What Is a Global capability center and Why GCCs Are the Future of Business Operations

• Wisecor
• 2 May 25

What Is a Global capability center and Why GCCs Are the Future of Business Operations

Business operations have evolved dramatically in the last decade. From handling processes in-house to exploring full outsourcing, many companies are now adopting a hybrid middle ground: Shared Service Centers (SSCs) and Global Capability Centers (GCCs).

These models offer the cost-efficiency of outsourcing with the control of in-house operations, making them a preferred choice for companies navigating digital transformation.

Recent industry studies show that:

• Over 1,800 GCCs operate in India alone, employing more than 1.66 million professionals as of 2023.
  
• 58% of Fortune 500 companies leverage shared or global service centers to streamline operations.
  
• The global shared services market is expected to grow at a CAGR of 22%, reaching $152 billion by 2030.

What Is a Global Capability Center (GCC)?

A Global Capability Center (formerly Global In-House Center or GIC) is a specialized offshore unit fully owned by the parent company. These centers handle strategic functions, including analytics, R&D, compliance, and digital transformation.

India, in particular, dominates the GCC market, offering:

• Up to 60% savings in operational costs
  
• Access to a vast talent pool with financial, tech, and compliance expertise
  
• Favorable time zone alignment for global collaboration

GCCs are no longer just support functions they’re centers of innovation, analytics, and digital excellence.

What Is a Shared Service Center (SSC)?

A Shared Service Center is a centralized unit that consolidates operational functions such as finance, HR, IT, or compliance, previously managed by individual departments. The key aim is efficiency, consistency, and scale.

Common functions managed by SSCs:

• Accounts payable/receivable
  
• Payroll and benefits administration
  
• Regulatory compliance
  
• Procurement and vendor management
  
• Financial reporting and audits
  

These centers often use automation tools, performance dashboards, and AI-based workflows to boost speed and accuracy. In fact, companies implementing SSCs report a 30–40% reduction in operating costs and a 25% improvement in service quality within the first year.

How Do Shared Service Centers and GCCs Work?

Shared Service Centers (SSCs) and Global Capability Centers (GCCs) operate using a centralized delivery model, with clearly defined Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) to measure outcomes. They serve multiple internal clients (departments or business units), creating a hub-and-spoke model that promotes:

• Standardized workflows
  
• Centralized technology systems
  
• Unified reporting and analytics
  
• Continuous improvement via automation
  

These centers typically use advanced ERP platforms (e.g., Microsoft Dynamics, SAP) along with process automation and AI tools to handle repetitive tasks with minimal human intervention.

Which Industries Benefit Most from Shared Service and GCC Models?

While almost every industry can benefit, certain sectors have seen significant transformation:

1. Banking, Financial Services & Insurance (BFSI)

• GCCs handle compliance, fraud monitoring, risk analysis, and financial forecasting. 
• In India, over 40% of GCCs serve the BFSI domain, with companies like Goldman Sachs and JP Morgan leading the way.

2. Healthcare & Life Sciences

• SSCs streamline procurement, billing, and regulatory reporting. 
• GCCs contribute to digital health analytics, telemedicine platforms, and R&D support.

3. Manufacturing & Supply Chain

• Centralized vendor payments and inventory management via shared services. 
• GCCs drive innovation in procurement, logistics automation, and sustainability reporting.

4. Technology & IT Services

• GCCs in India power R&D, product engineering, and cybersecurity for global tech firms. 
• India accounts for 50%+ of all new global tech GCC setups, thanks to access to skilled developers and data scientists.

What Are the Key Benefits of Adopting a Shared Services or GCC Model?

Businesses moving to a shared service or GCC framework experience significant improvements in:

• Cost Efficiency: Up to 30–60% cost savings depending on the function and geography.
  
• Process Standardization: Better control, consistency, and reduced errors.
  
• Digital Enablement: Easy integration of AI, RPA, and analytics tools.
  
• Agility: Faster decision-making and scalability in global operations.
  
• Governance: Enhanced control over compliance, data security, and reporting.

How to Set Up a Shared Service Center or GCC Successfully

Setting up a shared service center or global capability center isn’t just about relocating operations. It’s about creating a future-ready foundation for your business with the right mix of people, processes, and technology.

1. Define Clear Objectives

Start with a business case. Are you aiming to reduce costs, improve standardization, scale operations, or enhance digital capabilities? Defining the objective helps you select the right structure SSC or GCC and align resources accordingly.

2. Choose the Right Location

India continues to lead as the preferred location due to:

• Large talent pool across finance, HR, analytics, and compliance
  
• Proven track record in IT and business services
  
• Up to 60% lower operational costs compared to Western markets
  
• Mature infrastructure and regulatory environment

Other rising hubs include Poland, the Philippines, and Mexico, depending on time zone and language preferences.

3. Design the Governance Model

Implement SLAs, escalation matrices, and reporting systems to ensure accountability and service consistency. Many successful GCCs use a hub-and-spoke governance model with a centralized decision-making core.

4. Invest in Technology Infrastructure

Ensure access to ERP systems, cloud solutions, automation tools (RPA), data security protocols, and collaboration platforms from the start. This technology backbone is essential for seamless global coordination.

5. Build a Skilled, Agile Team

Recruit professionals who not only understand technical functions (accounting, HR, IT) but also bring critical thinking and innovation. Include continuous learning programs to upskill teams as services evolve.

Common Challenges in Setting Up SSCs and GCCs

Despite the benefits, companies face several roadblocks in implementation:

• Change management issues from legacy teams
  
• Inconsistent processes across regions or departments
  
• Data migration and tech stack integration complexities
  
• Initial high setup costs and ROI uncertainty
  
• Talent retention, especially in high-demand domains like data analytics

Mitigating These Challenges

Proactive communication, involving leadership early, and creating a roadmap for digital transformation help ease the transition. Partnering with local experts and automation-first service providers also reduces implementation time and risks.

How Technology Is Powering the Future of Shared Services and GCCs

As companies scale globally, technology is no longer a support tool it’s the core enabler of modern Shared Services and Global Capability Centers. From AI and automation to cloud platforms and analytics dashboards, technology is transforming how these centers deliver value.

Intelligent Automation and RPA

Robotic Process Automation (RPA) has become a game-changer. It automates repetitive tasks like invoice processing, employee onboarding, tax calculations, and data entry. When applied to shared service functions, RPA can:

• Reduce process cycle times by up to 70%
  
• Lower operational costs by 30–40%
  
• Minimize errors and rework across workflows

GCCs often lead enterprise automation programs, acting as innovation labs for global organizations.

AI-Driven Insights and Predictive Analytics

Shared service centers now leverage artificial intelligence to go beyond process execution. With AI-powered tools:

• Finance teams can forecast cash flow and detect anomalies
  
• HR teams can predict attrition or hiring needs
  
• Compliance teams can monitor risk and automate audit trails

Predictive analytics improves strategic decision-making and offers proactive problem-solving, especially in large organizations with complex data sets.

Cloud Platforms and Integrated ERPs

Modern SSCs and GCCs use cloud-based ERP systems like Microsoft Dynamics 365, SAP, or Oracle to integrate functions across locations. These platforms offer:

• Real-time visibility across finance, HR, and procurement
  
• Scalable architecture for global expansion
  
• Secure, role-based access and data sharing

By integrating shared services through cloud ERP, companies eliminate silos and improve data consistency across the board.

Digital Workflows and Self-Service Portals

Employee Self-Service (ESS) portals, ticketing systems, and chatbots are now standard in shared service environments. These tools improve user experience and reduce support overhead by up to 50%.

With automation in place, shared service teams shift from transactional support to strategic roles enabling GCCs to drive business transformation, not just support.

The Future of Shared Service Centers and GCCs

As business environments grow increasingly complex, the role of shared services and GCCs will only expand. These models are moving from being operational cost centers to becoming strategic innovation hubs.

Companies are now establishing Centers of Excellence (CoEs) within their GCCs, focused on emerging domains like:

• ESG reporting and compliance
  
• Blockchain-enabled accounting
  
• Cybersecurity management
  
• Advanced HR analytics and employee experience

India continues to lead as the global hub for these services, and with rising demand, we expect the GCC talent base to cross 2 million professionals by 2026. Strategic decision-makers are now viewing GCCs not as outsourcing alternatives but as critical enablers of transformation combining automation, governance, and domain expertise under one scalable unit.

Frequently Asked Questions (FAQs)

1. What is the difference between a Shared Service Center and a Global Capability Center?
   A Shared Service Center (SSC) centralizes functions like finance or HR within a company, typically in the same country. A Global Capability Center (GCC) is an offshore, company-owned center that delivers a broader set of services and often includes strategic functions like analytics and R&D.
2. Which industries benefit the most from shared services and GCCs?
   Industries like BFSI, healthcare, IT, and manufacturing have seen strong benefits due to their process-heavy, compliance-driven operations.
3. What is the ROI of setting up a GCC?
   Most companies recover their setup investment within 18–36 months, depending on the scale and services. They report 30–60% cost savings and major improvements in process visibility and efficiency.
4. Is automation necessary for shared services?
   Yes. Automation significantly enhances speed, accuracy, and scalability. It allows teams to focus on analysis and decision-making instead of routine processing.
5. Can small or mid-sized businesses set up shared services?
   Absolutely. With cloud tools and flexible delivery models, even smaller businesses can benefit from centralized services, especially in finance and HR.

Shared Service Centers and Global Capability Centers are no longer future-forward concepts they are today’s strategic advantage. Whether you’re scaling across regions, standardizing compliance, or embracing automation, SSCs and GCCs are the infrastructure your business needs to stay competitive.