5 Key Focus Areas for Global Capability Centers in 2023

If the two years of the pandemic were the period unplanned reinvention for organizations, things got intentional in 2022. GCCs took a lead in strategically designing a sustainable hybrid work model. They placed people at the center, technology at speed and innovation at scale.

In 2023, GCCs must reflect the key business imperatives, think ahead of the headquarters to enable product-based innovation, and continue to reimagine their EVP to avoid long-term risk of losing top talent to higher salary and attrition.

As GCCs continue to reshape their strategies to align with the emerging business paradigms, we look at the key trends that will shape the sector in 2023.

On peer-level with the HQ

In a post-pandemic world, we have entered the golden age for borderless global teams. Mature GCCs have moved up the value chain from the role of ‘doers’ to centers of excellence for advanced digital capabilities. In 2023, even early-stage GCCs will see beyond the current scope and help the HQs grasp new opportunities, form strategic plans to adapt to new business trends, and build new capabilities.

As the lines are rapidly blurring between the GCC and the headquarters, GCCs will own key, differentiating new business capability narratives and demonstrate business value by underpinning such capabilities into the company’s products and services. Opportunities include cloud, data engineering, AI, info security, RPA, blockchain, etc. In short, GCCs will be the enterprise, complete with company leaders, ownership of functions and accountability for business results.

More from less

Inside most boardrooms, clear signs of a recession are top of mind, and they’re seeking ways to become more cash-conservative. Companies will increasingly look to their GCCs to build systems at scale and reduce the human effort required to build things.

Automation, AI and RPA AI can make a meaningful impact on reducing costs, optimizing operations, and finding new revenue streams. Although GCCs have moved ahead of the cost arbitrage play, they continue to enable higher value at lower costs. Thus they are in a great position to lead the way by implementing solutions that will help the enterprises do more with less.

Many organizations, for example, continue to operate legacy system environments with outdated functionality. This affects process efficiency and creation of data-driven business insights. GCCs will play a significant role in replacing legacy with next generation cloud-based platforms.

2023 will also see GCCs accelerate the adoption of automation to reduce manual, repetitive tasks and unlock time for more valuable, creative work. Additionally, projects with shorter time-to-value will be prioritized over longer-term projects.

Intentionally, hybrid

During the crisis caused by the COVID-19 pandemic, GCCs have strengthened its role as a key pillar of organizational resilience. Despite employees working remotely, most GCCs were able to achieve pre-pandemic levels of productivity within days.

In 2023, GCCs will reiterate the value of in-person connections and start reshaping the narrative around workspaces. It’s not about arbitrarily getting people back into their seats, it’s about fostering a community of people, united under a similar purpose.

As GCCs evaluate their hybrid strategy, traditional workspaces have become a thing of the past. Modern workspaces will be designated as innovation hubs, and focus on enhancing employee engagement, elevating the output over remote work, and attracting the best talent irrespective of location.

Recruiting to retain

Difficult hiring has been the talent story of the last few years. As the pandemic accelerated the digital adoption agenda for every organization, demand for digital talent has quickly outpaced supply.

In 2023, more GCCs will turn to ‘intelligent recruiting,’ leveraging AI and big data to empower HR professionals with actionable insights that allow them to attract talent more efficiently and effectively. Intelligent recruiting will speed up the hiring process, save time and money by automating repetitive tasks, and even predict candidates’ future success in the job and risk of turnover. However, the most exciting impact is eliminating unconscious bias when assessing candidates, which will provide a more diverse and inclusive workforce for an organization.

GCCs will place greater focus on retaining top talent due to the higher degree of difficulty they face attracting new talent. Today’s workforce want their employers to help them grow and develop, and the onus is on companies to provide robust L&D programs that offer multiple career pathing options to its employees. In a poll conducted by ANSR, 64% of the GCC leaders who voted picked ‘career path and growth’ as a means to retain talent, which means L&D programs will remain a key priority this year as well.

Innovation in the DNA

In the last 3-5 years, innovation at GCCs has become mainstream and committed innovators are deploying a wide array of capabilities to propel innovation. With access to leading talent in India, GCCs have taken up a larger role in driving the HQ’s innovation agenda.

Nowadays, GCCs can support a range of critical business goals. They serve as ‘centers of excellence’ specializing in areas like data analytics. AI, ML, RPA, IoT and Blockchain. As companies increasingly realize that skills and innovation can traverse geographic boundaries, and diversity in leadership has a positive impact on innovation, they are leaning on their GCC teams more and more to lead innovation efforts.

Innovation will continue to be the order of the day for GCCs. 2023 will see more and more GCCs partnering with startups and academia to access newer technologies and stay on top of the innovation game. We will see increased adoption of collaboration models such as innovation labs, start-up incubators, hackathons and funding start-ups. Meanwhile, intrapreneurship programs will allow employees to act like an entrepreneur within the GCC to solve enterprise’s business problem with innovative products and solutions.