Setting up a GCC in India: 5 Mistakes to Avoid

Establishment of the Global capability Center (GCC) is a powerful strategy for global enterprises that are looking to customize costs, reach diverse talent pools, and promote innovation. While the attraction of setting up a Global Capability Centres in India is strong, many companies stumble due to common yet avoidable losses during their early efforts. These mistakes can cause significant cost increases, operational disabilities, a lack of talent, and a failure to realize the complete strategic capacity of the GCC.

From low assessment of cultural integration to a clear value transfer proposal beyond cost savings, businesses often make fundamental mistakes that derail their GCC operations. Understanding these disadvantages and adopting the best practices from GCC advisory experts and excellence center models is important for a successful and sustainable offshore development center or shared service center that actually acts as a strategic property, whether through a build-operate-transfer model or through the GCC as a Service model.

1. Lowering Strategic Vision and Value Beyond the Cost

Many enterprises look at their first GCC only from a cost-arranged perspective and fail to define a strategic vision beyond immediate savings.

The Oversight: Companies focus only on deduction in labor costs, which leads to “lift and change” of low-value tasks rather than innovative or main business functions. The result of this often results in limited mandates, low morale, and high migration in the GCC, as talent wants more challenging roles.

While the initial cost savings is a driver, more than 70% of GCCs based in India are now involved in product ownership and high-value strategic functions, moving only from the cost centers.

Solution: Define a clear, long-term strategic vision for GCC. Identify specific GCC services that can promote innovation, accelerate product growth, or create centers of excellence in a particular domain (e.g., AI/ML, cybersecurity, or Data Analytics). Align the goals of GCC directly with the global purposes of the original company. This ensures that GCC becomes a strategic asset, not only a cost center.

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2. Cultural Integration and Neglect of Communication

A disconnection between headquarters (HQ) and the GCC team can severely disrupt productivity and give rise to high turnover.

The Oversight: Companies often ignore cultural nuances, communication styles, and the need for strong integration between global teams. It may appear as a feeling of hierarchical friction, language, or cultural reference due to misunderstanding, lack of psychological security, and being a “second-class citizen” for the GCC team.

A report states that the top quartile for diversity is 35% more likely to get financial returns above their national industry average, which highlights the importance of integrated teams.

Solution: Invested heavily in cross-cultural training for both headquarters and GCC teams. Promote continuous, transparent communication through shared platforms and regular check-ins. Install integrated KPIs and OKRs to ensure shared goals. Promote inclusive leadership practices and create face-to-face interactions or virtual team-building activities to bridge geographical and cultural differences. This is an important area where a GCC advisor can provide invaluable guidance.

3: Underestimating Talent Acquisition and Retention Challenges

Despite India’s huge talent pool, it can be unexpectedly challenging to attract and maintain the right talent for offshore development center.

The Oversight: Many enterprises believe that access to a large talent pool means recruitment and retention are easy. They can use general job details, delay leadership recruitment, or fail to provide competitive compensation and career development opportunities to the Indian market. This delays high attrition rates and scaling.

A multinational tech company, which installed GCC in Bangalore, faced a 25% attrition rate within the first year due to better salary and career growth. In addition, 9 out of 10 GCC leaders believe that if the current strategies continue, the supply of talent will be reduced by 2030.

Solution: Develop a strong, localized talent strategy. Appoint the head of your Indian branch quickly, someone who understands both the local talent landscape and your global charter. Provide a competitive salary, comprehensive profit, and clear career progress path. Invest in continuous learning and development programs. Create a strong employer brand that emphasizes the strategic importance of GCC in India and promotes a positive work environment. Taking advantage of special GCC consulting firms for talent solutions can greatly accelerate recruitment and improve retention.

4: Inadequate Infrastructure and Technology Planning

IT infrastructure and lack of foresight in technology integration may weaken the operational efficiency of GCC.

The Oversight: Companies may underestimate the need for strong, scalable IT infrastructure, reliable internet connectivity, and strong cybersecurity protocols. They can also fail to integrate the GCC system easily with the existing technology stack of the original company, leading to incompetence, data silos, and security weaknesses.

A global Fintech company in India faced delays and unexpected infrastructure costs due to non-compliance with data localization criteria, which required financial data to be stored locally.

Solution: Setting up a GCC in India requires investment in world-class IT infrastructure from day one, including unnecessarily high-speed internet, a safe network, and strong data backup solutions. Apply a comprehensive cybersecurity structure (e.g., ISO 27001, SoC 2 compliance). Take advantage of cloud-based devices and platforms to ensure uninterrupted cooperation and measurement. For offshore development centers, ensure strong version control systems and an integrated growth environment.

5: Clear Governance and Lack of Demonstration Metrics

Without defined roles, responsibilities, and measuring KPIs, the GCC can struggle to display the value and align with global purposes.

The Oversight: Companies often fail to install clear governance structures and display metrics for their GCC. This leads to ambiguity in roles, repetition of efforts, difficulty measuring ROI and the assumption that the GCC is not providing solid value to the original organization. This is especially challenging for those who opt for shared service centers or build operating transfer models if the transfer norms are not clear.

Without clear metrics, it is difficult to measure the effect of GCC. It is important to define success on the basis of customer impact, revenue, and innovation.

Solution: Install a strong governance structure with clearly defined roles, responsibilities, and accountability in both headquarters and the GCC. Apply measuring KPIs (Key Performance Indicators) and OKRs (objectives and key results) that align with GCC’s strategic purposes and overall business goals. Regularly review the performance, give creative feedback, and seek constant opportunities for process adaptation and automation. The inclusion of GCC advisory experts can help prepare effective governance models.

By understanding and actively addressing these top five mistakes, enterprises can successfully establish GCC in India and convert it into a powerful engine for global development and innovation, whether adopting a traditional model or a more flexible GCC as a Service model.

Conclusions

The establishment of a Global capability Center in India provides immense strategic possibilities, but it is necessary to avoid common losses for success. Enterprises often define GCCs as cost centers only by ignoring significant cultural integration, by reducing local talent acquisition challenges, by failing to plan strong IT infrastructure, and by stumbling by declining clear governance and performance. To be really successful, businesses must define a clear strategic vision, promote intensive cultural alignment, invest in local talent strategies, ensure world-class infrastructure, and implement strong governance. By focusing on active GCC advice and long-term value creation, your GCC will turn your GCC into a powerful engine for innovation and sustainable global business expansion from the only cost center.

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Setting up a Global Capability Center is a strategic leap—don’t let early missteps drain your time, talent, or investment. Contact Inductus Global. Our expert team helps enterprises sidestep the top mistakes and build scalable, future-ready GCCs from day one. We have a strong network of industry partnerships that drives transformational outcomes. The team is specialized in specific fields to help you reach from just an idea to a powerful global impact. Rest assured, it is a worthy investment to catalyze innovation and maintain a competitive benefit in the market.

frequently asked questions (FAQs)

What do enterprises make the biggest mistake while installing their first GCC?

The biggest mistake is often to see GCC only as a measure of cost cuts, rather than define a clear strategic vision for its long-term value, innovation, and contribution to main business functions. This can lead to low use of talent and high decomposition.

How can the inclusion of GCC advisory firms help to avoid common mistakes?

GCC advisory firm offers invaluable guidance to all aspects of GCC setup, which include defining strategic vision and selecting the right place, ensuring legal compliance, developing talent strategy, and implementing strong governance. Their expertise helps companies to avoid expensive losses and speed up the value of time.

What is the difference between the ``shared service center`` and ``Center for Excellence`` in terms of GCC?

A shared service center mainly focuses on standardizing and consolidating regular operating functions for cost efficiency. On the other hand, the Center for Excellence (COE) focuses on specialized expertise, innovation, and capacity development, leading to high-value results. Many GCCs develop from SSC to COE.

What is the ``Build Operate Transfer (BOT) model`` in GCC setup?

A third-party vendor in the build-operate-transfer model establishes and operates the GCC for the initial period, and then the client transfers complete ownership and control to the client company after operations are stable. This may reduce initial risks but require clear transfer norms.

What is the role of digital change and AI in the modern GCC?

Modern GCCs are important for AI for digital change and commercial innovation. They are no longer about back-office functions; They are developing AI solutions, leading product ownership, and carrying advanced analysis forward. Ignoring this ability is an important mistake, as it limits the strategic effect of GCC.

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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.