ChatGCC: The GCC Advantage, From Cost Arbitrage to Strategic Capability

Executive Perspectives. Global Strategy. — Episode 3

Hosted by Patricia Connolly and Aditya Jayaraman

Backed by SMC Squared and Hexaware

Listen to the Full Episode Here

Read the Full Transcript Here

Key Takeaways

• GCCs began as "captive centers" roughly twenty years ago — low-cost hubs for commodity work. Connolly, working with colleagues at Gartner, helped rename the model "global insourcing centers," which evolved into today's "global capability centers."

• A GCC is a company-owned strategic extension of the parent — the cabin you own at Lake Tahoe versus the hotel you book. Ownership brings emotional connection and responsibility; the hotel is a transaction with a service level.

• Three tells reveal which model you're really running: how employees talk (careers and outcomes vs. projects and deputations), what leadership conversations sound like (roadmaps vs. SLAs and penalties), and how fast decisions get made locally.

• Once companies experience a global team, over 90% convert an underperforming ODC into a GCC rather than insourcing the work back home. Fossil replaced a 300-person vendor team with a 180-person GCC that outperformed it — in eighteen months.

• Culture must be planned, not left to create itself — and the transfer rate is the end KPI. Ecolab Digital Center transitioned its full team of roughly 1,500 people to the parent and has grown to about 2,500.

What Exactly Is a GCC?

After two episodes in more advanced territory — including a hard look at why GCCs struggle and how to avoid failure — Connolly and Jayaraman step back to answer the question: what exactly is a global capability center? The answer turns out to be the story of how an entire industry moved from cost arbitrage to strategic capability and why the distinction between a GCC and an offshore delivery center (ODC) changes everything downstream: the talent you attract, the culture you build, and the work you actually get done.

From Captive Center to Capability Center

Twenty years ago, nobody said "GCC." Companies called them captive centers: low-cost, process-oriented operations built to absorb commodity work — testing, support services — shifted out of large vendor contracts.

Appropriate for the time, Connolly says, but the framing never sat right with her. "The whole idea of what a captive center was, and even the terminology, was something I just didn't like." When she started SMC, she set out to rename the model entirely — working with colleagues at Gartner to coin the term global insourcing centers, which later evolved into the global capability centers the market knows today. The rebrand wasn't cosmetic: she wanted a more value-oriented model and "a more respectful term for the people that were involved."

That evolution in name tracks an evolution in purpose. Today's GCCs are defined by ownership, by their relationship to the parent company, and above all by strategic value — not transactional positioning.

"GCCs by design are created to be very fast and agile — essentially they're providing the jet fuel for critical initiatives like modernization, go-to-market goals, and now, of course, AI integration." — Patricia Connolly

Jayaraman, who came up through the startup ecosystem, immediately recognized the framing: it's exactly how Bay Area startups view India today — jet fuel for product building, UX design, go-to-market, and scaling back-office functions.

The Cabin and the Hotel

To draw the line between a GCC and an ODC, Jayaraman offers an analogy. Imagine you live in the Bay Area and ski Lake Tahoe every season. You have two options: stay at the same hotel each trip, or buy your own cabin. The cabin is an extension of your home — the same wine collection, the same furniture, the same feel. It comes with an emotional connection, and with responsibilities: the mortgage, the taxes, the upkeep. The hotel, however familiar, is a transaction. You expect a level of service, nothing more.

A GCC is the cabin. An ODC is the hotel.

Connolly extends the point: a GCC is a strategic extension of the parent company — its culture, its people, its mission. "It's how people look at working together. It's about the brand. It's about really getting on board with the same set of objectives," she says. "It's a soft, qualitative thing as much as a quantitative thing."

Structurally, the differences show up in three places. First, ownership: GCCs are designed to be owned by the company, not controlled by a third party — these aren't contractors working for you, they are your team, and that ownership extends to the trajectory of your IP and the development of your talent. Second, defining success: Connolly asks every company the same question early — what does success look like? Not just "capture X cost savings," but where are we going, what value are we building, who is accountable for what, and how will we know when we've arrived. Third, one team: the working relationship between headquarters and the GCC is built into the framework from the first communications forward, with the GCC buying in on mission, vision, values, and objectives.

What the Difference Looks Like in Practice

The clearest illustration is Fossil, the Dallas-based international fashion brand. Fossil had handed IT largely to a large global services vendor — a team of roughly 300 — and after a few years felt they had lost control and lost the vision. The billables kept climbing while creativity and working relationships stalled. "The price tag was going up, but the car wasn't driving as well," Connolly says. Over eighteen months, SMC systematically replaced everything the incumbent was doing — standing up a GCC team of 180 people that not only outperformed the 300 contractors it replaced, but did far more for Fossil. Zero to sixty, back to that jet fuel.

And when an ODC isn't working, going backward is rare. Once companies have tasted what a global team can do, over 90% of the time they convert the ODC into a GCC rather than insource the work back home. As Connolly puts it, reflecting on Fossil: "It isn't about the talent not being sufficient in some way. It's totally about the operating model."

Jayaraman offers three tells for which model you're actually running, whatever the sign on the door says.

1. How employees talk: in a GCC, people talk about careers and outcomes — "my team is helping release version 2.3 of this product this quarter" — while in an ODC they talk about projects and deputations.

2. What leadership conversations sound like: GCC leadership asks what outcomes we're driving this quarter and whether we have the capability for next year's roadmap; ODC leadership asks how the SLAs are looking and what the penalties will be.

3. And how fast decisions get made: a GCC sees recurring P1 tickets and decides to modernize the application; an ODC notes the tickets are still within SLA and keeps an eye on it.

"The label says GCC, but the wiring is still vendor. That's exactly why we're seeing more and more companies rethink their GCC model — they want their wiring to actually match the label." — Aditya Jayaraman

Why Culture Must Be Planned

The back half of the conversation returns to the two dimensions that resonated most with listeners after the last episode: culture and talent.

"If you don't plan the culture, the culture will just create itself — and sometimes that's not exactly what you're intending." — Patricia Connolly

Companies spend enormous time and money building brand identity, Connolly notes, and that identity has to transcend into the GCC from the very beginning — through a deliberate communication plan. The champion of the GCC articulates the why from the top, to the GCC and to home-location employees alike, so the new center and the existing organization are "fully married together." Every candidate interviewing for a GCC role should hear the employee value proposition and the vision before they join. And team leaders can't just articulate the plan — they have to live it, through town halls, celebrations, and recognition. Jayaraman compresses it into a formula: inform people, involve them, and through that, inspire them.

The proof case is Ecolab. Its Ecolab Digital Center — now a mature GCC of roughly 2,500 team members — was built with culture designed in from day one, driven by a CIO with strong vision and a deep value for the people component. When the build-operate-transfer moment came, the full team SMC had attracted — roughly 1,500 people — transitioned to the parent organization.

Talent, and the Ultimate KPI

That number matters, because it points to what Connolly calls the end KPI of the whole model: the transfer rate. Retention and talent development get tracked along the way, but whether people actually move to the parent company — and want to — is the clearest measure that the GCC delivered on its promise.

It's also why talent is the sharpest lens on the whole GCC-versus-ODC question. India's best candidates weigh GCCs against startups and service providers, and they're asking three things: What do I get to work on? How close am I to decision-making? Am I building something meaningful? The old allure of big-name employers has faded — which means even lesser-known brands can win top talent if they lead with culture, ownership, and impact. Candidates, Jayaraman notes, are actively vetting GCCs to make sure they're not "ODCs in disguise." How talent responds, he concludes, is one of the clearest signals of whether a GCC is actually delivering on its promised path.

If you're mapping out your own GCC strategy, listen to the series from the beginning — and follow ChatGCC so you don't miss what comes next.

Rethinking your own GCC strategy? Talk to the team at SMC Squared.

Frequently Asked Questions

What is a global capability center (GCC)? A GCC is a company-owned center that operates as a strategic extension of the parent organization. Unlike transactional outsourcing, a GCC shares the parent's culture, mission, and objectives, owns capabilities and IP, and provides the jet fuel for initiatives like modernization, go-to-market acceleration, and AI integration.

How is a GCC different from an offshore delivery center (ODC)? Ownership and intent. An ODC is a contractor-based, vendor-controlled arrangement focused on executing defined tasks against SLAs, driven primarily by cost. A GCC is owned by the company: its people are the company's team, conversations center on outcomes and roadmaps rather than tickets and penalties, and decisions are made locally and quickly.

Can an ODC be converted into a GCC? Yes — and it's the dominant path. Over 90% of the time, companies convert an underperforming ODC into a GCC rather than insourcing the work back home. Fossil made this shift in eighteen months, replacing a 300-person contractor team with a 180-person GCC that outperformed it.

Why does culture matter so much in a GCC? If culture isn't intentionally planned, it creates itself — often not as intended. Successful GCCs extend the parent's brand, values, and mission from the first hire through a deliberate communication plan, so employees feel like a valued part of the parent company rather than contractors.

How is GCC success measured in a build-operate-transfer (BOT) model? The end KPI is the transfer rate — how much of the team transitions to the parent company at ownership change. Ecolab's Digital Center transitioned its full team of roughly 1,500 people and has since grown to about 2,500.

Episode Transcript

Introduction

Patricia Connolly 

Hello and welcome to ChatGCC, where global business leaders share how the world's most effective global capability centers are built and scaled. I'm Patricia Connolly. 

Aditya Jayaraman 

And I'm Adi Jayaraman. 

Patricia Connolly 

In each episode, we explore the strategies, decisions, and real-world experiences shaping the future of GCCs. 

Aditya Jayaraman 

This series is brought to you by Hexavare Technologies and SMC Square, proven strategic partners to organizations building high-impact GCCs. 

Patricia Connolly 

Let's get into it. 

Discussion

Aditya Jayaraman 

Welcome back to the podcast. Pat, where exactly are you today? 

Patricia Connolly 

Yeah, I'm in Minneapolis today in the Northland. Where are you? 

Aditya Jayaraman 

I am in India's commercial capital, Mumbai. Mumbai. 

Patricia Connolly 

Okay. All right. Well, I always like coming to Minneapolis. This is kind of where the whole GCC journey began for us with Target, but it's such a haven for Fortune 500 companies, and it's really a fun business climate. So I'm happy to be here. 

Aditya Jayaraman 

And Minneapolis, in my view, is a beautiful place with all the lakes and Of course, all the tech and all the corporations there. Very, very unique mix. 

Patricia Connolly 

It is. And especially on a June day when it's 72 degrees and sunny versus 40 below, it's a good time to be here. 

Aditya Jayaraman 

Yes, of course. I meant it is a great place during this time of the year. 

Patricia Connolly 

Yeah, good to connect with you. I think it's always interesting to hear where we are because we both are literally around the world. So good check in. Good to be here with you, Adi. 

Aditya Jayaraman 

Likewise, Pat. So last time, in the last episode, we got into some, I would say, relatively uncomfortable territory because we spent quite some time talking about why GCCs fail. And I think we ended on one point, Pat, that our listeners are still grappling with. This idea that GCCs actually end up drifting from their core objective, especially around culture and around ownership. 

Patricia Connolly 

That's absolutely right, Adi. And you know, we talked about getting into more solutions next, but before we do that, I think it might be good to just take a little bit of a step back. we've had a pretty advanced conversation about GCCs, but we're getting some questions, some good questions, and people are definitely asking for some maybe clarifications, especially around what is a GCC, what actually is it? 

Aditya Jayaraman 

That's a fair point, Pat. I think we should spend this episode focusing on that question. What exactly is a GCC? And I would love to see you hear how you define a GCC across what parameters. But before we do that, I just want to say for anyone who missed our last episode, where we actually got into quite some detail about why GCCs fail, including that conversation about culture and ownership transitions. please do go back again and listen, because it sets up a lot of what we will cover in this episode and in the next few episodes.

Patricia Connolly 

That sounds good. So from there, I think we actually, I want to point out, we have a great blog on our site that walks through some of the definitions that would be helpful around GCCs. So I just want to share that. with everyone and invite you to take a look at that. It's on our website at smc2.com. So if you want to go there, if you have questions or want to talk about any of that, please reach out to us. I want to bring this up because it's really based on our own experiences and we want to make this real. This isn't about just textbook what people are saying, but really what are the real experiences and what matters. 

Aditya Jayaraman 

Thanks for that, Pat. The audience, again, that website is smc2.com. Please do bookmark it. There is a lot of relevant material there that can further your understanding of this topic. So Pat, getting back, let's start at the very beginning. So when you describe a GCC, a Global Capability Center, to someone who's never heard the term, how would you frame it? 

Patricia Connolly 

Right, first of all, GCCs weren't always referred to by this name. Early versions, 20 years ago, companies were calling them captive centers, really focused on low-cost process- orientated work, you know, shifts from large vendors into a center that was created to do kind of commodity-level work, testing, support services, that kind of thing, which was great and appropriate at that time. time. But honestly, the whole idea of what a captive center was and even the terminology was something I just didn't like. Really wanted to start with a fresh renaming view when we started SMC. So in talking with others, especially colleagues at Gartner, we came up with the term global insourcing centers. And that later grew and shifted into global capability centers. So the whole naming thing seems to have caught on. 

Aditya Jayaraman 

So wait, so you had a hand in rebranding this whole global trend, global insourcing centers, and then finally global capability centers? 

Patricia Connolly 

Yes, that's true. I really wanted to shift the way the market was talking about these centers and moving it to not only just a more value-oriented model, but I also wanted a more respectful term for the people that were involved. And the terminology of a captive center just didn't work for me. So the question of what GCCs are today. Typically, we look at ownership, we look at the parent company, the relationship to the center that's being created. We also really think about the strategic value of that center. So GCCs today aren't about just transactional positioning. They have broader capabilities and have a lot of influence on the trajectory of the objectives of the organization. We also see that clearly employees really fuel those capabilities. It's not just about cost arbitrage, putting people in seat, doing specific tasks. It's really about how the organization is moving forward. And the GCCs by design, are created and moving to be very fast and agile. Essentially, they're providing the jet fuel for critical initiatives like modernization and go-to-market goals, and now, of course, AI integration. So it's pretty exciting to see where this has come from, not just the name, but really where it's come to over the course of two decades and now where we're at today. 

Aditya Jayaraman 

Jet fuel for critical internal business initiatives. I love that framing. I want our audience to chew on that a little bit. Because having come from the startup ecosystem, Pat, I can tell you that that's exactly how Bay Area startups view India today. as being that jet fuel for product building or UX design or go to market or scaling back office functions and so on. So that's a very, very appropriate theme. And I can see that commonality between startups and GCCs, jet fuel. Fantastic. So, but having said that, I think you've covered what is a GCC? But I think we should draw out the distinction between a GCC and an outsourcing agreement in the form of an offshore delivery center, an ODC. I want to hazard an analogy, a viewpoint on how that is. So here's what I'm going to say. Imagine living in the Bay Area, Pat, and frequenting Lake Tahoe for skiing. Now you have two options there, yeah? You can either stay at the same hotel each time you visit Lake Tahoe, or you can just go ahead and buy your own cottage there. The question really is, how would you think about either property? So if it's my own cabin, I'm going to treat it as an extension of my home. I want the same kind of look and feel that I get at home, you know, that same wine collection pat. the same kind of bed, same kind of furniture. So my point is the key notion is 1 of ownership. It's an emotional connection, you see. Now contrast that with the other option, which is to, you know, the same hotel every time. So, The maximum I would do is exactly that. I pick up one hotel and keep going to it every time and ask for the same kind of room every time and so on. But in that, my expectation is one of a level of service. And my whole notion around that is one of a transaction, a utility. Therefore, I would love your comments on this. I just feel that in either case, the perspectives and the approaches and the emotions are entirely different. And I feel it's the same with a GCC versus an outsourcing provider. The GCC is like that cabin I bought in Lake Tahoe. An outsourcing provider is like that hotel I use with an expectation of a service level coming, right? I'd love to hear your thought on this, but I want to add just one more point there. I'd be remiss if I missed this out. With ownership of that cabin comes a slew of other responsibilities as well. That's like, you know, it's like mortgage, it's like tax reporting, it's upkeep, and so on. Now in GCC parlance, that is really about the investment you have to make in the GCC in order to nurture it. Yeah. So there are obvious benefits, but there are responsibilities as well. Let me pause there and let me hear what you make of that analogy. 

Patricia Connolly 

I like the story about Tahoe and how you look at that experience. I think that's a good analogy, Radi, really good. The main thing when I'm talking with companies about a GCC and setting it up and how this looks different than maybe an ODC or a contractual arrangement they have is that we're really talking about setting up an extension of them. It's A strategic extension of the parent company. But it's about the culture, it's about the people, it's about the mission, and it's an infused conversation. And I think companies that are really thinking about this heartily understand that it's more than what it looks like on paper, it's how people look at working together. It's about the brand. It's about really getting on board with the same set of objectives. And that's a very big deal. It's a soft, qualitative thing as much as a quantitative thing. 

Aditya Jayaraman 

So what I heard you say in that, Pat, is just like that cabin I own in Tahoe is an extension of my home, so also a GCC is literally a cultural a values extension of the parent company. And I feel that distinction matters a lot because it changes everything downstream. It changes the way you look at talent, the way you attract talent, the culture you build, and most importantly, the work that you actually get done out of that GCC. Would you agree with that? 

Patricia Connolly 

Yep, I absolutely would. 

Aditya Jayaraman 

Great. So then, Pat, let's continue down this path, yeah? Because I want to take this comparison of this GCC versus the ODC, the cabin versus the hotel, down to some operational parameters, operational dimensions. So could you talk, Pat, about some of the structural differences between a GCC and an ODC? 

Patricia Connolly 

Yeah, absolutely, sure. Let's go down that path. So one of the very first things that we end up talking about with companies is the ownership model. Generally, GCCs are designed to be owned by the company versus a third party or a vendor owning and controlling everything. It's really their team. So thinking about ownership, you know, legally and in terms of how management will interact with the team is very, very important. How you get to actual legal entity ownership can happen in different ways and at different times. But this whole, let's call it the whole framework of ownership, that you're not looking at this as a center that is a group of contractors working for you. They are your team, essentially. So that's really key. That's super important. Make sense?

 

Aditya Jayaraman 

So yeah, no, totally pipe. That makes sense. Ownership, Operational ownership, complete ownership, makes a lot of sense. It, in fact, it makes that analogy that I just articulated even clearer in my mind. Yeah, so, yes, OK. 

Patricia Connolly 

Good, I think that's a sought after aspect. That isn't something that turns people away. They would prefer that for their company and they are looking for that. So they're looking to, yes, control the trajectory of their IP, very important for most companies, but also talent and developing talent is very important. They're thinking about the operational structure, how the overall organization is going to interact on a global basis. So that whole strategic picture really becomes part of the discussion when they consider a GCC. And they're typically companies are leaning into this question. This is what they want to do. They want to break this down and really exercise it. Along with that becomes this question of, well, how do you define success? I'll be honest, I ask that question A lot. I think one of the early challenges is wanting and seeing a vision, but I really think it's important to define what success looks like. And then who's responsible for what? are the accountabilities? How are you going to know when you've arrived? All of these things are very important to try to capture and define upfront, in my humble opinion. So it isn't all about hey, we want to capture X cost savings. To me, it's a lot about where are we going and defining that and what value are we building for the company. And last, it's really a very important part about how we work together. Our aim is to develop a working relationship across teams between sometimes multiple headquarters locations and the GCC. So from the beginning that the GCC is not just working with the same set of values and thinking about culture, but are we on track building a GCC that's built into the framework and buying in on mission, vision, values, and objectives? I like to use the phrase one team. Are we working together as one team? And really framing it that way from the initial communications on forward. 

Aditya Jayaraman 

But can you let me, I want to step in here and ask you, Can you bring this whole thing to life through an example? Because I understand all the points you made, but I just feel I want to see it through an example. 

Patricia Connolly 

Yeah, there are many examples, but I'm going to pick one that kind of articulates this pretty clearly. So an organization that we got introduced to in Dallas, some of you may know, a company called Fossil, international brand manufacturing and selling fashion goods globally, really a great brand. They were very engaged with a large global IT services vendor and had I'm going to use this phrase kind of carefully, but they pretty much, gave them charge of everything. they were running IT for Fossil. And they put in place a sizable team, a 300 person and were working with Fossil for a few years. And Fossil was really having a difficult time because they felt like they had lost control, had lost the vision of what they were doing. They weren't getting the, not just the productivity, but really the creativeness, the working relationships were not there. And the billables became far more than what Fossil had originally assumed. So the price tag was going up, but the car wasn't driving as well. Anyway, so they came to us and started talking about, what is a GCC and what does that look like? And they were brand new in the conversation. Over the course of 18 months, we systematically replaced everything that was being done by the incumbent IT services company. We brought in a lot of process improvements and innovation thinking and basically stood up a team of 180 people that not only performed better, than the 300 that were in place as contractors, but really did so much more for Fossil. And they were astounded that it actually only took 18 months. I think it was a working win for them, for sure. It started as a test and it proved over and over again to be an extraordinary example of what a GCC could look like. of taking a company from zero to 60, back to that jet fuel. It really went well. 

Aditya Jayaraman 

Awesome. So you had talked about ownership, about how a GCC, what is central to it is the complete ownership. That seems to have played a key part in this, what should I call it, in this turnaround of the center. And then what also seems to jump out to me in what you said, Pat, is that in so doing, the ability to extend Fossil's mission, vision, values, and finally translate all that into working together as one team, all the points that you made, they all seem to have come together, converged, and in a very rapid time, helped Fossil achieve its objectives. 

Patricia Connolly 

That's right. Really tremendous success. But you know, Adi, when we think about this, even today, we're being asked to assist and come in with kind of a maturity observation assessment for companies that have ODCs or even even GCCs, as you say, that have drifted. So we're able to enter into that conversation on both a practical level and a strategic level to help companies kind of sort out what do they have that's working and what's not, and where do you go from there. 

Aditya Jayaraman 

Makes sense, Pat. And as you were saying this, thought just entered my mind. So when you have an ODC that is not quite working, it is Interesting. I would assume that the parent has two choices. One is try and go from ODC into a GCC. The other could well be, you know, just insource everything back from the ODC into the parent company in the parent country. Are those the, are those two equivalent options, Pat, in your view? 

Patricia Connolly 

Interesting question. Well, I think I think once you've gone the direction of utilizing a global team and got in a taste of the possibility, it is difficult to go back to insourcing into your home team. There's many reasons. So we are seeing more activity where companies are really taking the hard question of evaluating it and making that shift from more of a contractual ODC kind of relationship into something that's a healthier and more robust GCC. So I would say over 90% of the time, that's the track that we're hearing about and seeing companies go. 

Aditya Jayaraman 

That's the track, okay, because you anyway have got used to the benefits of working with that kind of a facility. So might as well just amplify those while retaining the core characteristics by making it a GCC, making it fully operational, and infusing your vision and values and work systems into that. That makes sense. I can see that. 

Patricia Connolly 

Yeah, I'm recalling something that we talked about quite a bit with Fossil. It isn't about the talent not being sufficient in some way. It's totally about the operating model. And I think that rings true in many of our more recent conversations also. 

Aditya Jayaraman 

Got it, got it, got it, got it. So since you brought that up, I'd like to give you my view of the differentiation between GCC and ODC pattern. So, I would say I look at it on 3 aspects: firstly, how employees feel about working for one versus the other, for the GCC versus the ODC. The second thing is, what do... leadership conversations look like in either option? And then thirdly, how does decision-making speed and how does ownership, how do these two things look? So very quickly, I posit, Pat, that in a GCC, people actually talk about careers, whereas in an ODC, they would talk more often than not about projects and deputations and which customer and so on. So literally, that would sound like, in a GCC, it would sound like, my team is, let's say, helping release version 2.3 of this product for this quarter so that we can consolidate our position in existing customers. That is something I would likely hear in a GCC, whereas in an ODC, it would be more of, I am doing an Oracle upgrade project for this particular customer right now. Yeah. The second point is about leadership conversations. And in the GCC, that's more likely to sound like, what outcomes are we driving this quarter? Do we have the capability for the roadmap that is envisaged for next year? Do we have the capability to deliver to that roadmap? In other words, I would say it's forward-looking, it's strategic, and so on. That is, In an ODC, I feel it tends to be more operational. They're probably going to say, you know, the leadership is going to basically tell you, Pat, hey, how are my SLAs looking? How many have I flouted? What are my penalties likely to be? Are we staffed appropriately? So conversations, the preponderance of conversations is more around operations. I'm not passing any value judgment. I'm not saying one is better than the other and so on. But to me, it just seems like this is how the chips fall. These are the facts. The last part, the third one, as I was mentioning, was a decision making, the speed of decision making, basically, Pat, and ownership. Yeah. So in a GCC, given that it's legal owner, I'm sorry, local ownership, you would probably say, hey, this custom application is creating far too many production issues and P1 tickets. So why don't we look at modernizing it so that we can completely, eliminate or lower all those tickets and issues? The same conversation in an ODC would likely be, P1 tickets have increased, but we are within, let's say, the SLAs and the resolution times, and let's keep an eye on that and make sure it stays that way. So this is what I feel, Pat, is, in my, This is how I relate to the difference between a GDCN, a GCCN and an ODC. What do you think? 

Patricia Connolly 

Yep, I think you laid that out well. It really also... gets to how do the people that are working, either on that account or in that GCC, how do they view their personal contribution, and how are they incented? And I think that's where GCCs really shine, because they're part of the team, they're part of the fabric of the organization. So we're no longer talking about only tickets or SLAs or KPIs, they're talking about contribution. They're talking about that personal level of ownership, which is pretty powerful stuff. 

Aditya Jayaraman 

It's interesting to say that because I think in the last episode, I'd mentioned speaking with a leader, a GCC leader who's leaving because the GCC was not seemingly shaping up the right way. Yeah, but so Imagine, I was just thinking, imagine your GCC having an objective of accelerating product delivery, yeah, of the latest products. But then the conversations around those three questions that we laid out are looking and feeling more like ODCs. Then the basic question would be, that I would have would be, how are you delivering to your strategic intent if the thinking and the mindset and the culture is all at the opposite end of the spectrum. 

Patricia Connolly 

Yeah. Operationally, it gets to that drift question where companies may have drifted back or leadership may not have been as wise to guide and they end up performing more like an ODC, even if they are a GCC. And then the whole people and culture thing tends to follow. 

Aditya Jayaraman 

Right. So the label says GCC, but the wiring is still vendor. Yeah. And I honestly think, Pat, that's exactly why we're seeing more and more companies rethink their GCC model. They want their wiring to actually match the label. 

Patricia Connolly 

Yeah, that's very true. You know, another thing that we haven't talked about, and we should at some point, is really, you know, leadership in the GCC. Because the tone from the top is very important. Typically, the GCCs have a managing director or some site leader or technical leader that is guiding the GCC trajectory. And that individual needs to have the right perspective on what their role is. and how they want to form that team and organization. So that's important too. So leadership dimensions might be a future subject for us. 

Aditya Jayaraman 

Definitely. We should cover that. Before leadership, we should probably, we will be doing it justice only when we dedicate a complete episode to it. But just picking up on that, so we've talked about structural and operational differences. You mentioned leadership. But I think We should, for the rest of this episode, Pat, I would like to focus on the two crucial dimensions, one of culture and the other of talent. Now, we briefly touched upon these in the previous episode, and they did resonate with our listeners. So how about we dive a tad deeper here? 

Patricia Connolly 

Yeah, let's do that. I think that's a tremendous point. So we've talked about in some senses why GCCs could fail and culture really stands as this contributor to long-term success. Whether the organization is thinking about that from the beginning or not, I think we need to bring out, we need to underline this. So many times we're asked, you know, What does that look like? What does great look like when we're asked about cultivating a culture? So first off, I would go to companies spend a lot of time and a lot of money building brand identity. And they really work to instill that. They work to instill that from a customer's viewpoint, but also an employee's viewpoint. And I think that needs to transcend into the GCC right from the very beginning. The communication plan needs to address this and the employees, the people that are working in the GCC, they need to feel like they work for that parent company as a valued part of the team. And that sets the whole thing off in the right trajectory from the beginning. And then we kind of talk about productivity and quality. When people are taking ownership, which we just touched on, they act as part of the team. They contribute as part of the team. There's a camaraderie and a fellowship that happens, and you're driving for the best performance, not just to check the box or get the deadline done. It's really about overall quality. I think that's the way I would sum that up. And then again, touching on leadership development, so important. But one aspect of this that is worth drawing out is that companies are growing leaders now from within a GCC. And they're doing so very deliberately and emphatically so that future leaders can sit at the global table and have input into the overall strategy. So it's not just a receiving of strategic intent, it's actually contributing to it. Those are all aspects that I think a good culture, a very thriving culture connects to. You know, we talk about real case studies and I just wanted to bring up some storyline around one of our clients, Ecolab. And they did this extremely well. I would say even before we got to start talking with them, they were thinking about What does culture look like for what they end up building with us? It's called their Ecolab Digital Center. And this is a mature GCC now. They're actually at about 2,500 team members. We really got involved with their CIO, who is an incredible leader with strong vision and obviously a really strong value for what the people component of this meant to his organization. So with the GCC, they were really on path to create a digital center driving business new products, new services, and growing a world-class global technology hub. There's no question about it. They had a very strong viewpoint on what the value, what the business drivers were. But from a culture perspective, they really knocked this out of the park from the very beginning. And I would love to call out, you know, we were part of it, but the company really had a strong view on company culture and how they wanted to deliver this right from the beginning. So they had an excellent communication plan and the leaders that we were able to attract for Ecolab Digital Center really carried that forward mission. And when we got to the point of transitioning the build, operate, transfer model, we transitioned a full set of people we had attracted to the Ecolab Digital Center, everybody transitioned forward, which was a great, great accomplishment. 

Aditya Jayaraman 

That's like 1500 people fully transitioned to the parent org. Pat, did I hear that correctly? 

Patricia Connolly 

Yeah, it was it was a huge it was a huge transition, well planned, and you know they just continued to build on that strong foundation and we're really excited to say it's one of them. Great success stories of GCCs. 

Aditya Jayaraman 

Wow, 1,500 people fully transitioned to the parent org. I think one of our episodes should be around that topic. How do you execute something like this? But Pat, I heard a couple of things there I want to go back and double click on, yeah? So the first thing is, it seems to me, like in this case, we've touched upon this the need for that strategic objective to be extremely clear as to why a parent is planning a GCC. It does seem like that was very, very clear in this case, in the case of Ecolab. Did I get that right? 

Patricia Connolly 

Yep, that's right. 

Aditya Jayaraman 

Awesome. Awesome. The second thing I heard you say is You mentioned communications plan a couple of times. And then it seemed to me like the culture is extended from the parent to that GCC, to the newly set up GCC through that communications plan. Could you just explain that a little bit more? What exactly is this communications plan and how is it so pivotal to making sure that The GCC is a literal cultural extension of the parrot. 

Patricia Connolly 

Yeah, that's a good question. And I think this is something that companies need to put work into ahead of time to plan out so that it's executed well. I always say that if you don't plan the culture, the culture will just create itself. And sometimes that's not exactly what you're intending. So a communication plan very clearly comes from the champion of the GCC, the leaders at headquarters, articulating the why. are we doing this? What's important here? And it's important for them to communicate that also to the employees that they have in their home locations. because they don't want to disconnect between what they're building in a GCC, a new part of the organization, and what has been in existence. It needs to be fully baked, fully married together. So that communication from the top is very important. Also, the whole welcome message, why you're here, why this is important, why you should take this position at the GCC. What are you going to be working on? How does this fit in with our objectives? How does this fit into this year's plan and next year's plan? Very important. And then the third thing I would say is even at the team level, management, team leaders, directors, they all need to understand that They need to articulate the plan, the communication plan, but then they also need to live it. And this is done in many different ways. Town halls, team meetings, celebrations, recognitions, all the things that make a good working organization need to transcend, and the GCC team needs to be part of that also. 

Aditya Jayaraman 

So what you're saying, Pat, is that the The reason for the GCC, for going down that GCC path is extremely clear. I'd like to think of it as the esprit de core. Firstly, that's extremely clear. But then most importantly, that is kind of documented and then passed down when you set up the GCC in India, you make sure, it seems that you make sure that every hire in the GCC, starting from the very first one to the very last one, kind of lives and breathes that reason, the values that come as part of that communication plan. Did I get that correctly? 

Patricia Connolly 

Yeah, I think that's good. That's really good. So each employee or each candidate even that is interviewing for a position in a GCC, they should know, they should know what the employee value prop is. They should get a briefing on the company. They should hear about, you know, what's the vision here. to really read them in early. It's as much about attracting great talent as it is selling what this GCC is going to be, and we'd like you to be a part of it. 

Aditya Jayaraman 

Just hearing you say that, I was reminded of this thing, right? I always think of it firstly as you inform people, and then you involve them, and through that, you inspire them. So... It seemed that was a strong parallel that just jumped into my mind as you described that. 

Patricia Connolly 

Yeah, better put than my words. Very good. I like that. 

Aditya Jayaraman 

Yeah. Thank you. Thank you. So I wanted to do one thing now, Pat. So you've spoken so well about how this looks like from the HQ perspective and how it looks like from a plan very well executed. Yeah. So I wanted to answer this same question about the culture and the people and the talent specifically from the other end of that spectrum, which is from the talent pool in India, if that makes sense. Sure. So if you, know this best part, but the talent, good talent, I should say, in the India market has tremendous opportunities. And these opportunities are across GCCs, startups, and the traditional IT and tech service providers. And therefore, this talent looks at all these, let's just call it three different types of opportunities, GCCs, startups, and the service providers. Good talent looks at all of these equivalently. So really, given these choices, The best candidates I would feel are looking at three things. Firstly, what do I get to work on? Then how close am I to decision making? And then lastly and most importantly, am I building something meaningful? So essentially, they're looking for identity and impact in my mind. So one of the thesis I had was that, and I've been seeing a lot of this of late. The earlier in my generation when we got started working, Pat, there was a lot of allure for working for these large name firms. One of the things I see today is that doesn't seem to be the case. People don't mind working for smaller, lesser known firms. And I feel this is where GCCs can really differentiate themselves vis-a-vis service providers and even startups. Because a service provider may offer a variety of projects and technologies and customers and potentially, deployments in various geographies. Whereas GCCs offer that ownership and business impact. And therefore, from the perspective of the candidate, of the talent, the hiring conversation changes from what skills do I have to basically, what am I going to be building here? I feel candidates are asking those questions and they are waiting GCCs to make sure they're not ODCs in disguise. And the last point I want to make here is fact that even for companies that may not be very well known in India, companies and brands that are smaller or they're just not known, I think this is an opportunity. And I feel that if those companies lead, like you said, with a message of culture and ownership and impact, they will be able to get the best talent and therefore build the best capabilities and therefore build their, achieve their objectives. And just to wrap that thought up, I feel each of SMC's clients is testament to this. I personally, Despite having lived in the US for a long time, I didn't know a lot of these logos before. But now to think of the quality of people that I've seen working in each of these GCCs, Pat, and then, of course, those 100% transfer rates. You spoke about moving 1,500 people en masse back to the parent. To me, that is the proof that whatever we've been talking about works. And so How talent responds is one of the clearest signals to me of whether a GCC is actually delivering on its promise path. 

Patricia Connolly 

Yep, that's a good summary. I like that. And I think the end KPI, if you will, for what we do for many companies in this build, operate, transfer is that transition or that transfer rate. We're very proud and we work very hard to get to that place with each of the companies that we work with. But as much as we track talent metrics, retention, especially over the course of time and look at how we're developing people, that transition rate is very, very important to companies and the employees alike. So it's a pretty interesting proposition. 

Aditya Jayaraman 

Absolutely. 

Closing

Patricia Connolly 

So I think we're pretty much at a wrap for today, Adi. I know we could go quite a while in talking about this, but I think we hit on some important points. I do want to just call out for our listeners, if you missed our last episode, we want to make sure that you go back to it, take a listen, and I think it's worthwhile right alongside this conversation. 

Aditya Jayaraman 

So in this episode, we really were keen on establishing how GCCs were different than ODCs. In the next episode, we want to dive deeper into GCCs and their evolution, what they've been doing thus far, and what the opportunities are for them to evolve into the future. So please do join us to see what a GCC in 2030 is most likely going to be looking like. Thank you. 

Patricia Connolly 

That brings us to the end of this episode of Chat GCC. If something we discussed today resonated with your experience or challenge did, we want to hear from you? 

Aditya Jayaraman 

This podcast is shaped by the conversations we have with leaders like you. Your questions, your real-world experiences, and the challenges you're navigating inside your own organization are what drive the topics that Pat and I explored. 

Patricia Connolly 

So if there's a question you'd like us to take on, a story you'd like to share, or a perspective you think our listeners need to hear, please reach out. You can find us along with episode notes and additional resources at smcsquared.com. 

Aditya Jayaraman 

And if today's conversation was useful, please do share it with a colleague who's navigating these same questions. We're building a community of global technology leaders, one conversation at a time, and we'd love for you to be part of it. 

Patricia Connolly 

Chat GCC is brought to you by Hexaware Technologies and SMC Squared, proven strategic partners to global enterprises, building and scaling their GCCs. 

Aditya Jayaraman 

Thank you for joining us. We'll see you next time.