What is a Global Capability Center (GCC)?

A Global Capability Center (GCC) is a centralized offshore unit established by an organization to deliver strategic services such as IT, engineering, analytics, finance, and R&D to support global operations.

What is an Offshore Development Center (ODC)?

An Offshore Development Center (ODC) is a dedicated team located in a different country that focuses primarily on software development, application maintenance, and technology support for a client.

What services are commonly delivered through a GCC?

GCCs provide services such as IT operations, product engineering, data analytics, cybersecurity, finance and accounting, HR services, and research and development.

What are the key benefits of setting up a GCC?

Key benefits include cost optimization, access to global talent, operational scalability, faster innovation, improved control, and long-term strategic value creation.

Which industries commonly use GCCs and ODCs?

Industries such as technology, banking and financial services, healthcare, manufacturing, retail, telecom, and automotive commonly leverage GCCs and ODCs.

What locations are popular for setting up GCCs and ODCs?

Popular locations include India, Eastern Europe, Southeast Asia, Latin America, and the Philippines due to strong talent pools and cost advantages.

How long does it take to set up a GCC or ODC?

The setup timeline can range from a few weeks to several months, depending on factors such as location, scale, infrastructure requirements, and governance model.

Is a GCC or an ODC better for long-term growth?

A GCC is generally better for long-term strategic growth and innovation, while an ODC is ideal for rapid execution, flexibility, and short- to medium-term technology needs.

How do GCCs and ODCs help with cost optimization?

They reduce costs by leveraging lower labor expenses, optimizing resource utilization, minimizing infrastructure investments, and enabling round-the-clock development through time-zone advantages.

How is data security and IP protection handled in GCCs and ODCs?

Data security is ensured through strict compliance frameworks, secure infrastructure, access controls, legal agreements, and adherence to international standards such as ISO, SOC, and GDPR.

Centre of Excellence Implementation Guide for Enterprises

According to 2024, global enterprises are allocating investments in Centres of Excellence (CoE) in excess of 18 per cent annually, accelerated by digital investments and the use of AI, and distributed delivery models. With over 1,800 Centres of Excellence, including several Global Capability Centres (GCCs), India has emerged as the world’s fastest-growing CoE destination. This growth is not merely coincidental. In addition to broadening the scope of innovation and protecting economic value in volatile markets, it is a shift in the structure of capability building upon enterprises.

Despite this growth, many Centres of Excellence do not have a long-term business impact. It is almost never because of ambition. The execution is almost the issue.

In this blog, we can describe the approach that enterprises should take when establishing a Centre of Excellence that goes beyond capability development and provides measurable long-term value.

Revitalising the Centre of Excellence Model.

A Centre of Excellence is no longer an aid operation or a level of governance. It is used in contemporary business as a strategy operating model, and its main features are the centralisation of expertise, standardisation of execution and speed in decisions made by business units.

The Digital Centre of Excellence today is directly related to the formation of enterprise priorities. CoEs, whether cloud-based, data-driven, AI-driven, cybersecurity-centric, or process-transformation-centric, are likely to have an impact on results rather than empowering teams. The most established organisations understand that a Centre of Excellence will only succeed if it is closely related to business need and economic benefit.

Why Enterprises Are Doubling Down On CoEs

There are a number of structural forces that are driving the adoption of CoE:

Increasing complexity of digital ecosystems and regulatory settings.
Talent concentration requirements, particularly in AI, data engineering, and cloud architecture.
Cost pressure where enterprises are under pressure to standardise and reuse instead of reinventing.
Expansion of global delivery, especially by Global Capability Centers in India.

India’s advantage is clear. In line with industry estimates of 2024, the cost efficiency of enterprises that operate with a Centre of Excellence in India is 30-40 per cent higher, and their end result is a quicker talent ramp-up and increased IP reuse than the fully onshore models. This is one of the most powerful sources of GCC growth reasoned by CoE.

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The CoE Readiness Check:

Enterprises have to answer four underlying questions before implementation:

What is the targeted business issue that CoE will address?
Who owns the budget, not just the results?
What will be the teams that consume CoE outputs?
What will the measure of value be other than activity measures?

Centres of Excellence will become independent centres of excellence with less influence on the company in the absence of this transparency.

An Implementation Framework of a Structured Centre of Excellence.

Phase 1: Define the Mandate

The CoE mandate should be enterprise strategy orientated. This includes:

Appropriate goals attached to revenue protection, efficiency, or innovation.
Clear boundaries of scopes to prevent overlapping of roles.
Measures of success which are business-related.

Phase 2: Designing the Operating Model.

The common options that businesses would adopt in terms of CoE are centralised, federated or hybrid. The appropriate model is related to organisational maturity and size.

CoE Model	Best Suited For	Key Advantage	Risk
Centralised	Early-stage CoEs	Strong consistency	Slower responsiveness
Federated	Large enterprises	Local agility	Fragmentation
Hybrid	Scaling organisations	Balance of control and speed	Governance complexity

Phase 3: Develop Capability and Talent.

An effective Centre of Excellence has a combination of profound technical skills and business translation. Key positions are domain architects, subject matter experts, platform owners and change leaders. The learning processes are to be continuous to adapt to the fast changes in technology.

Phase 4: Develop Resources and Systems.

Value scales through reuse. Digital Centres of Excellence that perform well are concerned with:

Reusable structures and accelerators.
Standardised toolchains
Best practices and playbooks are documented.

This strategy will save a lot of time-to-delivery among business units.

Phase 5: Value and Drive Adoption.

Early wins matter. Onboarding the stakeholders, change management, and visible business impact are key factors that will promote the trust and demand of the CoE.

The Art of Success: Going Beyond KPIs.

Conventional measures like ticket closure or training hours are not very informative. Established enterprises gauge CoE success by:

Cutting in delivery cycle time.
Asset reuse ratio
Stakeholder contentment in the business.
Avoidance and reduction of costs.
Ability enhancement amongst staff.

These indicators are real enterprise value rather than operations activity.

Top Five Implementation Pitfalls.

To establish Centres of Excellence in organisations, the following actions are likely to impede their own:

Addressing the CoE as a compliance function.
Governance structure overengineering.
Separation of CoEs and business teams.
Being tool-focused rather than result-oriented.

The only way out of such traps is to keep a consistent relationship between strategy, execution, and consumption.

The Future of Centres of Excellence

In the future, the Centres of Excellence will become the platforms of enterprise value. Artificial intelligence-based CoEs will facilitate anticipatory decision-making, cross-GCC partnership and IP monetisation. As Global Capability Centres expand in India, CoEs will emerge to organise innovation across geographies rather than working as entities.

The strategic relevance of well-designed CoEs is further supported by recent enterprise trends in the direction of AI governance structures and responsible innovation, which are due to the changes in the global regulation in 2024.

Influence and Implementation.

A Centre of Excellence can only be relevant, adopted, and scaled to bring value. Implementation is not a single project and is an ongoing process of alignment and development.

Those businesses that view Centres of Excellence as strategic resources, and not as overhead operations, will be in a better place to cope with complexity, manage cost and be leaders in a future characterised by speed and intelligence.

An excellently applied Centre of Excellence does not declare its influence. It entrenches it in the operations of the enterprise.

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frequently asked questions (FAQs)

Who are the Pharma GCC development leaders in India?

Hyderabad, Bangalore and Pune have become significant pharma innovation centres with global delivery centres of major biotechnological and pharmaceutical firms such as Novartis, Pfizer, AstraZeneca and GSK.

Which economic benefits do Pharma GCCs have?

They offer an economic benefit of calculation, a variety of scientific and technical human resources, and speedy time-to-market. On average, businesses reduce between 25-40 percent of the operational costs and increase the rate of innovation.

Which technologies are influencing Pharma GCC operations nowadays?

The next-generation operations of Pharma GCC focus on advanced molecular modelling, AI/ML-based drug discovery, cloud supercomputing, and data integration platforms, as well as quantum-ready simulations.

What is the role of AI in Pharma GCC processes?

Pharma GCCs use AI to screen molecules, predict the efficacy of drugs, optimise clinical trials and aid in making data-driven decisions, resulting in smarter, faster and safer drug pipelines.

How will Pharma GCCs look in five years to come?

Pharma GCCs will be global innovation ecosystems that are a combination of computational chemistry, generative AI, and quantum computing. They will turn into the hubs linking data science, discovery and regulatory intelligence in the global arena.

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Aditi

Aditi, with a strong background in forensic science and biotechnology, brings an innovative scientific perspective to her work. Her expertise spans research, analytics, and strategic advisory in consulting and GCC environments. She has published numerous research papers and articles. A versatile writer in both technical and creative domains, Aditi excels at translating complex subjects into compelling insights. Which she aligns seamlessly with consulting, advisory domain, and GCC operations. Her ability to bridge science, business, and storytelling positions her as a strategic thinker who can drive data-informed decision-making.