Repositioning the Value Proposition of Global Capability Centers

The much-talked-about “next normal” is already here and much sooner than we had all anticipated. Or perhaps, we’ve swiftly moved away from the traditional wait-and-see mode given the hugely impairing impact of the Covid-19 pandemic on work, the workforce and how and where work gets done. It’s with amazing speed and resiliency that companies cutting across industries, location and size barriers are resolutely navigating the massive paradigm shifts and are charting the new way forward.

In the next normal, every company will be required to quickly transform themselves into a digital business in disguise of their core business. One of the most important considerations will be how companies look at their digital completeness to stay relevant, competitive or even survive in the post-pandemic era. This also means that companies will be required to reimagine their business models and reinvent their digital strategy. This transformation requires more than technology, people and processes. This challenge comes with profound organizational change management that requires creative and unfailing transformation strategies.

Expectations For Digital Transformation

This next phase will set a rigorous agenda and stringent expectations for companies so that they can have an unfailing strategy to implement digital capabilities to realign their business goals. This will require companies to:

Enhance prudency around expense management to make provisions for investments required to accelerate digital formation. This would also spur accelerated adoption of automation of business functions.

Increase investments in employee headcount in areas that will directly impact the digital journey. This includes functions like strategy, planning, architecture and product design and capabilities such as cloud, AI, mobile, data engineering and automation.

Support a hybrid, distributed workforce with investments in processes and technologies in support of the effectiveness of the employees. This will also require reinventing onboarding and training interventions especially as organizations change and restructure themselves.

Accelerate cloud transition and possibly eliminate several on-premise systems.

Embed intelligence in every organizational product, system and process, thereby accelerating the adoption of AI.

The Changing Role Of GCCs

As companies look at aligning with the new emerging business paradigms, Global Capability Centers (GCCs) will have to alter their strategies as well. In the pre-Covid-19 era, GCCs were continuing to evolve and mature, albeit organically to deliver on a value proposition that has included a combination of cost, capability and capacity arbitrage. Well-operated and integrated GCCs were consistently delivering on superior cost, productivity and talent (quality, retention) metrics. However, within months of the pandemic, the traditional value proposition quickly became obsolete.

Further, as companies transformed from centralized manifestations to globally distributed teams, several GCCs have been able to effectively demonstrate the power of GCC-enabled workforce transformation with uninterrupted availability, unfailing business continuity and, in many cases, with significant impact on productivity and business outcomes.

Reimagining The GCC Value Proposition

As companies begin operating in the next normal and as GCCs seamlessly integrate with the extended global enterprise, there’s a strong case for reimagining the traditional value proposition. Here’s how the GCC’s role will change:

#1 Expense Management

Traditional Proposition: Deliver services at costs lower than traditional alternatives (such as outsourcing) or workforces at other homes/business locations.

Next Normal Proposition: Enhance the company’s competitive advantage through better pricing, lower product cost, quality and innovation.

#2 Talent

Traditional Proposition: Hire high-quality talent for the work executed at the GCC.

Next Normal Proposition: Onboard “enterprise talent” with the potential of becoming future global leaders. GCC leaders are enterprise leaders with functional responsibility and accountability for business outcomes at par with home office/HQ leaders.

#3 Service Delivery

Traditional Proposition: Provide high-quality services commensurate with superior/impactful work typically executed at the GCCs.

Next Normal Proposition: Assume ownership and accountability for business functions transitioned to the GCC. Drive/influence key business outcomes including growth, differentiation, innovation, etc.

#4 Capacity

Traditional Proposition: Support the on-time, on-budget delivery of assigned business functions.

Next Normal Proposition: Transform the GCC workforce into a strategic capacity for the enterprise in support of the company’s strategic business priorities.

#5 Capabilities

Traditional Proposition: Support development/expansion of capabilities in emerging business areas.

Next Normal Proposition: Own key, differentiating new business capability narratives and demonstrate business value by underpinning such capabilities into the company’s product and services. Opportunities include cloud, data engineering, AI, info security, RPA, blockchain, etc. Leverage such capability narratives to complete the digital transformation of the company.

#6 Operating Model

Traditional Proposition: Be an extension of the enterprise integrated with a time-tested framework of culture and values and use of consistent enterprise processes.

Next Normal Proposition: Be the enterprise, complete with company leaders, ownership of functions and accountability for business results.

#7 Workforce Transformation

Traditional Proposition: Complement/supplement enterprise workforce with best global talent.

Next Normal Proposition: Collaborate with globally distributed teams, which enable the company to execute any work, any location, any team.

#8 Innovation

Traditional Proposition: Leverage innovation to drive service quality, improve employee engagement and enhance GCC employee value proposition.

Next Normal Proposition: Leverage agility and flexibility at the GCC level, use innovation as a strategic lever to drive the company’s differentiation, competitiveness and relevancy agenda.

GCCs have a “once in a lifetime” opportunity to take on the challenge of reimagining their traditional value proposition to build the escape velocity of helping their host companies into the next normal orbit.