Global Capability Centers (GCCs) have emerged as a significant business model, particularly in the eCommerce sector. In the late 1990s, US-based companies established GCCs in India to capitalize on labor cost arbitrage. However, these centers faced initial challenges regarding talent acquisition, compliance with local laws, process setup, quality management, and global communication. Over time, India’s expertise in these areas has grown exponentially, making it an attractive destination for establishing GCCs. With over 1500 GCCs employing more than 1.5 million professionals as of 2023, companies seeking to leverage India for global service delivery capabilities must consider several crucial factors.
- Clearly Defined Strategic Objectives: Companies should identify their key strategic objectives and determine the desired time scale for achieving them. Whether the focus is on building a low-cost delivery center, driving scale, or fostering strategic innovation capabilities, a well-defined execution strategy is crucial. One needs to align talent onboarding, capability development, alignment with global teams, and outcome measurement with the specific objective. Lack of clarity and consensus among leadership can hinder the long-term success of GCC initiatives.
- Craft a Robust Talent Strategy: A comprehensive talent strategy is vital for the success of GCCs. One must consider the factors such as the availability of the right talent, cultural fit, career paths, employee retention, global opportunities, and competitive compensation and benefits. GCCs should attract and retain top talent by fostering a conducive work environment that promotes growth, collaboration, and innovation.
- Effective Transition Management: When transitioning to offshore centers, it is essential to establish a robust working model between global teams and the GCC. Seamless coordination, effective knowledge transfer, and regular communication channels are crucial for successful collaboration. Transparent and efficient workflows, well-defined roles and responsibilities, and a culture of shared goals will help bridge the geographic gap and build cohesive teams.
- Compliance with Local Laws and Intellectual Property Protection: Adhering to local laws regarding employees, nature of work, and intellectual property protection is critical. Companies must stay current with labor regulations, tax requirements, data protection laws, and any legal considerations specific to the country of operation. Protecting intellectual property assets is equally vital, and organizations should establish robust measures and contractual agreements to safeguard their innovations and proprietary information.
- Engaging Local Partners: Engaging the right local partners can significantly enhance the success of GCC initiatives. Local partners bring deep expertise, talent acquisition capabilities, and administrative support. By offloading administrative tasks, GCCs can focus on core business functions and scale their processes effectively. The choice of partners should align with the organization’s values, objectives, and culture, ensuring a synergistic collaboration.
Conclusion
Global Capability Centers have evolved into powerful enablers for the eCommerce industry, providing cost advantages, operational excellence, and access to a vast talent pool. To maximize the benefits of GCCs, companies must prioritize vital strategic objectives, craft a robust talent strategy, establish effective transition management, ensure compliance with local laws, and engage the right local partners. By addressing these aspects, organizations can leverage the immense potential of GCCs to drive growth, innovation, and global success in the eCommerce landscape.
