— A Point of View on the Next Phase of GCC Evolution

For nearly three decades, the Global Capability Center (GCC) story was relatively easy to explain.

An engineer in the US or Western Europe cost significantly more than an equivalent engineer in India. The economics were compelling, the business case straightforward, and for many enterprises the decision practically made itself. Build in India, scale quickly, and unlock cost efficiency.

Cost arbitrage was the original logic. And to be clear, it still matters. CFOs still care about efficiency. Boards still expect operating leverage. Any serious discussion around GCCs that ignores economics is incomplete.

But if we are honest, cost is no longer the primary reason enterprises are setting up GCCs in India.

India today hosts more than 2,100 GCCs employing over 2.3 million professionals and contributing nearly $100 billion in market value to the global economy, according to the latest Nasscom–Zinnov GCC report. At this scale, it is difficult to argue that the model is still primarily about labor arbitrage.

The conversation has changed.

Increasingly, when global CEOs, CIOs, and business leaders discuss GCC strategy, the question is no longer, “How much cheaper is this?”

The question is far more strategic:

What can this GCC do that we cannot build faster, better, or more effectively anywhere else?

That is a fundamentally different question. It signals a shift from cost arbitrage to strategic capability.

The GCCs that will matter most over the next decade will not necessarily be the largest or the cheapest. They will be the ones that can build, concentrate, and continuously reinvent high-value capability faster than their peers.

That is what we refer to as Capability Density.

The Capacity vs Capability Trap

Capability density is not about how many people sit inside a GCC. It is about the concentration of meaningful, deployable, business-relevant expertise that the enterprise can direct toward its most important priorities. 

Many GCCs today still confuse capacity with capability.

Capacity is relatively easy to measure. It tells us how many engineers we have, how many tickets we can process, and how many programs we can support. Capability is harder to measure because it asks a more uncomfortable question: what can this organization actually own, influence, and deliver?

Those are not the same thing.

Adding 500 engineers increases capacity. It does not automatically increase capability. Yet many organizations continue to behave as though scale itself proves strategic relevance. It does not. In fact, one of the more uncomfortable truths about GCC evolution is this: large GCCs are not automatically strategic GCCs.

Sometimes scale hides the problem. 

A center can have thousands of employees, excellent utilization, strong SLA adherence, and highly efficient delivery metrics while quietly becoming less relevant to the enterprise’s future. It can become operationally efficient but strategically stagnant.

This happens more often than many leaders are willing to admit. 

Traditional GCC metrics were designed for a different era. Cost per seat, SLA performance, throughput, and productivity made sense in a shared-services world focused on efficiency and execution discipline. But enterprises no longer expect GCCs merely to execute.

They increasingly expect them to modernize platforms, accelerate product engineering, drive AI adoption, and own business-critical outcomes.

That changes the rules of the game.

Why AI Has Made This Urgent

The GCC model has evolved in waves. The first wave was about cost. The second wave was about ownership, as centers proved they could run functions and platforms with increasing autonomy.

The third wave is about capability concentration.

AI has accelerated this shift dramatically. If there is one force exposing the difference between capacity and capability, it is AI. The half-life of technical skills has compressed sharply. Skills that made a GCC highly competitive even three years ago are no longer sufficient. What felt advanced eighteen months ago is rapidly becoming baseline.

The enterprise capabilities being built today around agentic systems, LLM orchestration, autonomous workflows, and AI-native architectures will define competitive advantage for years to come. This creates a structural challenge that hiring alone cannot solve.

Training alone cannot solve it either. That is where the industry often confuses activity with progress.

Many GCCs proudly report AI training numbers to headquarters. Thousands trained. Hundreds certified. Dashboards look impressive. Executive reviews sound reassuring. But training completion tells us very little about actual capability. It tells us people attended courses. That is all.

It does not tell us whether those individuals can design production-grade AI architectures, build retrieval-augmented systems, or deploy agentic workflows within enterprise governance constraints.

That gap matters enormously.

The Visibility Problem Most GCCs Have 

A recent EY GCC Pulse Survey found that 58% of GCCs in India are already investing in agentic AI and nearly two-thirds have dedicated innovation teams.

The problem, clearly, is not lack of AI investment. The real question is whether that investment is translating into deployable enterprise capability.

A GCC may report that 2,000 engineers completed AI learning programs. The more relevant question is much simpler and far more uncomfortable:

How many of them can actually build and deploy enterprise-grade AI systems today?

The answer is usually much smaller than leadership assumes. This is where risk begins to accumulate. And the real danger is not capability absence. The real danger is capability illusion.

Capability absence is visible. You know you have a problem.

Capability illusion is far more dangerous because it creates false confidence. Leadership assumes capability exists, makes strategic commitments based on that assumption, and discovers the gap only after transformation programs are underway—when the cost of correction is highest.

Most GCCs do not have a pure talent problem. They have a visibility problem.

They do not truly know what capability exists inside the organization, how deep it runs, where it is concentrated, where it is shallow, or how quickly it can be rebuilt when priorities shift.

Capability Alone Is Not Enough 

This is where the conversation often becomes too technology-centric. Even if a GCC has deep technical capability, that capability creates little enterprise value unless the operating model allows it to matter. 

• Can the center influence product decisions? 
• Does it own architecture? 
• Can decisions be made at speed? 
• Does headquarters trust the GCC with strategic mandates? 
• Are governance structures enabling ownership or constraining it? 

These questions matter just as much as technical skill. Many highly capable GCCs underperform not because the talent is weak, but because capability remains trapped inside outdated governance structures. 

The expertise exists. The enterprise simply cannot leverage it effectively. That is why the future of GCCs cannot be understood through a talent lens alone. 

It must be understood through the combined lens of talent, operating model, governance, and strategic trust.

The future GCC will be measured less by size and more by strategic concentration of capability.

The Shift from Scale to Capability Density

This brings us to another uncomfortable truth. Volume and value do not go together indefinitely.

At some point, GCCs must make deliberate choices about what to stop doing in order to create room for higher-value capability. Centers that continue absorbing low-value transactional work at scale may continue growing in size while simultaneously reducing their strategic relevance.

Bigger is not always better. Sometimes becoming more strategic requires shrinking certain kinds of work to create room for more valuable capability.

That is a difficult conversation, but an increasingly necessary one.

What the Next Chapter Requires

The GCCs that will define the next decade will not be measured primarily by headcount, cost efficiency, or footprint size. Instead, they will be judged by something far more consequential: the business-critical capabilities they own, how quickly they can build new ones, and how effectively they can reinvent themselves as enterprise priorities shift.  

These are no longer theoretical questions reserved for strategy workshops—they are increasingly board-level questions that influence investment decisions, mandate allocation, and long-term relevance. The GCC of 2030 will not be judged by how large it became, but by how strategically relevant it remained to the enterprise. And more than anything else, that strategic relevance will be determined by its ability to build and sustain capability density. 

The GCC of 2030 will not be measured by headcount. It will be measured by how strategically and swiftly it concentrates capability.