Who Gets To Decide Where To Draw The Line Between 'Global Capability Centers' And Traditional Outsourcing?

A center that takes instructions supplies capacity, while one that owns outcomes builds an organization that knows how to do the work. India now counts 2,117 global capability centers, according to Nasscom and Zinnov. They employ about 2.36 million people and generate an estimated $98.4 billion in revenue. The label now covers captive subsidiaries, shared services, and outsourcing arrangements that share little beyond a location. But a technical leader weighing where to build an engineering team needs a sharper test than the name on the door. The useful questions are who decides what the team builds, who answers for the results, and whether the center develops its people or only fills seats.

Reshma Kumar, Associate Manager of Talent Acquisition, Finance & Tech CoE at dentsu, leads hiring for the company's Finance and Technology Global Capability Center in India and manages a team of recruiters and sourcers. She started at dentsu as an HR advisor and helped build the hiring infrastructure as the organization scaled from about 100 to more than 700 people. In 12 years in talent acquisition, she has watched the model change names from shared service to captive unit to GCC. Her test for a real center starts with who holds the authority.

"Right now every single thing is becoming a GCC. Even if it's an outsourcing, it's becoming a GCC, which it ultimately isn't," Kumar says. A leader who accepts the label at face value may be buying execution capacity while assuming the center has judgment of its own.

A newer name for an older model

Kumar sees the GCC as "just a fancier word" that has entered common use over the past two to three years for work companies have long done through shared services, captive units, and outsourced centers in other countries. The new name carries a promise the old ones didn't. A capacity center, she says, "can bring a lot more accountability and ownership," which she credits for the term's popularity over the older vocabulary.

That promise gets diluted as the label spreads. Sub-vending work to a provider and calling the result a GCC "isn't actually a GCC setup," she argues. Supplying people to someone else's project is plug-in work, and plug-in work "is something that's not a GCC."

Ownership decides what a center can do

In the older shared-service arrangements Kumar describes, control stayed with leadership in the US or UK. Local teams were asked to take accountability without the authority to match. "Even to set up a team or to set up a system in India, they have to go back and get a lot of approvals," she says. A genuine GCC gives the local team the standing to decide how to build and grow. The same logic applies to retention on distributed engineering teams, where engineers who own a system tend to stay longer.

Local leaders also know things headquarters has to guess at. "We know what kind of skill they come up with, what kind of notice period they have, what kind of profitability can I make when I hire this person," Kumar explains. She adds that a center also needs enough understanding of the global organization to hold those conversations with leadership.

Short-term capacity and lasting teams need different hiring

Kumar starts a build-or-buy decision by working out how much the business expects to scale each year and what that growth will cost. She then sits with the business to test the assumptions. If the need is to hire and plug in, "I can just go for the third party," she says. A team meant to fix something lasting has to be hired and owned. "You can't just do a plugin and then finish, and after this issue is done, I'll just ask you to leave," she adds.

Other GCC builders argue that a center's size should follow the value it delivers. Kumar applies similar logic to sequencing. Senior people set strategy and review the work, and the lower levels carry it out, so "I will hire the top management first," she says. She checks for internal candidates before going to market.

Hiring for the growth a company can support

On a recent technology hiring effort covering about 60 roles, Kumar planned for nine or ten junior hires. She split them into two groups, four strong candidates ready to deploy and five who were ready to be trained first. "I do mix and match," she says. She prefers to experiment with that balance because "every person is useful in certain levels."

The reasoning comes back to accountability. A cohort of ready-made talent creates an obligation the employer has to meet. "I have to first be answerable for their growth, because it's on our accountability that they're coming," Kumar says. She also weighs how stable the organization's trajectory is. An employer that looks profitable today can turn quickly. She says "with just one turn it can even go down," which would leave a team of ready-to-deploy hires with no room to move up.

When someone proves a poor fit for a role, she prefers training and guidance over replacement. If a person's skills suit another team, she can recommend them there. "There's always an alternative that comes," Kumar says.

Each of her hiring choices aims at keeping capability inside the company. A center earns the name by keeping the people and judgment it builds, and that gives a technical leader a way to evaluate any partner or plan: who holds the authority, which hires the company can realistically grow, and what remains once the first project ends. Kumar prefers "a mix of people in the team" who can deliver now and grow into more, so that "we're not losing anybody."