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Setting Up a Global Capability Center (GCC) in India: A Comprehensive Guide and Success Factors
Setting Up a Global Capability Center (GCC) in India: A Comprehensive Guide and Success Factors

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Introduction

Global Capability Centers (GCCs), also known as Global In-House Centers (GICs), have become a pivotal part of global operations for multinational companies. These centres are established to deliver a wide array of business processes and IT services, including research and development, finance, human resources, and customer service. India has emerged as a leading destination for setting up GCCs due to its robust talent pool, cost advantages, and mature IT ecosystem.

This article outlines the steps involved in setting up a GCC in India and explores the key factors contributing to the high success rate of these centres in the country.


Why Choose India for a GCC?

India's rise as a preferred location for GCCs is attributed to several advantages:

  • Skilled Talent Pool: India produces a vast number of STEM graduates each year, making it a fertile ground for technical and business expertise.
  • Cost Efficiency: Operating costs in India are lower compared to many Western countries, offering substantial savings while maintaining high-quality services.
  • Mature IT Infrastructure: With advanced IT parks, reliable connectivity, and regulatory support, India is well-equipped for seamless global operations.
  • Government Support: The Indian government offers numerous incentives to foreign companies, such as tax benefits and ease of doing business, which facilitate setting up operations.

Steps to Set Up a GCC in India

1. Feasibility Study and Market Research

Before establishing a GCC, it's essential to conduct a thorough feasibility study. This involves evaluating:

  • The specific services and functions the GCC will deliver.
  • The talent availability in key cities such as Bangalore, Hyderabad, Pune, and Chennai.
  • Regulatory and legal requirements for setting up business operations.

A market study helps identify the right city and determine the operating model—whether it's a fully captive GCC or a hybrid model with third-party service providers.

2. Legal and Regulatory Compliance

Setting up a GCC in India involves complying with local laws and regulations, including:

  • Company Registration: The first step is to register a legal entity in India, which may be a private limited company, a branch office, or a subsidiary.
  • Foreign Direct Investment (FDI) Approvals: India allows 100% FDI in most sectors, simplifying the process for foreign companies.
  • Labor Laws Compliance: Employers need to adhere to India's labour laws, which cover wages, working hours, and employee welfare.

3. Infrastructure and Technology Setup

After legal compliance, the next step is establishing the physical and IT infrastructure:

  • Office Space: India offers a wide array of options, from co-working spaces to fully dedicated office complexes in IT hubs.
  • Technology Platforms: Depending on the services offered, robust IT infrastructure is essential. This includes data centres, cloud services, cybersecurity measures, and network connectivity.
  • Vendor and Partner Selection: Choosing the right local partners for IT, HR, payroll, and legal services can expedite the process.

4. Talent Acquisition and Workforce Planning

India’s vast talent pool is a key driver for GCC success. The recruitment process should focus on:

  • Hiring the Right Talent: Recruit skilled professionals in areas like IT, finance, R&D, and customer support.
  • Onboarding and Training: Provide extensive onboarding programs to align new hires with the company’s global standards and culture.
  • Talent Retention: Focus on career development, continuous learning, and competitive compensation packages to retain top talent.

5. Operationalizing the GCC

Once the legal and infrastructure elements are in place, the GCC can be operationalized:

  • Process Standardization: Ensure that business processes align with global standards to maintain consistency.
  • Management and Governance: Set up a strong leadership team that can manage day-to-day operations while reporting to global headquarters.
  • Continuous Improvement: Implement key performance indicators (KPIs) and feedback loops for ongoing improvements in service quality and operational efficiency.

Success Rates of GCCs in India

India has become home to over 1,500 GCCs, with new ones being set up at a rapid pace. The success rate of GCCs in India is notably high due to the following factors:

1. Strategic Location and Industry Concentration

  • Cities like Bangalore, Hyderabad, and Pune have become GCC hubs, offering not just talent but also a developed ecosystem of IT services, consulting firms, and start-ups.

2. Proven Track Record

  • GCCs in India have consistently delivered high-quality services across multiple industries, including BFSI, healthcare, telecommunications, and manufacturing. Companies like Goldman Sachs, Citibank, and Walmart have established GCCs that have evolved from basic operations to centres of innovation.

3. Scalability and Flexibility

  • India’s GCCs are known for their scalability. Multinationals often start with smaller operations and scale up based on performance and business needs. Additionally, the flexibility of India’s workforce allows companies to quickly adapt to changing market conditions or new technology requirements.

4. Innovation and R&D

  • Many GCCs in India have transitioned from being back-office support centres to innovation hubs. With a focus on research and development, several GCCs are now involved in creating new products and solutions for their global parent companies.

5. Cost and Operational Efficiency

  • The cost advantages of operating in India continue to be a major factor in the success of GCCs. Coupled with technological advancements and quality of service, India provides an unbeatable value proposition for global companies.

6. Government Initiatives

  • India’s favourable policies towards foreign investment, including tax incentives and simplified compliance processes, play a crucial role in the smooth operation of GCCs. Initiatives like Digital India and the Smart Cities Mission further enhance the technological landscape.

With a robust talent pool, cost efficiencies, and a mature IT ecosystem, India remains the go-to destination for Global Capability Centers (GCCs). By strategically setting up and managing these centres, companies can drive operational excellence and fuel innovation and business growth on a global scale.


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Founded in 1987, Systems+ is a leading technology solutions provider driven by the integrated blend of People, Process, and Technology. Our key service offerings include Global Capability Centers- GCCs (a disruptive alternative to offshoring) and Technology Services such as Cloud Solutions, DevOps, Salesforce Commerce Cloud, ServiceNow, Data, Cybersecurity, and IT Consulting. Our one-step-at-a-time approach enables seamless integration of the latest technology with legacy-based systems to form a curated IT ecosystem with maximum business agility. With the philosophy of 'Be. Disruptive.' and more than three decades of experience in enabling digital, our perfect play of talent and technology will ensure that your business’s unique needs are met, and that you #GetITRight!

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