included to bring these challenges into perspective.
1. Lack of a Clear Strategic Mandate A GCC without a defined strategic purpose is directionless. When the mandate is not aligned with broader enterprise goals, centers often become reactionary support units rather than proactive transformation hubs.
- Problem: Ambiguous charters lead to internal confusion, resistance from HQ, and limited investment.
- Solution: Define a compelling mission from Day 1. Whether the focus is on digital innovation, scalability, or center of excellence models, link the mandate directly to enterprise priorities. Engage business stakeholders in defining success metrics.
Case Example: A European bank launched multiple intranet systems under different business units with no unified objective. Projects like “Officeweb” and “GTSnet” were ultimately abandoned due to vague strategic mandates and lack of user adoption (Source).
2. Overemphasis on Cost, Underinvestment in Capability Cost optimization is a critical value lever—but over-indexing on cost can create an unsustainable operating model. Many new GCCs neglect capability building in areas like digital fluency, domain expertise, and leadership development.
- Problem: A narrow cost-saving focus undermines the center's potential to add long-term strategic value.
- Solution: CXOs must adopt a dual agenda—optimize cost, but invest in process excellence, automation, and innovation enablers. Build the foundational capability stack that allows the GCC to evolve from support to strategy.
Case Example: During the 2019 Mumbai blackout, several cost-focused GCCs were severely disrupted due to underinvestment in backup power infrastructure—highlighting the risk of ignoring operational resilience.
3. Failure to Attract and Retain the Right Talent People are at the core of any successful capability center. However, new GCCs often underestimate the importance of market reputation, culture, and long-term career growth opportunities.
- Problem: High attrition, shallow skill pools, and leadership gaps delay value realization.
- Solution: Develop a strong Employee Value Proposition (EVP). Prioritize hiring for potential and cultural fit, not just cost and experience. Empower local leadership and offer global exposure and fast-track career pathways.
Case Example: GCCs in India continue to face high attrition rates (15–20%) in key roles. Everest Group research attributes this to lack of differentiated EVP and insufficient leadership depth.
4. Inadequate Change Management and Cultural Alignment New GCCs face significant resistance from global counterparts and often lack the cultural integration necessary to operate seamlessly with the enterprise.
- Problem: Misaligned expectations, communication gaps, and mistrust from global teams create friction.
- Solution: Invest in structured change management programs. Promote cultural alignment through immersive onboarding, executive sponsorship, and regular cross-functional interactions.
Case Example: Walmart’s acquisition of Flipkart exposed significant friction in aligning operating models. Differences in governance expectations, cultural values, and stakeholder management styles initially hindered GCC alignment.
5. Delayed or Poorly Planned Digital Enablement Digital maturity is a baseline expectation for any modern GCC. Without the right tools and platforms, new centers fall behind on performance, visibility, and collaboration.
- Problem: Legacy processes, manual interventions, and limited digital investment restrict scalability.
- Solution: Plan and deploy the digital infrastructure from inception. Prioritize workflow automation, analytics, cloud adoption, and integrated service delivery tools.
Case Example: A leading GCC in Mumbai struggled to integrate its legacy CRM with a newly deployed cloud-based ERP. The mismatch led to months of delays and inefficiencies due to poor digital enablement planning.
6. Weak Governance and Performance Metrics Effective governance structures and meaningful metrics are essential to track progress and drive accountability. New GCCs often operate in a vacuum with metrics focused on effort rather than outcomes.
- Problem: Overbearing control or lack of oversight both create risk. Metrics are either irrelevant or misaligned.
- Solution: Build a hybrid governance model. Empower local decision-making while aligning with enterprise goals. Use a balanced scorecard: cost, capability, innovation, compliance, and customer experience.
Case Example: According to Everest Group, many GCCs fail to scale because their governance models centralize decision-making at HQ and track outdated or irrelevant metrics—leading to low agility and internal friction.
Conclusion: Embedding Excellence from the Start Success in the GCC model hinges on early strategic decisions. CXOs and transformation leaders must move beyond tactical metrics and embrace a holistic playbook—one that integrates talent, technology, process, and purpose. The GCCs that thrive are not those that scale the fastest, but those that scale with clarity, culture, and capability.
Next Steps:
- Audit your current GCC roadmap against these six pitfalls
- Engage enterprise stakeholders in redefining your GCC’s strategic mandate
- Prioritize investments in people, platforms, and performance measurement
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