Global Capability Centers (GCCs) are dedicated captive centers that handle operations and IT support of large enterprises. They support many important business goals and serve as centers of excellence.
They have been playing a prominent role for many years, and their relevance has grown tremendously since the COVID-19 pandemic.
GCCs have grown beyond just providing cost benefits as they also play a crucial role in driving the sustainability factors of parent companies. A company's sustainability practices are analyzed against the following metrics - Environmental, Social, and Governance (ESG).
After the pandemic, organizations face immense pressure to have better ESG disclosures and numbers as investors become more environmentally responsible. GCCs play a huge role in helping businesses stay ahead of the curve in the post-pandemic world.
GCCs and their Benefits
As dedicated offshore centers, GCCs assume responsibility for many of their parent enterprises' operations, including product development. Parent companies also rely on GCCs to execute data-centric and tech-heavy projects. Proceed to the list mentioned below to know more about how GCCs positively impact enterprises.
1. Cost Effectiveness
GCCs can save a lot of money by eliminating vendor margins. Furthermore, companies look to establish their global capability centers in countries like India, which offers a high-quality talent pool at a low cost. Today, India has over 1500 GCCs and generates over $33.8 billion in revenue.
2. Increased Operational Resilience
Since GCCs are located at different locations, enterprises don't have to rely on a single unit to provide 24X7 customer support. Any technical difficulty a global capability center faces can be supported by a sister center at a different location, thus increasing the resilience of large enterprises' operations infrastructure.
3. Strong Cybersecurity
Since GCCs allow their employees to work remotely, they face a risk of cyber-attack, especially among GCCs in healthcare, pharmaceutical, and financial services. However, after the COVID-19 pandemic, GCCs have expanded and strengthened their cybersecurity teams to alleviate cyber threats.
Driving Sustainability in the Post-Pandemic World
Although the sustainability of a large enterprise is traditionally gauged by its ESG metrics, after the pandemic, the definition of sustainability has grown to include technology transformation, business models, human capital development, work arrangements, and culture.
Furthermore, consumers demand more sustainable services and products in the products and retail space. Hence, it is important to understand how a global competency center is driving sustainability in today's world.
1. Going Hybrid
During the COVID-19 pandemic, GCCs led the way in creating and sustaining organizational resilience. They stuck to their work-from-home model religiously and achieved pre-pandemic levels of productivity. Post-pandemic, GCCs intentionally choose the hybrid model as it has many benefits, including attracting talent irrespective of location. Other benefits include reduced carbon emissions and travel costs, as hybrid work options minimize the necessity to travel to the office.
2. Investing in Technology
GCCs have invested in emerging technologies like artificial intelligence, advanced analytics, and machine learning. These powerful tools can help drive sustainability by providing environmental-friendly solutions. Innovations are increasingly becoming ecocentric following investor and consumer demands.
3. Recruiting Top Talent
After the pandemic, GCCs have started recruiting actively. Recruiting top talent will be very important as global capability centers seek to bridge the gap between them and their parent organizations. With increased climate consciousness among desired candidates, GCCs with good ESG metrics can hire top talents worldwide.
4. Tracking ESG Metrics
Investors and consumers are becoming increasingly environmental- and social-centric. They are even willing to pay extra for services and products that resonate with their idea of sustainability. Considering the latest trend, GCCs have started tracking and reporting ESG metrics to help build trust.
Global Capability Centers to Drive Sustainability
GCCs can play a crucial role in the context of sustainability by driving eco-friendly practices and reducing carbon footprints across the organization. By leveraging their expertise, these centers can help their parent companies to adopt sustainable business models and achieve their environmental goals, thereby contributing to a greener and more sustainable future.
Moreover, by integrating sustainability into their core operations, GCCs can not only help their parent companies to mitigate environmental risks but also unlock new business opportunities, drive innovation, and enhance their overall brand reputation.
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