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As companies’ globalization journeys have evolved, so have these Captive Centers, which have transformed into Global In-house Centers (GICs) or Global Capability Centers (GCCs). More often than not, these GCCs build and scale a specific capability or a set of capabilities, hence the name. Over the last couple of decades, GCCs have become a critical part of how companies access global talent, drive innovation, de-risk business, and ensure business continuity.
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.
By following tried and tested approaches that ensure a seamless setup and operationalization. In today’s hyperconnected and competitive business landscape, setting up a Captive Center has become a strategic imperative for global organizations.
These GCCs are increasingly driving organization-wide superior customer experience and providing customer insights that enable downstream data-driven decision-making.
To set up a successful Captive Center or Global Capability Center, careful planning and execution are critical. Here are the key steps on how to set up a Captive Center:
1. Define the Strategic Objectives
Before diving into the details of setting up a Captive Center or Global Capability Center (GCC), it is crucial for the company to define their organization’s strategic objectives. Consider the following questions:
2. Conduct a Feasibility Study
Once the company has outlined its strategic objectives, next comes a feasibility study. This study should assess the viability and potential risks associated with setting up a GCC. Key aspects to consider include:
3. Select the Right Location
Choosing the right location for setting up the GCC is critical. This choice will impact talent acquisition, operational efficiency, and overall success. India, Poland, Mexico, The Philippines, and Brazil are some of the top talent hotspots where companies can house full, scalable engineering teams.
A vast, digitally-skilled talent pool; higher ecosystem maturity with a dynamic technology start-up ecosystem, a vibrant Service Provider community, and academia; ease of doing business; and affordable costs are just some of the X factors that propel India to the top of the globalization list.
When selecting a location, companies need to consider the following factors:
4. Build a Robust Business Case
Based on the results of the feasibility study and location analysis, the company needs to create a compelling business case for establishing a GCC. This case should outline the expected benefits, potential risks, costs, and potential return on investment. A well-structured business case will help secure executive buy-in and funding for the GCC initiative.
5. Develop a Detailed Roadmap
With the business case approved, it is time to create a detailed roadmap for setting up the Captive Center. The roadmap should include the following key milestones:
6. Choose the Right Offshoring Model
Any company looking to set up a Captive Center needs to choose the right offshoring model.
The following table illustrates the salient aspects of each of these models.
7. Define the Organizational Framework
Define reporting relationships, span of control, roles, and responsibilities for the newly set up Captive Center. Balance local leadership for agility with integration with global teams. Plan team structures keeping end-state scale in mind. The following will be key considerations when designing the GCC organizational structure:
8. Focus on Talent Development
One of the primary advantages of setting up a GCC is access to a diverse and skilled talent pool. To maximize this advantage, the company must invest in talent development and retention strategies. Consider:
9. Implement Effective Governance and Communication
Effective governance and communication are crucial for the success of the GCC. Establish clear reporting structures, decision-making processes, and communication channels between the Captive Center and the parent company. Regularly engage with stakeholders to ensure alignment with strategic objectives.
10. Continuously Optimize Operations
Setting up a Global Capability Center is not a one-time effort but an ongoing process. The company must continuously assess the performance of the GCC against KPIs and identify areas for improvement. Consider automation, process optimization, and technology upgrades to enhance efficiency and cost-effectiveness. Define maturity roadmap. Set targets for center leadership, talent development, and portfolio expansion. Track progress periodically. Maintain active collaboration between global and GCC leaders to enable growth.
11. Ensure Data Security and Compliance
Data security and compliance are paramount in today’s dynamic business environment. Implement robust data protection measures, adhere to local and international regulations, and conduct regular audits to ensure compliance.
12. Manage Organizational Change
Proactively manage the cultural integration between global and GCC teams by –
13. Foster Collaboration and Integration
To fully leverage the capabilities of the GCC, the company must promote collaboration and integration with the parent organization. Periodic knowledge-sharing sessions, cross-functional collaboration, and alignment with corporate culture and values play a critical role in ensuring faster integration.
14. Govern Continuous Improvement
Define frameworks to track the Global Capability Center maturity across dimensions like leadership, talent, and technology. Conduct periodic assessments to monitor progress. Share best practices across centers. Stay aligned to the long-term strategic roadmap through active partnerships between global and local leadership.
A well-designed GCC can give any company access to new talent pools and innovative thinking. With careful planning and investment in people, companies can build global Captive Centers that create immense strategic value over time. But setting up a Captive Center can be challenging, due to the fact that there are multiple moving parts to manage. From location analysis to infrastructure, IT, talent acquisition and management, and other operational challenges, the journey to set up a GCC can be time-consuming. Without the necessary experience, companies that try to set up a Captive Center in talent hotspots such as Bangalore, Mexico City, or Warsaw, will run into operational challenges and frustrations that can potentially make an already-difficult process more challenging, expensive, and inefficient. These will take up a lot of executive bandwidth, while also potentially increasing the risk of failure. Hence, strategic intent, a robust approach, careful planning, effective execution, and a commitment to continuous improvement are key to successfully setting up a Captive Center.
Global Capability Centers (GCCs), also known as Captive Centers/Global-In-House centers are offshore /nearshore units, wholly owned and operated by the parent company to centralize functions such as Information technology, Finance, Human Resources etc.
The primary purpose of establishing a Captive Center or Global Capability Center (GCC) is to leverage offshore talent and resources to enhance operational efficiency, innovation, and cost savings. Captive centers enable organizations to have direct control over processes, intellectual property, and talent development while benefiting from a globally distributed workforce, as highlighted in Zinnov’s insights on setting up such centers.
A Captive Center differs from outsourcing or offshoring to third-party service providers because it is an in-house subsidiary of the parent organization, providing more control and alignment with the parent company’s objectives. This differentiation is highlighted in Zinnov’s resources on global business operational models.
Typical functions or services that can be centralized in a Captive Center or Global Capability Center (GCC) include IT and software development, research and development, customer support, finance and accounting, human resources, and data analytics. Zinnov’s insights on GCC setup emphasize these core functions as areas where organizations can achieve maximum operational efficiency and value.
Captive centers offer reduced costs, improved operational efficiency, greater control over quality and consistency, increased agility, accelerated innovation, and access to new markets and talent pools. Captive centers can also support digital transformation, improve customer-centricity, accelerate globalization, drive innovation, and mitigate risk.
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 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, GCCs, employing more than 1.9 million professionals.
By 2030, India is expected to be home to 2,100-2,200 GCCs, employing around 2.5-2.8 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 880 GCCs in India, accounting for almost 29% of the total GCCs in the country.
Along with Bengaluru, Hyderabad is gaining momentum as a GCC hub due to its world-class infrastructure for office spaces, strong digital connectivity, SEZs, and business-friendly policies. Hyderabad is home to over 355 GCCs, accounting for almost 21% of the total GCCs in India. Emerging Tier I GCC cities include Chennai, Mumbai, and NCR, collectively contributing close to 92% of total GCCs in India.
With 23+ years of expertise in setting and transforming 190+ 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.