Why GCC Success Metrics Need a Revamp_ _ Zinnov.pdf

1. BRIDGING THE VALUE GAP: WHY GCC
SUCCESS METRICS NEED A REVAMP?
15 Apr, 2024
When Global Capability Centers (GCCs) first emerged on the business
scene, they were all about one thing – cost savings. These early GCCs
delivered immense value by providing access to skilled talent at lower
price points, and they excelled at it. In fact, they were so effective that
“cost arbitrage” quickly became the industry benchmark for measuring
their success.
However, as GCCs have evolved over time, expanding their capabilities
and taking on leadership roles in advanced domains like Analytics and

2. Platform Engineering, the metrics used to gauge their value have failed to
keep pace. Outdated, cost-centric measurements continue to dominate,
obscuring the true extent of GCCs’ contributions and creating a persistent
“Value Gap.”
The problem lies with the outdated yardsticks being used to measure
success. The GCCs in India have undergone a dramatic transformation,
developing robust ecosystems and tackling increasingly complex global
objectives. Yet, the narrow focus on cost savings persists, overshadowing
their more significant contributions.
As a result, a disconnect has emerged between the strategic influence
GCCs have gained and executive perceptions of their worth. This Value
Gap risks leaving massive innovation potential untapped, as the true
capabilities of these centers go unrecognized. GCCs have matured into
hubs of high-value skills, and it’s time to redefine how we quantify their
impact beyond mere cost savings.

3. The Maturation Challenge: Beyond Cost Savings

4. As GCCs mature, the direct cost savings might start to level off or even
decrease in the near term. But this shouldn’t be viewed as a problem.
Instead, it’s a clear indication that these centers are taking on new roles
and expanding their abilities within global companies.
Take innovation and ideation projects within GCCs as a prime example of
this disconnect. These centers have transformed into breeding grounds
for ideas and solutions. However, most GCCs limit tracking the volume of
ideation (number of ideas/PoCs built) but not the efficiency of the
processes or impact of innovation (number of ideas implemented in
product roadmap/number of ideas). As a consequence, the true worth of
GCCs is hidden from view, and their ability to drive strategic growth
remains largely untapped.
Rethinking GCC Success: The Health and Performance
Approach
To close this gap between the actual value GCCs provide and how they’re
perceived, we need to completely rethink what we consider as “VALUE”
when it comes to these centers. It calls for a shift from traditional cost-
centric metrics to a broader understanding.
When we talk about the value of GCCs here, we need to look at two key
aspects: Health and Performance. These two dimensions give us a more
comprehensive picture of how well a GCC is doing and the impact it has
on the organization as a whole.

5. GCC Health:
The concept of Health in a GCC context goes beyond mere operational
metrics to include factors such as employee engagement, culture,
leadership quality, and morale. A healthy GCC is characterized by a
vibrant and supportive work environment, effective communication, and a
shared sense of purpose.
When employees feel valued, empowered, and motivated, they’re more
likely to bring their best ideas to the table and go the extra mile to solve
complex problems. This kind of environment is a breeding ground for
innovation, creativity, and continuous improvement.
Moreover, a healthy GCC is better positioned to attract and retain top
talent. In today’s competitive landscape, skilled professionals are looking
for more than just a paycheck. They want to work in an organization that

6. values their contributions, invests in their growth, and provides
opportunities for meaningful work.
GCC Performance:
Performance, on the other hand, relates to the GCC’s ability to achieve
strategic goals and deliver tangible outcomes. This includes financial
performance, customer satisfaction, quality, and operational efficiency.
A high-performing GCC distinguishes itself through its ability to deliver
services efficiently, exceed customer expectations, and outperform its
peers in key metrics. It’s not just about doing things cheaper, but about
doing them better and faster.
When a GCC consistently delivers strong performance, it demonstrates its
value as a strategic partner to the parent organization. It shows that the
GCC is not just a cost center, but a source of competitive advantage that
can help the company achieve its goals and thrive in the marketplace.
By considering both Health and Performance, we get a more holistic view
of the value GCCs provide. This broader perspective is crucial for making
informed decisions about investments, resource allocation, and strategic
planning.
Leading the Change: How GCC Leadership Can Drive the
GCC Success Metrics Shift?

7. Achieving a balance between Health and Performance in a GCC
requires skilled and strategic leadership. Leaders play a critical role in
steering the center toward success, and this involves much more than just
focusing on cost savings.
GCC leaders need to have a clear vision for the future – one that
recognizes the evolving role of these centers and the untapped potential
they hold. They must be able to look beyond the traditional cost-centric
models and embrace a more holistic approach that values innovation,
agility, and continuous improvement.
Fostering a culture of innovation is a key part of this. Leaders need to
create an environment where employees feel encouraged to think
creatively, take risks, and challenge the status quo. This means providing
the resources, support, and freedom that teams need to experiment with
new ideas and approaches.
At the same time, leaders must ensure that this pursuit of innovation
doesn’t come at the cost of efficiency and performance. They need to
strike a delicate balance, encouraging creativity while also maintaining a
focus on results.
To do this effectively, leaders need to establish clear metrics that reflect
the GCC’s evolving role and contributions. Traditional cost-based
metrics, while still important, don’t paint the full picture of a GCC’s value.
Leaders must develop new ways of measuring success that takes into

8. account factors like innovation, strategic impact, and employee
engagement.
This isn’t always easy. It requires a significant shift in mindset and a
willingness to challenge long-held assumptions about what success looks
like for a GCC. Leaders need to be bold, visionary, and persistent in
driving this change.
They also need to be excellent communicators. Helping stakeholders
understand the new vision for the GCC, and getting buy-in for new metrics
and ways of working, requires clear, compelling, and consistent
communication.
Embracing the Future: The Ongoing Journey to Realizing
GCC Potential
In many ways, the story of GCCs is a story of transformation. These
centers have evolved significantly from their early days as simple cost-
saving units. Today, they are increasingly indispensable strategic partners,
helping global organizations navigate the complexities of the modern
business environment.
But to fully realize this potential, GCCs need to close the Value Gap. They
need to embrace a new, more comprehensive understanding of value that
goes beyond just cost savings. There is a need to develop metrics that
capture the full impact of GCCs, from their contribution to innovation and

9. strategic objectives to their role in building a strong, healthy organizational
culture.
This is the future of GCCs. It’s a future where these centers are
recognized and valued for their true potential – not just as cost savers, but
as drivers of strategic innovation and excellence. It’s a future that
organizations need to embrace if they want to thrive in an increasingly
complex and competitive global landscape.
Discover how your GCC can bridge the Value Gap and unlock its true
potential. Contact us today at info@zinnov.com for a personalized
strategy to redefine Success Metrics.
Ready to talk?
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10. Tags:
CENTERS OF EXCELLENCE GCC ECOSYSTEM GLOBAL CAPABILITY CENTERS
INDIA GCCS INDIA GCOE
Authors:
Nitika Goel, Chief Marketing Officer, Zinnov
Vishal N, Project Lead, Zinnov
Sachit Bhat, Associate, Zinnov
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