into AI-first, innovation-driven hubs. They now focus on digital engineering, advanced analytics, automation, and building specialized talent pools, enabling enterprises to drive transformation, resilience, and long-term growth.
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