How is GCCs COPO Model Benefiting Businesses?

Global capability centers, or GCCs are bringing transformative changes to today’s business landscape. They provide easy access to specialized talent, research and development abilities, and rapid scalability to empower organizations on a global scale. These offshore centers are dominated by several operational models to suit the unique needs of their parent organizations. Build-Operate-Transfer (BOT) Model and Shared Service Model are the common forms.

However, the one that is reshaping the ecosystem of global capability centers in India is the Company Owned Partnered Operated (COPO) Model, introduced by Inductus GCC, which has evolved as a framework of operational excellence. It has been setting new benchmarks for responsiveness, scalability, and overall asset management and therefore its adoption is likely to surge by 25% by 2030 among both mid-sector companies and MNCs.

Below is a comprehensive guide on how this model can benefit business.

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1. Cost Efficiency :

The USP of the COPO model is an 80% reduction in capex over 5 years which reduces overhead expenses and helps businesses reallocate funds to strategic investments. This is due to proper resource optimization and a shared infrastructure.

The model is also known for 60-70% lower costs of operations since India is less expensive than the Western countries. Further, multi-city expansions expenses are 30% lower which helps maintain service consistency across different locations.

Overall, by choosing the COPO model’s cost optimization strategies, businesses can benefit from a higher operating margin for competitive advantage. However, regardless of this affordability, Indian GCCs do not compromise on leveraging exceptional talent, advanced technologies, and robust operational agility. Therefore, companies looking to grow their businesses globally without spending a bulk amount upfront must consider the COPO model for their global capability centers.

2. Asset Control :

GCC’s COPO model offers complete asset control and ownership to its parent company. As per Inductus’ reports, 94% of enterprises adopting COPO report greater asset control which ensures an alignment with core business goals and a stable operational dynamics. This includes IP retention which is quite critical because it safeguards unique intellectual property of a company which is necessary to differentiate from rivals and ensure competitive advantage in the market.

Apart from this, the parent company also has the ownership of infrastructure and proprietary processes which is quite unlike traditional outsourcing. Overall, this allows organizations to focus on core operations rather than being distracted by functional complexities

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3. Risk Mitigation :

COPO offers shared operational responsibilities, which helps reduce risks by a whopping 40%. This is possible due to partner-led compliance management and shared operational responsibilities. In fact, companies typically report a 30% drop in tax and legal liabilities when compared to direct foreign ownership models.

Therefore, when investing in the COPO model, businesses can rest assured that they will maximize regulatory incentives and tax benefits. Further, with lowered risks as the top factor, companies are able to successfully achieve operational stability within 6 months instead of the usual 30 months for fully owned subsidiaries by organizations. They have less operational burden in terms of compliance, regulatory management, and even talent acquisition.

4. Operational Readiness :

The COPO framework is designed in a way that it can establish a company’s GCCs within 90 days. It is especially helpful for time-sensitive industries like healthcare, fintech, and technology where an extended setup timeline is not feasible. 90-days set up helps ensure faster time-to-market to unlock new potential, tap on the best opportunities first, acquire more clients, and stay ahead of competitors. All of these make COPO an excellent alternative to traditional outsourcing.

The good news here is that despite quick market entry, there is no gap in legal and regulatory compliances which would otherwise bring liability issues. This benefit of COPO is useful for all companies looking to bring their innovative solutions to the market without the cost of setting up a digital innovation center traditionally.

5. Unmatched Scalability :

Parent organizations can fully leverage their GCCs infrastructure and workforce which allows them to scale operations 5X faster than conventional captive centers. This further helps with a 62% faster expansion in tier-2 and tier-3 cities.In short, COPO is a highly scalable business model offered by these centralized hubs to assist businesses in scaling their operations both up and down with resource allocation and standardizing processes. Overall, this is extremely feasible, especially for mid-sector organizations who typically have evolving needs and will benefit from COPO model’s lean and agile operations.

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Conclusion

The COPO model is a result of rigorous research and deep industry insights. It is poised to gain more traction in the coming years with AI, automation technologies, and machine learning to ensure greater productivity and strategic value. While the COPO model has already evolved as the cornerstone of operational excellence, it further has a promising future turning GCCs into more like digital twins of their parent HQs. This is because businesses are increasingly valuing seamless collaboration, leveraging local expertise and culture, and maintaining complete control and ownership over their operations. Overall, COPO is not just a service model, it is the future of GCCs in India.