What will you get from this article?
A clear look at how leading Global Capability Centers (GCCs) are moving beyond cost savings and becoming innovation engines. You’ll see what’s driving this shift, how modern centers operate, and a practical roadmap for GCC leaders who want to build long-term enterprise value.
The Traditional GCC Model: From Cost Arbitrage to Stagnation
For years, the standard GCC blueprint focused on cost arbitrage. Enterprises built large teams in talent-rich global locations to reduce labor expenses. These centers handled IT support, back-office operations, and standardized processes. They performed well for a time, but the landscape has changed.
Margins from pure cost plays are shrinking. Wages in major destinations have risen, automation has replaced repetitive work, and talent gaps have narrowed. More importantly, enterprises now expect GCCs to contribute to business growth, not just incremental savings. In 2025, only 15% of centers remain in this cost-driven stage. Half are now moving toward skill-based value, while 35% focus on innovation-led mandates.
The Tipping Point: Why GCCs Must Evolve
Three forces are pushing GCCs into their next chapter:
1. Accelerating Digital Transformation
AI, cloud, automation, and data science are reshaping enterprise operations. GCCs that can’t support or lead these initiatives risk losing relevance.
2. Economic Shifts
Rising costs and tougher competition for talent weaken the appeal of old offshore models. Enterprises want GCCs to deliver speed, agility, and clear business outcomes.
3. Diminished Returns from Legacy Models
“Cheaper is better” no longer holds. Sustainable value now comes from capabilities, intellectual property, and enterprise-wide excellence.
The question facing leaders today is simple: What does the next-generation GCC look like?
Defining GCC 2.0: The Three Pillars of Modern Innovation
High-performing GCCs are reshaping their mandates around three pillars:
1. Centers of Excellence (CoEs) for AI and Data Science
Top GCCs use CoEs to unlock competitive advantage through machine learning, automation, and advanced analytics. These teams don’t just support – they lead experimentation, R&D, and enterprise-wide transformation. Nearly 92% of GCCs are now piloting or deploying AI, yet most still need structured approaches to connect innovation with measurable ROI.
2. Full-Stack Product Ownership
GCCs are becoming product hubs rather than task-based delivery centers. They own digital products end-to-end, from concept to continuous improvement. This shift gives enterprises faster launches, stronger digital experiences, and long-term product relevance.
3. Global Process Automation
Automation is now core to scale. GCCs deliver RPA, cognitive automation, and intelligent workflows that uplift not just efficiency, but revenue impact and customer experience.
Together, these pillars transform GCCs from support engines into strategic drivers of enterprise growth.
Real-World Examples: How GCCs Are Leading Innovation in 2025
Innovation-led GCCs are already reshaping industries such as life sciences and industrial manufacturing.
In life sciences, global leaders are anchoring R&D, drug discovery, and patient innovation in Indian hubs. AI-driven models help accelerate product pipelines, enhance clinical insights, and build IP from within the GCC. EY’s 2025 report notes that nearly half of the world’s top 50 life sciences companies now operate major GCCs in India – many with mandates directly tied to product and research advancement.
Industrial GCCs are also seeing a major shift. A recent McKinsey study highlights how automation frameworks, modern tooling, and integrated CoEs are reducing time-to-market and improving compliance. These are no longer exceptions – they’re becoming the new benchmark.
The Roadmap to Transformation: Five Steps to Build GCC 2.0
For leaders ready to modernize their centers, a structured approach helps accelerate impact:
1. Secure Strategic Leadership Alignment
Transformation requires senior leadership commitment to a renewed GCC mandate. Alignment on objectives, innovation priorities, and expectations sets the foundation.
2. Invest in Upskilling and Talent Mobility
Modern GCCs invest heavily in capability building. Cross-border rotations, internal mobility, and AI-native upskilling ensure teams stay ahead of business needs.
3. Modernize Tooling and Infrastructure
Cloud platforms, DevOps pipelines, and AI-driven workbenches are essential. They boost collaboration, enhance security, and shorten innovation cycles.
4. Foster a Culture of Experimentation
Innovation thrives where teams can test, fail, and scale ideas quickly. Forward-looking GCCs encourage pilots, hackathons, and cross-functional experimentation with clear pathways to adoption.
5. Define and Track Innovation KPIs
Impact is measured through IP creation, time-to-market, automation yield, and enterprise-level value delivered. Consistent reporting builds credibility and drives new mandates.
When these steps come together, the GCC evolves from an execution arm to a strategic growth engine.
Measuring the ROI of Innovation: What Leaders Should Track
The next generation of GCC success metrics focuses on enterprise outcomes, not just operational savings:
- Intellectual Property Created: Algorithms, patents, and proprietary frameworks.
- Time-to-Market: Speed of taking ideas from concept to launch.
- Automation Yield: Reduction in manual work and improvements in accuracy.
- Enterprise Value Delivered: Impact on revenue, customer outcomes, and competitiveness.
GCCs that can link these metrics to business performance consistently attract greater investment and executive visibility.
Frequently Asked Questions
What are the three pillars of GCC 2.0?
AI/Data CoEs, full-stack product ownership, and enterprise-wide automation.
How can a GCC measure innovation impact?
By tracking IP creation, automation yield, time-to-market improvements, and enterprise-level results.
Why isn’t cost arbitrage a sustainable strategy anymore?
Rising wages, automation, and shifting strategic priorities have reduced the long-term value of pure cost-based models.
Which industries are leading GCC transformation?
Life sciences, industrial manufacturing, and financial services are at the forefront – especially GCCs based in India.
What’s the first step in transforming a traditional GCC?
Securing leadership alignment around a renewed mandate for innovation and enterprise value.
Turning GCCs into Growth Engines: Key Takeaways and Next Steps
The back-office-only GCC is a thing of the past. Talent, technology, and enterprise priorities have shifted, and today’s most advanced centers act as strategic partners for growth. AI, automation, and product ownership now sit at the core of modern capability-building.
If your organization is ready to evolve from incremental savings to innovation-driven value, this is the moment to reimagine your GCC mandate.
Qatalys helps enterprises design, modernize, and scale GCCs that deliver long-term impact.
With experience in AI-led transformation, full-stack product teams, and automation at scale, we support organizations at every stage of their GCC journey.
Explore how our GCC setup and transformation services can accelerate your shift to GCC 2.0.
