GCCs 2.0 - Intelligence and Innovation at the Core

Overview

Global Capability Centers (GCCs) are undergoing remarkable transformative shift - from transactional delivery engines to AI-powered hubs of innovation and strategic value. This article explores how GCCs are enabling enterprises to scale digital capabilities, drive customer-centricity, co-create business impact across functions, and their future trajectory. With India at the epicenter of this evolution, the next generation of GCCs is poised to lead in areas like AI, ESG, operational intelligence, and risk governance. The article highlights key benefits, challenges, emerging models, and success factors shaping GCCs 2.0, along with key actionable insights for enterprises to unlock their full potential.

India’s GCC Evolution - Powering Innovation and Strategic Value Beyond Cost

GCCs have come a long way - from operational cost centers to strategic innovation hubs. Initially focused on transactional services and cost arbitrage, modern GCCs are rapidly evolving into global centers of excellence, innovation, and AI-driven transformation. Their expanded purpose includes accessing specialized talent, scaling digital capabilities, improving governance, and co-creating value across emerging markets such as India.

India’s GCC ecosystem is uniquely equipped for this shift, boasting a deep STEM talent pool and an abstraction ready environment for product engineering, analytics, and AI innovation. Enterprises are increasingly leveraging Indian GCCs not just for delivery, but also to own global AI platforms, build proprietary models, and lead digital programs.

The benefits of GCCs in India today extend far beyond cost savings. They enable:

• Operational efficiency and process standardization through hyperautomation.
• Round the clock capabilities, due to time zone arbitrage.
• Stronger IP and process governance.
• Innovation velocity, powered by GenAI labs, agile teams, and AI CoEs.
• Robust business continuity and scaling flexibility.
• Access to global leadership pipelines, with executives and innovation roles originating from GCC locations.

However, several challenges remain. Talent attrition, reskilling teams, swift ramp-up and ramp-down, intensified competition for niche AI skills, perceptions of monotonous execution work, rising compensation pressures, lack of autonomy, and limited innovation culture can inhibit GCC potential. GCCs risk stagnation without a proper vision, structured career paths, true decision‑making authority, and a learning-first environment.

GCCs Growing Impact in India

• India, home to over 1800 GCCs as of FY2025, projected to exceed 2400 by 2030, making it the world’s leading destination for high-value global services. 200+ GCCs have expanded into Tier-2 cities, fostering regional development and unlocking lower-cost, high-quality talent pools.
• GCCs in India generated $241 billion in total economic output and $182 billion in Gross Value Added (GVA) in FY2025, with projections reaching $271 billion GVA by 2030 - reinforcing their role as strategic growth engines contributing 2% to India’s GDP.
• GCCs supported 10.4 million jobs in FY2025, including 2.1 million direct, 1.8 million indirect, and 6.5 million induced jobs.
• Per capita GVA in GCCs is $32,500 - over 11 times India’s national average and comparable to Japan and South Korea.
• GCCs contributed $62 billion in net exports in FY2025, equivalent to 9% of India’s forex reserves, with projections of $116 billion by 2030.
• GCCs have shifted from transactional work to strategic roles like AI/ML, cybersecurity, analytics, and global product ownership. India’s GCCs are driving innovation with real-world outcomes, including patented solutions, clinical trial execution, and digital product development.
• GCCs are reshaping India’s tech landscape by driving demand for advanced skills and offering innovation partnership opportunities to IT firms. However, they also intensify talent competition and may reduce outsourcing demand, impacting deal sizes and profit margins. While this poses challenges, it also pushes Indian IT companies to move up the value chain and focus on co-innovation, AI-first delivery, and strategic collaboration with GCCs.

Key Considerations for GCC Location Strategy in India

Choosing the right location is critical to a GCC’s long-term success - balancing access to skilled talent, cost efficiency, infrastructure readiness, and ecosystem maturity to align with the center’s strategic objectives.

• Assess availability of talent depth and specialization across Tier-1 and Tier-2 cities.
• Evaluate cost efficiency, including real estate, salaries, and overall operational expenses.
• Ensure strong digital infrastructure, IT parks, and proximity to innovation and R&D ecosystems.
• Analyze attrition trends and talent retention potential in chosen locations.
• Check accessibility, including airport proximity and inter-city connectivity.
• Leverage state-level incentives, policy support, and ease of doing business.
• Prioritize scalability and future-readiness for headcount and skill diversity.
• Align with ESG goals through sustainable infrastructure and local community development.

GCCs Enabling Customer-Centricity

GCCs are playing a transformative role in enabling organizations to become more customer-centric. Customer-centricity and Experience-led growth is not a one-time initiative but a continuous process of listening, improving, and adapting. This strategy strengthens competitive advantage by turning every customer interaction into an opportunity to create lasting value. The successful GCCs play as innovation hubs that actively pilot cutting-edge, industry-specific solutions cementing their role as strategic enablers of superior customer engagement and loyalty. Here are some of the ways how GCCs are enabling customer centricity:

• GCCs are enabling organizations to become more customer-centric by embedding intelligence, innovation, and agility at scale.
• They ensure consistent and high-quality customer experiences across geographies by standardizing global processes and unified approach while adapting to local nuances.
• GCCs can significantly enhance the overall customer journey and experience by streamlining processes, standardizing operations, and enabling real-time integrations.
• They can build holistic data platforms and embed AI-driven insights at every touchpoint to deliver proactive support, personalization, and responsiveness.
• GCCs can align cross-functional teams around customer-centric goals, improving consistency across digital and physical channels.
• They can foster deeper customer understanding through personalized interactions, predictive support, and sentiment analysis.
• Leading GCCs function as innovation hubs that pilot industry-specific customer engagement solutions.
• There is a greater focus on enhancing responsiveness and free up human agents to focus on complex issues through the deployment of AI-powered self-service platforms.
• Leading GCCs are embedding customer-centric KPIs such as NPS and CSAT into real-time dashboards, driving continuous improvement and proactive service delivery.

GCCs are redefining customer-centricity by embedding intelligence, agility, and innovation into every customer touchpoint. As strategic hubs, they enhance experiences, personalize engagement, and drive continuous value through data-led insights and proactive service delivery.

What Makes GCCs Truly Successful?

• Strategic Integration and Culture - A successful center isn’t an island of excellence - it must be fully integrated into the global organization, with shared purpose and visibility. GCC talent needs to feel like global contributors, not back-office staff. Organizations that rotate talent to HQ and vice versa build deeper alignment and foster ownership.
• Innovation Experimentation - Top GCCs begin small - with innovation pods that test ideas, experiment with cross-functional teams, and rapidly scale successful PoCs. The blend of generational diversity and proximity of digital, business, and technical expertise creates powerful innovation dynamics.
• Leadership and Structure - GCC success rests on committed leadership that provides a long-term strategic vision, resources, and global alignment. Effective governance helps anticipate risks, plan resources, and maintain cross-functional coordination. Clear career mapping and change management keep the talent motivated and anchored to business value.
• Operational Intelligence at Scale - Modern GCCs leverage AI + Process Intelligence to drive end-to-end optimization, proactive risk detection, and hyperautomation. Tools like AI augmented process mining enable GCCs to identify opportunities across finance, supply chain, and customer workflows and scale innovations efficiently.
• Partner Ecosystems to Enhance Innovation - GCCs build resilience by focusing on deep domain experts and AI-aware professionals especially those blending business understanding with technical fluency. GCCs can multiply their innovation impact by building layered partner ecosystems - collaborating with startups, academic institutions, hyperscalers, and consulting firms to access emergent technologies, talent pools, and industry expertise. These partnerships foster co innovation pods, external accelerators, and shared labs that bring fresh perspectives and faster experimentation cycles. By integrating ecosystem input with in-house AI/GenAI capabilities, GCCs can unlock new commercial models, accelerated solution development, and broader strategic value.
• AI-Driven Co-Creation, Responsible AI & Commercial Innovation - AI and analytics capabilities are built into the very fabric of the GCC. These centers are using predictive modelling to drive strategic decisions. Consistent use of insight-driven decision-making fosters a culture where curiosity and data fluency flourish over time. Leading GCCs are embedding AI governance frameworks to ensure ethical, compliant, and transparent use of AI. They also evolve commercial models - billing based on efficiency, outcomes, or AI-driven arbitrage rather than traditional T&M. Many have started building internal Agent Foundries to manage AI agents, embed feedback loops, and maintain model evolution over time.

Truly successful GCCs operate as integrated, innovation-driven extensions of the enterprise - anchored in strategy, empowered talent, and ecosystem collaboration. By embedding AI, scaling experimentation, and fostering a culture of co-creation, they become engines of transformation and sustained value.

Why Some GCCs Struggle to Deliver Value?

Some GCCs fail to deliver value due to lack of strategic alignment, limited autonomy, weak leadership, and an overemphasis on cost savings over innovation and talent development. Without clear purpose and empowered execution, they risk becoming stagnant support centers rather than strategic growth engines.

• Lack of strategic vision, weak alignment with enterprise goals, and limited decision-making autonomy.
• Absence of strong executive sponsorship and poor governance during setup or BOT (build-operate-transfer) phases.
• Overemphasis on cost savings over innovation, value creation, and business outcomes.
• Rigid structures, legacy thinking, and failure to transition beyond transactional roles.
• Skill gaps in AI, digital, and data capabilities, with insufficient investment in talent development and infrastructure.
• Weak employer branding, slow hiring, and high attrition due to limited career paths and low engagement.
• Poor collaboration between onshore and offshore teams and fragmented ownership of processes.
• Disconnected multi-location models and hybrid work challenges impacting cohesion and productivity.
• Lack of localized strategies to align with India’s talent dynamics, culture, and operating environment.

When GCCs attempt to take over large-scale operational tasks by phasing out IT partners, they risk shifting focus back to a shared services mindset - undermining their evolution into innovation hubs. This move can dilute strategic priorities, overburden internal teams, and create talent fatigue, especially in high-skill areas like AI and product engineering. Sustainable success lies in balancing core innovation with strategic external partnerships to stay agile, scalable, and value-focused.

GCCs struggle when they lack strategic clarity, autonomy, and investment in innovation and talent. To avoid stagnation, they must focus on value creation, empowered leadership, and balanced partnerships - not slip back into legacy shared services models.

Navigating the Complexities of Location-Spread GCCs

Having GCCs spread across multiple locations and operating without co-located teams can create both opportunities and risks, depending on how well they are governed. On the one hand, distributed GCCs allow organizations to tap into a broader and more diverse talent pool, especially across Tier-2 and Tier-3 cities where niche skills, lower attrition, and cost efficiencies are increasingly accessible. This geographic diversification also improves business continuity, de-risks operations from location-specific disruptions, and supports follow-the-sun delivery models. With robust digital infrastructure, collaboration tools, and agile work practices, many GCCs have shown they can maintain productivity and engagement even in a hybrid or virtual setup.

However, the absence of co-location can pose serious challenges if not carefully managed. Innovation often thrives on informal collaboration, rapid iterations, and spontaneous problem-solving - dynamics that are harder to replicate in fragmented setups. Distributed teams may struggle with alignment, slower decision-making, and a lack of shared cultural identity, which can erode the sense of ownership and purpose. Leadership stretch, uneven career experiences, and communication lags can also affect cohesion and engagement.

The successful GCCs invest in a strong operating model, unified governance, intentional culture-building, and leadership presence across locations to ensure distributed doesn’t become disconnected.

Unlocking Shared Value through Collaborative Innovation

Modern GCCs are moving beyond organizational silos to create collective impact through strategic collaboration. By joining forces across industry forums, academia, and ecosystem partners, they are unlocking shared value, accelerating innovation, and shaping responsible, future-ready capabilities.

• GCCs are increasingly collaborating through industry forums to co-develop best practices and share innovation use cases.
• Joint talent development initiatives with academia and industry bodies are helping build future-ready digital and AI skills.
• GCCs are aligning on shared AI/GenAI playbooks and responsible AI frameworks to accelerate adoption and reduce redundancy.
• Collaboration in cybersecurity forums helps GCCs benchmark governance, share threat intelligence, and enhance compliance.
• ESG-focused alliances among GCCs are driving joint efforts in sustainability, green tech, and climate responsibility.

Modern GCCs are embracing collaborative innovation to drive collective progress, going beyond enterprise boundaries to co-create value with industry peers. By uniting on AI, talent, cybersecurity, and sustainability, they are shaping a smarter, more responsible global innovation ecosystem.

ESG & Sustainability

As strategic hubs of global enterprises, GCCs are increasingly playing a pivotal role in advancing ESG and sustainability goals. From driving green IT initiatives and optimizing energy usage to supporting climate data analytics and ESG reporting, GCCs are enabling responsible business practices at scale. Many are embedding sustainability KPIs into operations, fostering inclusive talent ecosystems, and piloting ethical AI use.

By aligning innovation with purpose, GCCs are not only creating environmental and social impact but also strengthening their role as future-ready, values-driven growth engines.

Risk & Compliance

As GCCs evolve from support units to strategic business enablers, their role in risk management and compliance has become increasingly critical. GCCs today are entrusted with managing enterprise-wide functions such as finance, legal, audit, cybersecurity, data privacy, and regulatory compliance. Their centralized model enables consistent implementation of global risk frameworks while adapting to regional regulatory nuances. This helps multinational organizations maintain compliance across jurisdictions and proactively manage operational, financial, cyber, and reputational risks.

Moreover, GCCs are leveraging advanced analytics, AI, and automation to build intelligent risk monitoring systems that provide real-time visibility into potential threats and non-compliance issues.

They play a vital role in orchestrating enterprise risk governance, performing internal controls testing, and conducting third-party risk assessments. With growing regulatory scrutiny in areas like data protection and ESG disclosures, GCCs are uniquely positioned to act as control towers that standardize risk protocols, drive continuous compliance, and ensure audit readiness - ultimately helping global enterprises stay resilient, agile, and secure.

This positions GCCs as guardians of enterprise trust, resilience, and compliance.

Global Tariffs

Despite global tariff tensions, India’s GCC growth remains strong - and may even accelerate. Since GCCs focus on digital services, AI, and innovation rather than goods exports, they are largely immune to tariff impacts. In fact, U.S. protectionist policies and hiring restrictions are prompting global firms to double down on India-based captives to access top talent and ensure delivery continuity. Supported by favorable Indian government policies and local incentives, GCCs are emerging as strategic hedges against geopolitical and trade uncertainties. On the contrary, rising tariffs and the GCC shift may pose challenges for Indian IT firms, but they also unlock new opportunities for strategic partnerships focused on co-innovation, AI-led delivery, and managed services. The industry is undergoing a significant shift, and we are witnessing a pivotal moment in its evolution.

As tariffs rise and global dynamics shift, India’s GCCs are emerging as resilient innovation hubs - offering both a hedge against uncertainty and a springboard for co-innovation with IT partners.

How to build High-Impact GCCs?

The journey begins with building high-performing, techno-functional teams with agility, a product mindset, and a strong desire to understand the business. These teams form the backbone of a strategic innovation hub, driving AI, automation, and process transformation, and developing high-impact solutions. True success comes from embedding technology, talent, and a culture of continuous innovation to deliver measurable business impact with agility and rapid throughput.

In Closing: From Delivery to Cognitive Reinvention

GCCs are no longer just delivery engines; they are strategic reinvention hubs - infused with AI, anchored in purpose, and poised to shape the enterprise of tomorrow.

A modern GCC is a cognitive powerhouse and a value creation engine tightly aligned to the enterprise's strategic goals. GCCs are now poised to become the strategic brain of global enterprises - fueled by AI, governed by innovation, and driven by empowered talent. The next wave of global business reinvention will be imagined, built, and scaled within these centers.

What sets successful GCCs apart is their clear strategic alignment, recognition and development of long-term talent, and a culture rooted in innovation, agility, and ownership. These centers embed AI, analytics, and operational intelligence into their core, supported by strong governance frameworks and secure, scalable infrastructure. By actively fostering ecosystem partnerships and championing responsible AI, GCCs transcend their traditional roles and evolve into transformation hubs - shaping strategy, accelerating innovation, and delivering sustainable business impact.

Organizations that elevate their GCCs as platforms for innovation and AI-first transformation will not just reduce costs - they will redefine competitive advantage on a global scale.

Co-Authored with Himakshi Jammar

Sources Consulted: D&B Economic Impact Report, EY GCC Insights, IBEF, McKinsey, Fractal AI, and other publicly available sources.

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