'Cultural integration, regulatory compliance top challenges for new GCCs'

New global capability centre (GCC) entrants in India face top challenges like cultural integration (84 per cent) and regulatory compliance (55 per cent). These require them to invest in cultural training programmes, empower local leadership, and establish robust compliance frameworks, according to a new study commissioned by CaptiveAide, a consulting services provider, in collaboration with research firm Feedback Insights.

“Cultural nuances, language barriers, and differing work practices can become hurdles, impeding collaboration and cohesion within the organisational ecosystem,” the report stated.

Given India’s robust legal system, the report highlights the imperative for organisations to prioritise regulatory diligence and engage in competent legal counsel to navigate the intricacies of the Indian regulatory landscape.

To address some of these challenges, 62 per cent of large companies (over $500 million in revenue) prioritise partners with robust compliance frameworks to navigate regulatory nuances and ensure adherence to local laws.

Around 48 per cent of the GCCs look for strong local leaders with cultural fluency, industry experience, and strategic acumen to drive operational success.

The study, titled ‘Back to the Future: What You Didn't Know About Setting Up a Successful GCC in India – Today,’ surveyed 255 GCC leaders of companies headquartered in the US and UK.

The allure of India remains strong among these executives, with cost savings consistently ranked as a top driver for establishing GCCs in India (cited by 57 per cent of respondents) followed by access to a deep talent pool (52 per cent).

“The GCC landscape in India is evolving rapidly,” said Chandramouli Srinivasan, chief executive officer (CEO) at Feedback Insights.

He added, “While the opportunities are immense, organisations need to be aware of the complexities and proactively address them to ensure success. Our study provides valuable insights and recommendations to guide companies in making informed decisions and building sustainable GCC operations in India.”

The study revealed distinct preferences in entry strategies, with 46 per cent of respondents opting for joint ventures.

Additionally, 34 per cent of companies sought assistance from specialised firms with local expertise to navigate the complexities of market entry, regulatory compliance, talent acquisition, and operational excellence.

The study specifically sought to understand the current challenges and opportunities facing GCCs considering recent changes such as evolving work environments and changing employee expectations.

Over the years, GCCs in India have come a long way from handling routine tasks like customer service or IT support for cost savings. They are taking on complex projects like developing new products, conducting research, and driving innovation for their parent companies.

Today, many GCCs are like a mini version of the company's headquarters but with access to specialised talent and resources.

India had over 1,580 GCCs as of 2023, with multiple new GCCs added every quarter.

Several factors, such as access to a wide pool of digitally-skilled talent, the drive to adopt new technologies, and the imperative to make a greater customer impact are driving the growth of GCCs in the country.