From Cost Centers to Value Creators: Decoding the starting point from GCC to GVO

GCCs have found their centre stage in the world and India once again has emerged as a powerhouse for these Global Capability Centers (GCCs). According to recent reports by McKinsey, the number of GCCs in India has grown from about 1,000 in 2019 to over 1,500 in 2023, employing more than 1.3 million people. Deloitte’s 2022 Global Shared Services and Outsourcing Survey indicates that 60% of respondents plan to increase their use of GCCs in the next 3-5 years, with India remaining the top destination. 

These offshore units, initially set up by multinational companies to handle business operations and IT support, are now undergoing a transformative journey to become Global Value Offices (GVOs). ANSR, a leading GCC advisory firm, reports that over 50% of Fortune 500 companies now have their GCCs in India, contributing to an estimated $80 billion in value creation annually. This shift represents a fundamental change in how these centers are perceived and operated – from cost-saving entities to strategic value creators. 

A study by Zinnov suggests that GCCs in India are rapidly moving up the value chain, with 30% of them now driving global innovation for their parent companies. This evolution is reshaping the role of Indian GCCs in the global business ecosystem, making them crucial hubs for innovation, research, and strategic decision-making. 

The GCC to GVO Transition: A Paradigm Shift 

The transition from GCC to GVO is more than just a change in nomenclature. It represents a strategic evolution where these centers move from providing basic support to driving innovation, owning end-to-end processes, and contributing to global decision-making. This journey, however, is fraught with challenges that need to be addressed systematically. 

 Challenges in the Journey

• Talent Drain: Retaining skilled employees in a competitive market.
• Innovation Stagnation: Moving beyond routine tasks to drive creative solutions.
• Cultural Disconnect: Aligning employee values with organizational goals.
• Limited Strategic Impact: Transitioning from a cost center to a value creator.
• Skill Obsolescence: Keeping pace with rapidly evolving technological landscapes.
• Siloed Thinking: Breaking down barriers to foster cross-functional collaboration.
• Weak Employer Brand: Positioning the GCC as an attractive workplace.
• Reduced Adaptability: Developing agility to respond to market changes.
• Limited Employee Growth: Providing clear career progression paths.
• Ineffective Knowledge Management: Ensuring efficient knowledge transfer and retention.

The Power of VOICE: A Framework for Transformation 

The transition from Global Capability Center (GCC) to Global Value Organization (GVO) is a monumental shift, requiring more than just operational adjustments. It’s a comprehensive transformation that demands a strategic realignment of the organization’s culture, capabilities, and vision.  

At TTC, we believe the key to this shift is embracing a fresh, modern approach. That’s why we developed the VOICE framework—a roadmap that guides GCCs as they evolve into GVOs. It’s not just about operational tweaks; it’s about transforming the way you think, work, and grow. 

V – Vision & Value Proposition: Aligning GCC strengths with organizational goals to drive strategic value. 

O – Optimized Communication Channels: Fostering global engagement through seamless, multi-channel communication. 

I – Internal Branding & Engagement: Strengthening employee loyalty and cultivating a culture of innovation. 

C – Collaboration & Alignment: Encouraging cross-functional collaboration to reduce silos and inefficiencies. 

E – Evaluation & Evolution: Leveraging data-driven insights for continuous improvement and scalability. 

This framework tackles the core challenges head-on. By focusing on vision alignment, it addresses innovation stagnation and limited strategic impact. Implementing the VOICE framework can lead to transformative outcomes for GCCs transitioning to GVOs.  

When you embrace the VOICE framework, you’re not just making small changes—you’re transforming how your GCC operates and the value it brings to the table. Here’s what you can expect: 

• Strategic Alignment: Clear alignment between GCC activities and organizational goals, enhancing the center’s ability to contribute to strategic objectives.
• Innovation Hub: Transformation from routine task executors to drivers of innovation, fostering a culture of creativity and problem-solving.
• Talent Magnet: Improved employee retention and attraction, positioning the GCC as an employer of choice in a competitive market.
• Knowledge Synergy: Enhanced cross-functional collaboration and efficient knowledge sharing across the organization, breaking down silos.
• Agile Operations: Increased adaptability to market changes, enabling quick pivots in response to new opportunities or challenges.
• Skill Evolution: Continuous skill development aligned with future needs, ensuring the workforce remain at the forefront of industry trends.
• Brand Enhancement: Stronger internal and external branding, elevating the GCC’s reputation within the parent company and the broader industry.
• Value Demonstration: Ability to quantify and demonstrate tangible value creation to the parent company, shifting perceptions from a cost center to a strategic asset.
• Global Integration: Better alignment with global teams and strategy, positioning the GCC as an integral part of the company’s global operations.
• Employee Growth: Clear career progression paths and increased job satisfaction, leading to a more engaged and motivated workforce.

Schedule a GVO Strategy Session: Transform Your Cost Center into a Value Driver 

India is primed to remain a global hub for GCCs, but the future belongs to those who make the leap to GVOs. Those who nail this transition won’t just stay ahead of the game—they’ll be redefining it. 

At toss the coin, we’re all about helping you make that leap. Ready to see how the VOICE framework can work for your team? Let’s chat about how to transform your GCC into a GVO powerhouse. 

Explore employer branding services for GCCs with toss the coin. 

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