How to Setup a Global Capability Center Overseas: A Complete Guide

Overseas Global Capability Center Setup Playbook (HQ-First View)

Setting up a GCC is a complex multi-factor problem involving cost, talent quality, time zone, and risk. The following phases map out the plan for executive decision-makers.

PHASE 1: Figure Out If a GCC Is the Right Move

Step 1: Figure Out the Primary Goal

Pin down if the primary goal is cost arbitrage or finding specialized talent in AI, data science, and cloud architecture that is hard to come by in home markets.

In doing this, decide if the GCC will start out as a Center of Excellence that owns products and P&L, or merely supports execution as a back-office utility typical of a GCC as a service model.

• Map out functions suitable for captive delivery, verifying sensitive IP and central product development stay within the corporate firewall to keep down risk.
• Pick out high-context high-value work that must stick close to HQ initially to ward off the context gap that often ends up in product failure for remote teams.
• Lay out success metrics that move beyond simple headcount growth to prioritize abilities deployed and innovation generated when you set up your GCC.

Step 2: Draw Up the Business Case

Work out the total costs noting that while India gives 30 to 40% savings and Poland 40 to 50% wages in big cities can go up quickly for digital jobs.

Weigh up the 6 to 12 month timeline and high costs of owning your and setting up your global capability center against the fast and weeks long start possible with an Employer of Record (EOR) mode or GCC as a service model.

• Count in productivity risks knowing that many GCCs do not bring in the expected profit in the first 2 to 3 years because of early pushback.
• Run through money models for bad times including the impact of people quitting which can go over 20% in busy markets like Bangalore.
• Plan ahead for exit choices by looking into political risks such as being close to conflicts in Eastern Europe or safety concerns in parts of Mexico when setting up your GCC.

PHASE 2: Draw Up the GCC Operating Model

Step 3: Settle on the Ownership Model

Pick the GCC model or option that fits the risk you can handle - a totally owned branch for full control or a Build Operate Transfer model to hold back risk at first or an EOR for speed.

Settle on how you view profits noting that half of the best GCCs now hold onto ownership for big products turning them from cost centers into money makers in your global capability center setup.

• Set out who does the hiring making sure leaders like the VP of Engineering work out of the GCC to show the center has real power.
• Set up clear ways to sort out conflict between home and overseas teams warding off a toxic Us vs Them feeling.
• Let local leaders deal with local HR and vendor contracts to stave off delays.

Step 4: Lay Out the Scope of Work

Start off with established teams for the first wave such as Customer Experience (CX) in the Philippines because of their good English and cultural fit.

Move away from just taking orders to owning results early as teams treated as helpers often quit more and do worse work. In doing so you need to make sure that your teams in your global capability center setup:

• Steer clear of handing off small or confusing work without a connecting team as deep inside knowledge of old systems is tough to pass on remotely.
• Break down work by business results rather than tasks giving the GCC team total duty for specific product parts.
• Lay out specific success goals per team such as speed of software releases or solving customer calls on the first try rather than just counting volume.

PHASE 3: Risk, Control and Governance Setup

Step 5: Look Into Country and Concentration Risk

Make sure you check out political and physical dangers such as overcrowded offices in big cities in India or safety worries for staff in Mexico.

Stay away from relying on just one city by using a main place with smaller branches using smaller cities for safety and lower costs. To deal with this your global capability center setup can:

• Come up with a follow the sun model with backup locations to guarantee business keeps running 24/7 and protects against local problems.
• Check up on data privacy rules carefully from strict laws in Poland to laws in the Philippines that can lead to jail time for mistakes.
• Stick to the risk levels your board allows regarding labor laws such as mandatory profit sharing in Mexico or strict firing rules in the Philippines.

Step 6: Set Up Governance and Controls

Bring in a dedicated leader at HQ and a local leader to speak up for the GCC as a service provider or your owned GCC and stop it from being treated like an outside vendor.

Put in place strict pricing documents to guarantee fair pricing and ward off fines that can be high in places like Poland. But to handle this better you need to make sure your GCC as a service providers and you:

• Set up a group including Legal and HR to look after complex rules like tax benefits in India or trade programs in Mexico.
• Clear up who decides what to stop bottlenecks making sure local leaders have the freedom to hire fast in busy markets.
• Line up performance goals to skills used rather than just headcount preparing for a future where AI separates revenue growth from the number of staff.

PHASE 4: Talent and Coordination Planning

Step 7: Talent Strategy Definition

Deal with the shortage of experienced leaders in India by planning to pay more for people with 8 to 15 years of experience or allotting money into training and development programs.

Keep up a hiring standard equal to HQ using the high quality engineering talent in Poland known for challenging technical decisions but in doing so you need to make sure that your global capability center setup can:

• Build up local leaders who can handle culture differences such as in Mexico where employees might hold back on challenging their bosses.
• Send staff back and forth between HQ and the GCC or GCC as a service provider to build trust and pass on context and break down the feeling that they are outsiders.
• Rely on ways to keep staff beyond just salary such as paying for advanced degrees which are highly valued by younger people in India and Mexico.

Step 8: Coordination With HQ Teams

Draw up communication norms that account for cultural differences in your global capability center setup such as the direct style in Poland versus the indirect style in the Philippines.

Work with time zones - use Mexico for real time collaboration with the US while using India for overnight work. In doing so make sure that you:

• Steer clear of models where the GCC only takes orders - instead build products together to create a sense of ownership.
• Insist on overlap hours for meetings to make sure remote teams feel part of the main operation especially in regions with large time differences.
• Roll out the same ID badges for everyone to make sure GCC employees or GCC as a service providers are treated as full team members rather than outsiders.

PHASE 5: Transition, Ramp-Up and Stabilization

Step 9: Transition and Knowledge Transfer

Carry out the transition or global capability center setup in waves starting with less important items to test processes before moving the main business work.

Go with a watch and own and improve method where GCC staff start by watching HQ staff to pick up inside knowledge effectively.

• Keep track of work by results and value delivered avoiding the problem of just counting tickets or hours.
• Pick up unwritten knowledge early to ward off the gaps that happen when teams understand the technical parts but not the business reason.
• Keep running both HQ and GCC systems at the same time for a while to prove accuracy and build trust.

Step 10: Measure, Adjust and Grow

Keep an eye on actual results against the plan adjusting for hidden costs like more people quitting than expected or compliance costs.

Look out for skill gaps early such as a lack of specific knowledge and jump in right away with training or hiring when setting up your global capability center.

• Switch up your plan if locations get too full - consider branching out to small university towns to tap into fresh talent.
• Carry out regular reviews every few months to point out and sort out cultural conflicts or slowdowns before they become big problems.
• Look ahead to the next phase of growth including using AI to increase output hugely without hiring a lot more people to grow your GCC.

Key Overseas Considerations

• Control vs trust balance: Too much HQ control slows down output and creates bottlenecks - too little brings about compliance and quality risk.
• Attrition reality: Count on higher churn (20%+) in the first 18 months, especially when setting up GCCs in competitive hubs like Bangalore and Warsaw.
• Leadership depth: Senior local leadership is the strongest predictor of long-term success - a fly-in, fly-out expat model rarely works out.
• Patience threshold: Wait for 12-18 months before real value shows up as the vendor mindset takes time to break down and trust is built.
• Optionality: Design for change, not permanence - regulations and labor markets change, so your GCC structure or GCC as a service model must be flexible.

Team Up With Entrans for a Future-Proof GCC Setup

Setting up a Global Capability Center can seem like a big risky move!

But when you partner with a GCC partner like Entrans, you cut down your global capability center setup time and risk profile, verifying you get through the legal, cultural, and operational labyrinths effectively.

We take care of the complex orchestration of legal entity setup, talent acquisition, and governance modeling. But more importantly, make sure you tap into the important value of your overseas center faster without giving up control or quality.

‍Don't let operational delay hold your global plan back!

Set up a free consultation with our GCC experts today to map out your expansion.