Risks of Global Capability Centers (GCCs) and How to Overcome Them

Understand the key risks of setting up Global Capability Centers (GCCs), including operational, legal, and cultural challenges. Learn how to mitigate them and run successful GCC operations.

A lot of large corporations are now establishing Global Capability Centres or GCCs, which are unique offices in foreign nations for tasks like IT support, finance, customer service, and so on. Corporations prefer to establish GCCs in certain nations because it might be less expensive, and provide access to qualified employees there. Although there are several positive aspects of GCCs, there are some issues that the companies should be vigilant about. Let's understand the risks related to GCCs.

Also Read: What Are Global Capability Centres (GCCs) & How to Set Up a GCC in India

Issues in day-to-day operations

One big risk is that something will always interrupt the work at the centre. It might be a power outage, internet problems, or even a city protest. In some nations, these events occur more frequently. To mitigate this issue, firms need to create robust backup systems, have contingency plans, and collaborate with local partners to continue operations.

Employing and retaining employees

Many individuals aspire to work in GCCs, but most of them also quit due to compensation or poor growth. High attrition and hiring delays may also be signs of poor leadership. Companies can address this by fixing leadership issues, offering better career growth, and providing a pleasant work environment.

Rules and regulations

Each nation has its laws. There are regulations concerning working hours, taxes, wages, and privacy data. A company can be fined or even closed if it does not respect them. So, it is useful to use the services of local attorneys or professionals who are well aware of the country's regulations.

Data and security issues

GCCs often work with sensitive customer data. To avoid the risk of any data breach, companies should use strong cybersecurity tools and train their staff to be careful online.

Communication and cultural gaps

People in different countries may speak different languages, and they might not always be comfortable communicating with global teams. The way they work can be different, too. This can cause confusion or miscommunication. To solve this, companies must strike a balance between global culture and local cultural dynamics.

Different goals

Sometimes, the GCC is not clear on what the parent company wants. This means they may work on less important things or go in the wrong direction. To fix this GCC risk, the company should make sure the GCC team understands the main goals, and they must communicate often to stay aligned.

Scaling issues

Most companies want to grow their GCC over time. But sometimes, they can’t find enough office space or good managers. To avoid this, they should plan for the future, hire strong leaders, and pick a location where there is enough talent and space to grow.

Reputation risk

A GCC is part of the main company. If something goes wrong there, like bad customer service or a data leak, the whole brand can be affected. So it’s very important that the GCC works at the same high standards as the main company, especially when dealing with customers.

Also read: How to start a business in India?

Conclusion

If companies are careful and plan well, they can reduce the risks and get the best out of their GCC. One way to reduce stress is by choosing good workspaces. WeWork workspaces offer flexible and ready-to-use offices that help companies avoid many of the usual workspace problems. With WeWork, your team gets a safe, smart, and inspiring place to work, so you can focus on doing great work without worrying about the office.