Global Capability Centers: The Crucible for Technology Consulting Businesses
Evolving Role of GCCs
Global Capability Centers (GCCs), formerly known as Captive Centers, initially served as in-house offshore delivery centers designed to optimize cost and extend capacity for IT services and digital engineering work. More recently, these centers have evolved beyond back-office support into more integrated functions across product development, analytics, and enterprise decision-making.
As witnessed during previous technology booms, the advancement and enterprise adoption of Generative and Agentic AI has brought GCCs back to the center of enterprise strategy. For many organizations, GCCs now represent a shift toward building and owning critical AI capabilities internally. At the same time, tightening immigration policies in countries such as the United States, the United Kingdom, Canada, and parts of the European Union are indirectly, but materially, accelerating the establishment and expansion of GCCs in offshore locations, including India, Mexico, and other parts of the world.
At the core of the current GCC expansion is a change in how enterprises think about control. As AI capabilities become more central to competitive advantage, organizations are placing greater emphasis on owning the talent, data, and systems that support them. GCCs have emerged as a natural extension of that thinking.
A Near-Term Shift in the Engagement Model
For technology services firms, a core segment of Clearsight’s client base, this shift introduces a real and immediate tension, as work that was historically outsourced is increasingly being brought in-house. As enterprise clients invest in their own GCCs, traditional engagement models face pressure, particularly in areas that were once central to services providers. In that sense, GCCs represent a significant near-term challenge.
However, this is only part of the story. A more compelling development is that several technology services providers are viewing this shift as a growth opportunity. Beyond supporting longstanding clients with the setup and scaling of GCCs, whether through Build-Operate-Transfer (BOT) models or other approaches, these firms are creating substantial strategic value by offering technology and process thought leadership. These services providers are partnering with clients in joint pursuits to drive innovation within GCCs, ultimately helping enterprises in building sustainable competitive advantage.
A Familiar Cycle Driven by Technology and Economics
As noted above, the IT services industry has moved through similar cycles before. Major technology shifts tend to reset how companies build capability. In earlier cycles, this occurred with mobile and cloud computing. Today, AI is driving a new phase of insourcing as enterprises seek to develop and control next-generation capabilities internally.
Over time, as these organizations scale, costs rise and operational complexity increases. As that happens, the rationale for full ownership often begins to shift, leading companies to revisit outsourcing, partnerships, or the sale of captive units. We are now at the onset of a familiar cycle. As AI-driven services enter the mainstream over the next few years, GCCs may increasingly be carved out from captive models and sold to technology services partners, potentially accompanied by a renewed wave of technology outsourcing.
Opportunities for IT Services Firms Today
For IT services firms, the opportunity lies in how they engage during the current phase. Rather than remaining on the sidelines, many firms are positioning themselves alongside their clients as GCCs are built and scaled. This role entails helping clients establish these environments, stand up teams, and define delivery models across locations such as India and Mexico.
As GCCs evolve, this involvement creates a pathway to higher-value engagement that is more embedded within the client’s operating model.
This progression also changes how enterprises engage on a day-to-day basis. Historically, third-party IT providers worked primarily with onshore enterprise technology leadership. As GCCs mature, these centers increasingly become the primary interface for winning new business.
M&A Implications
We are seeing large onshore-based technology services companies acquire smaller, offshore-led services peers to establish meaningful offshore presence in regions such as South Asia and Latin America. Our recent transaction involving Everforth’s acquisition of Quinnox is one such example.
On the other side, the acquisition of Olam Group’s IT services arm, Mindsprint, by Wipro highlights how internally built capabilities can evolve into scaled platforms.
Market leaders such as Mphasis and Persistent Systems have also continued to invest in capabilities aligned with this model. For instance, Mphasis’s investment in Aokah to accelerate AI-driven transformation for global operations and capability centers appears to be driven by the strategy of supporting global clients in establishing and scaling GCCs.
For IT services firms, this is where the perspective shifts from short-term pressure to long-term positioning. Firms that engage early, helping clients establish and scale GCCs, are not only supporting the current phase of insourcing, but they are also building proximity to assets, capabilities, and relationships that may evolve over time. As ownership models are revisited, these firms may be better positioned to participate in future M&A transactions.
From an M&A perspective, this reinforces a familiar pattern. Technology-driven shifts often lead to periods of insourcing, followed by phases of externalization and consolidation. GCCs are part of that broader cycle. What may appear today as displacement can, over time, become a source of opportunity for firms that remain engaged throughout.
The takeaway is not to view GCCs solely as a threat to traditional services models. Instead, it is to recognize where we are in the cycle and how value is likely to shift over time. AI is the current driver, but it will not be the last. For services firms, the opportunity lies in playing the long game.
Contact the Author
Managing Director, Clearsight Advisors
New York, NY
Sources: NASSCOM, Global Capability Centers (GCC) Report; Reuters, coverage of Wipro acquisition of Olam Group’s IT business (Mindsprint); CNBC, reporting on GCC growth trends; ZS Associates, research on GCC expansion across global enterprises; Public disclosures and investor materials from Mphasis and Persistent Systems
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