The rapid expansion of Global Capability Centers (GCCs) has reshaped the global technology landscape. Initially established for cost savings, GCCs have transformed into innovation hubs, driving high-value functions like product engineering, AI, data analytics, and R&D for their parent companies
India’s GCC Growth: A Transformative Shift
India’s GCC sector has seen remarkable growth, with over 1,700 GCCs operating nearly 3,000 centers in FY24. These centers contribute $64.6 billion in revenue and employ over 1.9 million professionals. As their capabilities expand, GCCs increasingly overlap with IT and managed services providers, leading to new dynamics in the industry
GCCs vs. IT Service Providers: A Competitive Yet Complementary Relationship
With GCCs insourcing more functions, IT service providers face competition for both projects and high-end talent. Reports suggest GCCs offer salaries 12-20% higher than IT service firms for similar roles. However, the two sectors remain interdependent. While IT firms handle automation, global business services, and legacy systems, GCCs focus on innovation-driven functions like AI, cloud computing, and digital transformation
Emerging Models: BOT, BOTT, and GCC-as-a-Service
Many companies establish GCCs using the Build-Operate-Transfer (BOT) or Build-Operate-Transform-Transfer (BOTT) models, where IT service providers initially manage operations before transitioning them to the parent firm. A recent example is Infosys setting up a GCC in India for Lufthansa under a $300 million contract.
A new approach, GCC-as-a-Service, is gaining traction. This model blends managed services with flexible, cost-efficient operations, eliminating the rigid transition timelines of traditional BOT setups
A new approach, GCC-as-a-Service, is gaining traction. This model blends managed services with flexible, cost-efficient operations, eliminating the rigid transition timelines of traditional BOT setups
Tech Service Providers Strengthening GCC Support
Recognizing the growth of GCCs, third-party IT service providers are increasing investments in India. Companies like GlobalLogic, Kyndryl, and Lingaro are expanding their services to cater to GCC clients. From product engineering and hybrid cloud solutions to AI and data analytics, these firms play a crucial role in enhancing GCC operations
The Future: A Hybrid Model for Success
Industry experts predict a hybrid model, combining in-house GCC capabilities with third-party services, as the future of enterprise operations. This approach enables flexibility, scalability, and broader access to expertise, ensuring sustained innovation and efficiency
Conclusion
As GCCs continue to evolve, the lines between in-house innovation centers and IT service providers are blurring. Rather than direct competitors, the two sectors are becoming strategic partners in a rapidly transforming digital landscape. With new operational models emerging, the future of GCCs looks more dynamic than ever
