Why Mid-Sized Businesses Are Adopting the GCC Model

Discover why mid-sized businesses are adopting the Global Capability Centre (GCC) model — from cost efficiency and global talent access to faster innovation and scalability.

Mid-sized businesses are quickly adopting the Global Capability Centre (GCC) model as it helps them grow efficiently, access top talent, save costs, and innovate rapidly in a competitive global market. For mid-sized companies, setting up a GCC offers these benefits with manageable investment and scalable operations.

Here's an easy-to-understand explanation for you with the latest insights. Learn why mid-zoed businesses are embracing the GCC model with open arms.

What is a GCC for mid-sized companies?

A Global Capability Centre (GCC) is a facility fully owned by a company. It is usually set up in another country, where critical functions like IT services, research and development (R&D), data analytics, and customer support are carried out.

It is different from traditional outsourcing, as GCCs serve as strategic centres for innovation and business growth for the parent company. For mid-sized GCCs (usually 500 to 2000 employees), this model helps overcome local challenges and compete globally with better efficiency.

Why mid-sized companies prefer the GCC model

Key benefits of GCC for a mid-sized company

• Have access to the global talent: Mid-sized companies often struggle to find the required expertise in the local areas. But with the help of GCCs, they can access a wide range of skilled professionals globally in technology, analytics, finance and research.
• Cost savings: Operating a GCC offshore can definitely reduce labour and operational costs by 30-50% compared to onshore operations. This is what allows mid-sized GCCs to invest more in innovation and expansion.
• Scalability: GCCs allow businesses to scale up or down their teams and technology resources as needed. This provides flexibility for growth or market changes.
• Faster innovation: when a company centralises their R&D and tech teams, it helps mid-sized GCCs to innovate rapidly using advanced technologies like AI and machine learning.
• Improved operational efficiency: Offloading specialised, repetitive processes to GCCs boosts productivity and lets parent companies focus on core business areas.
• Global expansion support: GCCs also help mid-sized companies expand into new geographies by building local presence and market knowledge at low risk.

Common challenges GCCs solve for mid-sized companies

Here are the major challenges and how GCC solves them:

• Talent shortage: GCC helps get access to skilled professionals globally
• High operational costs: Cuts costs with lower-cost locations
• Limited scalability: GCC provides flexible scaling without heavy investments
• Geographical expansion: Supports presence in new markets
• Need for rapid innovation: GCC helps in centralising and accelerating R&D efforts

Strategic steps for successful GCC implementation

Mid-sized companies should focus on clear planning and governance to a large extent to implement GCCs effectively. Here are the steps to do so:

• Set clear goals: Define the specific business functions and outcomes the GCC will handle.
• Choose the right location: Select locations that offer skilled talent, infrastructure, cost benefits, and favourable regulations.
• Develop a roadmap: make sure to plan schedules, resource allocation, and risk management carefully.
• Invest in talent development: Provide training to ensure GCC teams have updated skills.
• Enforce governance: Maintain strong oversight to meet business and legal requirements.
• Adopt new technologies: Use AI and automation to maximise GCC efficiency and innovation.

Future for Mid-Sized GCCs

• GCCs are all set to increasingly drive sustainable growth and global competitiveness for mid-sized companies.
• Women's leadership in GCCs is expected to rise significantly, thereby supporting diversity and inclusive growth.
• Adoption of AI, cybersecurity, and Industry 4.0 technologies will deepen in mid-sized GCCs. This will further boost innovation.
• The GCC model will spread to emerging markets beyond traditional centres. With this, it will tap into new talent pools and growth opportunities.

Conclusion

Mid-sized GCCs provide mid-sized companies a powerful way to grow smarter and faster. Undoubtedly, this model has numerous challenges like talent shortages, cost pressures, and the need for innovation and flexibility. However, with careful planning, the GCC approach can help mid-sized companies to compete effectively on the global stage while reducing risks and investing in sustainable growth.

WeWork helps in this journey of mid-sized GCCs by providing them with ready-to-use office spaces that are flexible and fully equipped. This means companies can start working quickly and easily expand their space as they grow. They do not have to worry about long leases or big upfront costs with WeWork.