0%
of large enterprises with existing GCCs have expanded or expect to expand (ISG Market Lens, GCC Study).
Over the past 8 years, the GCC has experienced an 11% compound annual growth rate (CAGR) in India alone, compared to the IT sector's 8% CAGR (According to ISG Research and the data from NASSCOM)
Global capability centers (GCCs) have evolved from supporting standardization and efficient delivery of corporate operations to becoming centers of excellence that provide significantly enhanced value to enterprises. They provide access to top talent, build differentiating business capabilities, and drive transformation, innovation, scalability and business growth. Modern GCCs must consider:
By leveraging our extensive market data on IT and business services, along with our substantial experience in transformation, sourcing, and GCC establishment, ISG helps organizations improve service delivery strategies and reinvent their GCCs, regardless of maturity level.
| Models | Description | Pros | Cons |
|---|---|---|---|
| Captive Centers | A facility that is fully owned and managed by the parent company. | Offers complete control over all processes, operations, and quality standards. Ensures strict alignment with the company's objectives and internal protocols. | High operational costs and significant investment required. Can lack flexibility and may take longer to adapt to market changes or scale quickly. |
| Hybrid | A blend of captive center operations with outsourcing to third-party vendors. | Combines flexibility with cost efficiency, allowing businesses to scale as needed. Provides external expertise while keeping key functions under the company's control. | Managing third-party vendors alongside in-house operations can lead to complexity. Possible issues with quality control and accountability. |
| Joint Ventures | A collaboration between the parent company and local entities or international partners. | Allows for shared investment and risk, while providing access to local expertise and market resources. Fosters innovation and growth through collective knowledge. | Potential for conflict or misalignment between partners. Divided control and profits. Slower decision-making processes due to the need for consensus. |
| Build-Operate-Transfer (BOT) | A third-party establishes and runs the operation, later transferring ownership to the parent firm. | Reduces initial investment and operational risk. Enables a smooth transition to full ownership. Speeds up operational setup while requiring a lower upfront financial commitment. | Transitioning ownership may result in integration challenges. Less control during the initial phase, and performance may depend on the third party's management. |
Find out more from the ISG Market Lens™ study on global capability centers by clicking below.
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