GCCs have become Strategic Hubs that Influence Global Strategies: Model N

Global Capability Centers (GCCs) in India have undergone a remarkable transformation, evolving from cost-saving hubs to innovation powerhouses. Initially established to capitalize on cost arbitrage, these centers have since embraced core strategic roles in global organizations. Today, GCCs are driving digital transformation, product development, finance, and HR innovation, making India a global leader in the GCC landscape. In this insightful conversation with Amit Singh, Biu Davis, Senior Vice President of Engineering at Model N, discusses how GCCs are shaping global business strategies, accelerating digital transformation, and fostering innovation across various business functions

Please tell us how GCCs in India are driving innovation and influencing global strategies within their parent organizations.

Global Capability Centres (GCCs) have evolved from traditional cost arbitrage centers focused on outsourcing low-value tasks to strategic hubs for innovation and digital transformation. This transformation has been driven by a combination of global trends, changing business needs, and technology advancements.

Many GCCs drive core business outcomes by engaging in advanced areas like product development, R&D, data analytics, artificial intelligence (AI), machine learning (ML), and automation. They act as centers of innovation that influence global strategies, co-create digital products, and introduce disruptive business models. They focus on value creation – not just cost reduction – and embed agility and scalable digital solutions into the organization.

This evolution reflects how strategic alignment, talent, technology, and partnerships have reshaped the GCC model to meet the needs of a fast-changing business environment.

Can you provide specific examples of how GCCs are driving innovation in areas like finance, HR, and product development?

GCCs that own end-to-end processes are no longer limited to back-office support. Now, they are key drivers of transformation across various business functions. Their ability to independently manage processes, develop digital solutions, and optimize operations allows organizations to innovate faster, enhance customer experiences, and stay competitive in an evolving global market. Examples include:

Finance: GCCs now own the full financial cycle, from budgeting and forecasting to financial reporting and treasury operations. They also manage statutory reporting for multiple geographies, ensuring compliance and audit readiness.
Human Resources: The centers manage end-to-end HR operations, including recruitment, onboarding, learning and development, and employee engagement. They drive innovation in HR practices by experimenting with new tools and processes, which can be rolled out globally.
Product: GCCs own the entire product development lifecycle for existing products and innovate to launch new product ideas. The centers manage end-to-end digital products, including product development, cloud migration, cybersecurity, and digital banking solutions.

How do partnerships with Global Capability Centers (GCCs) help startups and mid-market organizations accelerate innovation and adopt emerging technologies effectively?

GCCs are vital partners for startups and mid-market organizations, offering access to expertise in IT, research, analytics, and customer support. These partnerships enable startups and mid-market organizations to tap into niche expertise, experiment with emerging technologies, and accelerate innovation through co-development.

Collaborations between GCCs and mid-market organizations create an ecosystem where co-innovation thrives. GCCs provide scalability, support strategic initiatives, and facilitate access to specialized knowledge in areas such as AI, cybersecurity, and cloud solutions. Partnering with startups brings fresh perspectives, accelerates digital transformation efforts, and enables the quick integration of emerging technologies into processes. This fosters innovation, enhances operational excellence, and helps maintain a competitive edge in the global market.

How do GCCs leverage their regional insights and innovation capabilities to help organizations navigate local market challenges while maintaining global competitiveness?

GCCs play a critical role in enabling organizations to expand globally by acting as knowledge hubs that drive market localization, regulatory compliance, and operational efficiency. By leveraging their innovation capabilities and regional insights, GCCs empower companies to scale globally, adapt to regional markets, and stay competitive in a complex business environment.

GCCs build alliances with local vendors, government bodies, and academic institutions, creating a collaborative ecosystem for market entry. These partnerships enhance the organization’s ability to navigate local challenges and accelerate the adoption of regional best practices. GCCs in talent-rich countries, including India, tap into skilled professionals with deep domain knowledge, fostering innovation.

Key considerations for successful expansion include conducting a comprehensive feasibility check, developing a robust talent acquisition strategy, and building strong governance structures to ensure compliance with local regulations. By setting up transformation offices and building business cases, GCCs – including Model N – contribute to seamless global integration, enabling expansion while managing risks and adapting to local market demands.

How do GCCs ensure they maintain the same level of innovation and operational efficiency when expanding into tier-2 and tier-3 cities, where infrastructure and resources may differ from traditional hubs?

As GCCs expand into tier-2 and tier-3 cities, organizations in the region are tapping into an abundance of talent, contributing to cost efficiencies and regional economic growth. The report, Future of GCCs in India – A Vision 2030, predicts high growth prospects for the Indian market, estimating the number of GCCs to be between 2,400 and 2,550 by the year 2030. This expansion has brought benefits such as lower labor costs, government support, and the availability of skilled professionals in IT, engineering, and customer service.

Further expansion into tier-2 and tier-3 cities allows organizations to access the enormous talent pool outside traditional GCC hubs, enhancing cost efficiencies and boosting regional growth.

Model N’s expansion into Hyderabad has enabled us to leverage high-caliber talent. The cost-efficiency and scalability offered by these markets are driving our long-term growth strategies.

How do micro GCCs maintain agility and specialization while ensuring alignment with the broader goals and strategies of the parent organization, especially when operating in smaller cities?

Micro GCCs are compact satellite centers—usually with a small workforce of 50 to 200 employees—that specialize in specific functions or technologies. They often operate independently or as part of a network of distributed centers, allowing large organizations to deploy highly targeted solutions.

Micro GCCs are gaining popularity due to their specialized focus on key technologies or functions like AI, data and analytics, Internet of Things (IoT), or cybersecurity. A micro GCC focused on AI/ML works exclusively on advanced predictive models, enabling the parent company to leverage cutting-edge capabilities. A cybersecurity-focused micro GCC can swiftly respond to new threats, developing solutions faster than larger, multi-functional units. A micro GCC focused on IoT solutions can roll out connected devices faster, helping the parent company launch products ahead of competitors.

I see micro GCCs as an effective way to address the growing need for specialization, agility, and faster time-to-market in a highly competitive environment. By setting up smaller, focused centers in smaller cities, organizations unlock niche talent, improve business continuity, and reduce operational costs. This model is poised to play a critical role in the next phase of global expansion and digital transformation.