What Are Global Capability Centers (GCCs)? A Comprehensive Guide
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The Global Capability Centers (GCCs) have emerged as impactful features for global businesses as they are capable of enabling companies to enhance their innovation, improve efficiencies, and cut costs strategically. Nowadays, these centers are usually referred to as work centers. They are a core part of any business, serving various industries including healthcare.
In this guide, we answer the following questions: What are global capability centers? Why do they continue to rise in prominence? How can Global Capability Centers be successfully configured? What trends are expected to dominate the year 2024?
What Are Global Capability Centers?
Global Capability Centers, commonly referred to as GCCs, are purpose-built facilities developed by international firms to establish and coordinate business process management and service delivery through innovation across the globe.
These centers aim to provide specific strategic capabilities, harnessing local talent and resources while also driving cost effectiveness. For this reason, GCCs are usually based in areas that have a high availability of skilled human resources as well as relatively low costs and thus offer expansive business scope.
Emerging trends in GCCs
- Bengaluru’s Dominance: Among the 1.66 million plus employees, who were employed by GCCs, about 42% of ER&D workforce reside in the city of Bengaluru.
- Market Growth: The GCC market’s size grew at a rate of 11.4% during the year ending October 2022. It had 42% of its activities as product hubs.
- Market Size in FY23: The GCC market expanded to USD 46 billion, of which USD 25.6 billion, or 55%, came from the ER&D market.
- Functional Model: More than 960 GCCs work on a shared services basis in 3 main areas: IT, HR and Finance & Accounting (F&A).
- ER&D Talent Growth: ER&D has been a major driver, growing at a CAGR of 10.7%, contributing 42% of talent additions in the last two years.
This data also demonstrates that GCCs’ roles in innovation and efficiency are steadily improving.
5 Benefits in Setting Up Global Capability Centers
Global Capability Centers (GCC) can be very beneficial to the MNCs. These are the five reasons that have made companies build such centres:
- Cost Efficiency
- Access to Talent
- Innovation and Agility
- Enhanced Business Continuity
- Scalability
Cost Efficiency
Global capability centres can bring about operational efficiency by using cost-effective labour availability, technologies, and also the scale of operations.
Access to Talent
Another advantage is getting access to a competent talent pool of professionals in various fields, including engineers and data analysts, which can be found in countries such as India, where GCCs are established.
Innovation and Agility
GCCs accelerate innovation by providing spaces conducive to product development, technology integration, and process enhancements.
Enhanced Business Continuity
Because of a diverse network of GCCs, business continuity is ensured even when there are localized disturbances.
Scalability
GCC’s allow the ability to build infrastructure capabilities to advance product, or process by providing a distinct focus area for such activities..
5 Best Practices for Setting Up GCCs
To gain maximum value from a GCC, five best practices can be followed:
- Clearly Define Objectives
- Choose the Appropriate Location
- Spend on the Appropriate Technologies
- Encourage Collaborative Environment
- Monitor and Optimize Performance
Clearly Define Objectives
Set specific expectations for the GCG. For instance, improve innovations, ensure low cost of operations, or even both.
Choose the Appropriate Location
Consider geographic areas with a highly-skilled talent pool, easier cost factors, and the presence of regulations that support your business operations.
Spend on the Appropriate Technologies
Use state-of-the-art technologies like ProHance (explained below) to improve productivity and operational efficacy.
Encourage Collaborative Environment
Establish a workplace culture that fosters interdepartmental collaboration and coherence with the parent organization.
Monitor and Optimize Performance
Regularly assess GCC operations through KPIs to ensure alignment with strategic objectives.
Global Capability Centers in Healthcare
Healthcare has been one of the industries that have embraced GCCs particularly with an aim of penetration in the market, reducing costs and providing better services.
Key Contributions
- Clinical Research & Development: Healthcare GCCs are engaged in drug discovery, clinical development, trial phases, and other tailored healthcare and medical investigations.
- Technology-Driven Solutions: They supply technological tools, including AI diagnostics, telemedicine platforms, and EHR management.
- Operational Support: Functions such as management of patient data, billing, and compliance reporting are enhanced through GCCs.
- Scalability for Global Outreach: As the quality of services is assured, healthcare institutions extend their practice all over the world with the use of GCC.
Global Capability Centers Trends in 2024
- Increased Focus on AI and Automation: In order to facilitate operations and improve decisions, GCCs are progressively incorporating AI and automation.
- Industry-Specific GCCs: There would be a growing need for GCCs with specialization in areas such as healthcare, financial services, and manufacturing.
- Sustainability Initiatives: A number of GCCs are incorporating the green agenda, which is in line with global sustainability goals.
- Hybrid Work Models: The new normal will be more of a hybrid environment where employees will be working both remotely and in physical locations.
- Data Security Enhancements: Cyber threats have been on the increase. Therefore GCCs are investing in strong data protection practices so as to secure the business.
Role of ProHance in Improving GCC Operations and Strategy
It is very clear how ProHance happens to be a great tool supporting your GCC strategies and operations.
Key Features
- Productivity Tracking: ProHance provides information on employee productivity and time used to perform the tasks with the help of work time tracking, which guarantees efficient operations.
- Workload Balancing: It provides teams features to distribute workloads appropriately, thus creating a healthy working environment that is rewarding.
- Data-Driven Decision-Making: With the aid of real-time analytics, GCCs can make strategic decisions based on what works best.
- Seamless Integration: ProHance integrates with your existing tools with minimal intervention.
Also Read: Address Inefficiencies in Global Capability Centers with Workflow Automation
Conclusion
For the companies that want to innovate and optimize as well as bash their operational capabilities – Global Capability Centers have become a necessity. Stacking local skill with advanced technological capabilities, GCCs are transforming global business dynamics for all industries including that of healthcare.
For GCCs, the year 2025 will usher in more changes propelled by technology, sustainability agenda, and the rising need for niche services. Best practices including the application of tools like ProHance would ensure that organizations harness their full GCC potential for growth and competitiveness without endangering the firm.
Frequently Asked Question
Q1. What are global capability centers?
Global Capability Centers (GCCs) are niche centers set up by multinational companies to understand and support specific global business processes with a key focus on research, efficiency, and scalability.
Q2. Why should a company set up a GCC?
GCCs have great cost advantages, have enough talent to scale operations and provide improved level of continuity in business making them essential in global strategies.
Q3. In what ways are GCCs enhancing healthcare services?
GCCs in healthcare improve the efficiency of clinical trials, manage operational processes such as billing, and expand the reach with technology-powered services.
Q4. In the coming year, what will be the main trends within GCCs?
Among the main trends are the technological advancements where artificial intelligence is incorporated, green initiatives, work-from-home and hybrid models, and GCCs by core industries.
Q5. In what ways does ProHance enhance the operations of GCCs?
ProHance enhances productivity, evens out workloads, and offers insights based on data thus making it a critical tool in the management of GCC activities.
