More than ever before, efficiency and cost savings have emerged as the dominant concerns for businesses worldwide, regardless of their size. The GCC, or Global Capability Center, is one of the strategic initiatives undertaken by several firms to further their Global Business Centers' objectives. So, what is GCC exactly, and where does it sit in the ecosystem of the modern business world?
This lesson will provide everything there is to know about the Global Capability Center or GCC, from its advantages, disadvantages, status, and future opportunities to its history, service offerings, and best practices, including choosing a provider.
The Global Business Centers model is characterized by outsourcing certain functions to outside service providers. These service providers, termed GCC providers, complete the contracted work through a set of KPIs or key performance indicators.
This guide details everything about Global Capability Centers (GCC) and explains their definition, types of services offered, ways of operating, advantages of the GCC model, and real examples of GCC strategy in practice.
A Global Capability Center (GCC) is defined as a company that manages certain business processes / operational functions for another company, usually in a different country. The services GCCs typically offer range from:
The primary motivation of a Global Capability Center (GCC) model is to take advantage of outsourcing to a specialized provider that can manage routine, non-core activities, which further allows the client organization to concentrate on principal business activities.
A Global Capability Center (GCC) is defined as the unit that is set to control and provide certain business processes, functions, or services that are geographically dispersed. This practice started as far back as the 1990s with a narrow scope of call center and data management. Expansion of technologies and the internet dramatically boosted economic growth, prompting wider services GCCs support across various industries such as:
GCCs are becoming remarkably popular around the globe, especially in India, the Philippines, and Poland, where high-skilled work is available at lower pay rates. Spanning from hundreds to billions of dollars, the global GCC market continues to expand rapidly. Predominantly due to digital transformation efforts and a focus on maximizing operational effectiveness.
How to Get Started with a Global Capability Center (GCC):
1. Needs Assessment
In order to increase efficiency and concentrate on core activities, the company determines which business processes or functions can be assigned to a GCC.
2. Choosing GCC Partners
Based on cost-effectiveness, expertise, and alignment with strategic objectives, the organization conducts research before choosing a GCC provider.
3. Contracting:
To specify the parameters of the project, the deliverables, the schedule, the quality requirements, and the cost structure, formal agreements are made.
4. The Transition Stage
The chosen procedures are transferred to the GCC. Included in this stage are: Knowledge transfer, employee onboarding (if applicable), process documentation, and training
5. Monitoring of Operations and Performance
While the client continuously tracks performance through KPIs, reports, and frequent communication, the GCC begins running and overseeing the designated processes.
The many services offered by Global Capability Centers (GCCs) are generally divided into three primary categories:
1. GCC Front-Office Services
These roles entail face-to-face communication with clients and support both client satisfaction and company expansion. Teams in a GCC handle client engagement, support, and sales as Customer Service Representatives (CSRs).
Customer service, technical support, telemarketing, and sales are a few examples. Help desk services are another.
These services aim to guarantee brand consistency, increase revenue, and enhance the customer experience.
2. GCC Back-Office Services
Back-office operations are internal processes that are necessary for business continuity, even though they do not directly involve interacting with customers. These services assist in supporting overall operations and streamlining administrative procedures.
Data processing and entry, payroll and accounting, and human resources management are typical examples.
These responsibilities guarantee dependable back-end support and effective front-end team operations.
3. GCC IT-Enabled Services (ITES)
These technology-driven services concentrate on using IT tools and platforms to handle intricate, digital, or data-driven tasks.
Software development, IT infrastructure management and support, data analytics, and cloud services are a few examples.
ITES providers in the GCC are essential to automation, innovation, and digital transformation.
Delivery Models for the GCC by Region. Geographical ties to the parent company are another way that GCCs are grouped:
Onshore GCC: Situated in the same nation as the parent business.
Nearshore GCC: Situated in a neighboring nation, frequently in a comparable time zone.
Offshore GCC: Situated in a far-off nation, this location is frequently chosen for its talent availability and cost effectiveness.
For instance, a U.S.-based business might establish an offshore GCC in the Philippines for customer service or a nearshore GCC in Mexico for IT development.
Businesses can gain several strategic advantages from Global Capability Centers (GCCs):
1. Cost Efficiency: Reducing labor and operating expenses can be achieved through partnership or establishment. When compared to local terms, offshore GCCs can provide services at a substantially lower cost.
2. Pay Attention to Core Skills: Organizations can reallocate resources to innovation, business expansion, and improving customer experiences by moving non-core functions to a GCC.
3. Obtaining Worldwide Talent: GCCs give businesses access to a worldwide talent pool with specialized knowledge and industry experience, allowing them to take advantage of skills that are not easily accessible internally.
4. Flexibility and Scalability: GCCs provide agility in rapidly shifting markets by being able to swiftly scale services up or down in response to changing business needs.
5. Enhanced Quality and Productivity: To provide exceptional performance and reliable results, many GCCs make use of automation, cutting-edge technologies, and process improvement techniques.
The GCC model has potential drawbacks despite its benefits:
1. A decrease in operational control
Sometimes a company's direct oversight is limited when tasks are delegated to outside teams.
2. Risks to Data Security
Strong cybersecurity and compliance measures become even more crucial when sharing sensitive data with outside partners.
3. Barriers to Communication
If not properly handled, time zone and language barriers can cause coordination issues.
4. Quality Issue
Poor service delivery may arise from working with providers who are underfunded or underqualified.
By choosing trustworthy GCC suppliers, establishing clear expectations with Service Level Agreements (SLAs), and keeping open lines of communication regularly, these risks can be reduced.
Numerous reputable international suppliers with a range of capabilities support the GCC industry:
1. Accenture: A pioneer in consulting engagement solutions, providing services in customer experience, IT, finance, and human resources.
2. Concentrix: Known for its customer engagement solutions, this company serves international brands in more than 40 countries.
3. TRANSFORM: Offers finance, supply chain, risk, and data analytics services with an emphasis on digital transformation.
4. Teleperformance: One of the biggest international providers of customer service, with multilingual contact centers.
5. WNS: Focuses on industry-specific services for verticals such as healthcare, insurance, travel, and logistics.
Both startups and large corporations are looking to:
Establishing or collaborating with a GCC could be a very smart move if these are your company's objectives. Success, however, requires thorough preparation, partner selection, and vigilant supervision.
An offshore team is only one aspect of a Global Capability Center. It is a strategic partner that assumes responsibility for particular tasks to support companies in becoming more productive and competitive. The GCC model represents a shift in how contemporary businesses view agility, specialization, and international expansion, far beyond cost savings.
GCCs are crucial to the future of international business operations because of their expertise in everything from data analytics to customer service.
Trust TRANSFORM Solutions to be your partner in operational transformation.
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