Indian GCCs: The Transition from Business Support to Business Enablement

Anand Ramakrishnan, Managing Director, EQ India

Indian Global Capability Centres (GCCs) are transforming from cost-saving back-office operations to strategic innovation hubs. This evolution has been shaped by three distinct phases, each marking a significant shift in the value proposition of these centres.

The Three-Phase Evolution of GCCs

The first wave of GCC development was characterized by cost and operational efficiency. Multinationals set up offshore centres in India to leverage wage differentials for routine back-office functions. These early GCCs concentrated on transaction processing, basic IT support, and other non-core activities that could be easily relocated. This phase had its value. It laid the groundwork for future growth by establishing a reliable operational base.

As GCCs matured, they transitioned from cost savings into the second phase that focused on process excellence – a shift from doing things well to doing things better. It meant standardizing and optimizing operational workflows across multiple geographies and the implementation of quality methodologies like Six Sigma and Lean. There was significant investment in talent development and underlying technology infrastructure to ensure the success of this transition. Parent companies began to entrust the centres with more complex responsibilities, such as financial reporting, compliance, and IT service management; and this led to the establishment of functional Centres of Excellence (CoEs) within GCCs, serving as organization-wide improvement and shared services hubs for these functions.

Thus far, even as their activities became more multi-dimensional, GCCs still played only a support role to the main business. Today, as we leave behind an era of