Enterprises are shifting from traditional outsourcing models to establishing Global Capability Centers (GCCs) that manage complex, strategic functions in-house. However, only 8% of GCCs qualify as top performers, delivering strategic innovation and differentiation. Designed to drive productivity through shared services, these centers often become victims of their own scale.
As they expand, they introduce complex ticketing systems, unclear responsibilities, and an inward focus on Service Level Agreements rather than business outcomes. The result is a cycle in which processes intended to boost efficiency create bottlenecks and slow product delivery instead.
The root cause is often poor GCC design. As these centers expand, added governance layers, fragmented funding, and inter-team dependencies erode agility and ownership, undermining a true product mindset. Functional teams such as QA, Data, and UI are forced into a project-based approach, resulting in frequent context switching and inefficient handoffs.
While fully dedicated teams can deliver greater consistency and velocity, this is uncommon in large, pooled shared-services models. As a result, enterprise leaders now face a new challenge of structuring GCCs to avoid the pitfalls of scale. The solution is to move from large, centralized GCCs to a distributed network of autonomous, product-focused micro-GCCs.
Large GCCs get into the shared services trap
Although many larger GCCs achieve effective product alignment, a significant number revert to a shared services mindset due to their foundational structures. Adopting a product-aligned framework from the outset enables GCCs to overcome these limitations, drive operational efficiency, and position themselves for scale.
| Parameter | Traditional GCCs | Product-Aligned Micro GCCs |
|---|---|---|
| Funding model | Project-based funding relies on capital expenditure and runs for 2-3 years, with a fixed scope and timeline. | Capacity funding treats full-time teams as an ongoing operating expense, enabling continuous delivery and greater flexibility. |
| Core metric | Performance is measured by internal process metrics like SLA compliance, ticket resolution times, and resource utilization. | Measured by external business outcomes such as customer lifetime value, product adoption rates, and direct financial impact. |
| Ownership | Responsibilities are split across development, quality assurance, and operations, causing siloed workflows. | A single, full-time squad owns the product end-to-end, ensuring accountability from development through operations. |
| Governance | Centralized, relying on standardized procedures and functional approvals to control decision-making. | Gives teams autonomy while providing access to centralized resources, shared standards, and outcome-based reviews. |
| Scaling | Aggregation consolidates functions into larger pools to achieve economies of scale. | Scaling is achieved by replication, adding independent micro GCCs aligned to specific products as the business grows. |
Principles for building a product-aligned micro GCC
A successful product strategy demands a structured approach that moves from initial concept to proven business value. The seven principles of micro GCC creation drive product alignment and accelerate measurable outcomes.
1. Start with product scope
Begin by setting clear scope and boundaries for each product. A product may be a customer-facing application, an internal platform, or a core capability such as fraud detection or network optimization. But it must constitute a distinct unit of business value.
- Identify one or two products that are critical to business outcomes
- Determine clear ownership, and define the objectives for each product
- Define scope, ownership, and accountability precisely
- Success metrics become explicit, and dependencies are reduced
Teams aligned to a single product experience fewer handoffs and greater operational efficiency than teams organized around shared capabilities.
2. Form cross-functional squads persistently
Shift from assembling teams for individual projects to forming small, stable squads aligned to specific products. Each squad should include a product owner focused on business outcomes, a technical lead responsible for strategic direction, full-stack engineers for execution, a QA specialist to ensure quality, and an SRE or DevOps engineer to manage operations.
- Fund teams based on ongoing capacity
- Make persistence the team's core principle
- Maintain stable squads for multiple quarters or years
- Enable teams to share context and accumulate institutional knowledge
- Make long-term technical decisions that avoid short-term trade-offs
This approach also addresses the hidden costs associated with productivity loss from context switching. Persistent teams minimize this inefficiency and support sustained delivery.
3. Embed ownership from day one
Many GCC organizations separate product development from ongoing support, handing products to centralized teams after launch. This model creates operational gaps during incidents, leading to slower response, lower resolution quality, and misaligned incentives between teams.
Product-aligned micro GCC teams, on the other hand,
- Integrate development, support, and reliability
- Maintain end-to-end ownership throughout the product lifecycle
- Make engineers directly accountable for performance and reliability
- Deliver higher code quality and operational excellence
- Set clear SLOs and error budgets for each product
When teams are aligned to specific products, they take responsibility for every stage of the product lifecycle, from development to operational support. This ownership leads to faster time-to-market and higher quality than traditional handoff models.
4. Design governance for autonomy
Governance should drive value creation by removing barriers to decision-making.
- Adopt a light, product-centric governance model
- Anchor product reviews in business value
- Bring teams together for timely reviews
- Decentralize operational decisions to improve agility
- Centralize standards to manage risk consistently
Most GCCs still use function-based approval processes that slow down operations and reduce agility. A product-centric approach prioritizes business outcomes and measurable value.
5. Shift metrics to business outcomes
Traditional shared services GCCs rely on activity-based metrics such as ticket closure rates, resource utilization, and SLA adherence. These throughput measures focus on volume and efficiency but do not capture the true business impact or value delivered.
Product-aligned micro GCCs shift the focus to outcome-based metrics that align directly with business objectives. Product OKRs are linked to strategic priorities, while customer KPIs measure end-user value through conversion rates, satisfaction scores, and revenue contribution.
Operational reliability is measured by uptime, deployment frequency, and mean time to recovery, ensuring consistent, measurable delivery. This approach drives continuous improvement by reducing technical debt, elevating the customer experience, and prioritizing new features that deliver quantifiable business results.
6. Define a thin shared services layer
Product alignment does not require full centralization of all functions. Centralization should focus on core areas such as human resources, finance, compliance, and identity or access management.
- Keep the central structure lean and deliver support functions that enable business units
- Let central teams set clear guardrails for automating key processes such as HR, finance, compliance, and identity and access management
- Empower product teams to make decisions on the roadmap, backlog, and delivery, ensuring a strong momentum
An effective operating model reduces operational friction while building productive interdependence.
7. Scale by replication
As GCCs scale, the default response is often to consolidate teams to achieve economies of scale. Yet, this can erode the core strengths of the micro GCC model.
- Enable standardized governance with minimal overhead
- Enforce consistent operational standards
- Maintain organizational agility
Over time, the micro GCC model continues to deliver value at the unit level and create defined career pathways for top engineering talent. High performers can progress from individual contributor roles to technical leadership within their micro GCC or to architectural roles spanning multiple units. This structure supports talent retention and strengthens organizational capability.
Major corporations such as BlackRock demonstrate these principles in practice. At their Indian GCCs, teams are organized into geographic squads that bring together product managers, developers, and operations staff to focus on defined business outcomes. This integrated approach enables squads and team members to move across products according to their skills and evolving business needs.
A transformation path for large GCCs
Large, established GCCs can build on existing investments by adopting the micro GCC model to shift toward product-centric operations. Select 1-2 high-impact products and set up autonomous pilot units for each, with dedicated funding and clear accountability for measurable outcomes.
Serving as proof points, these pilots provide a scalable template for broader adoption across the center. By moving from a centralized shared services model to a federated network of independent, product-focused units, GCCs can achieve operational excellence while minimizing disruption and fostering a culture of product ownership and accountability.
Make a strategic choice
Moving from legacy shared services to a product-aligned micro GCC model is now a strategic necessity for organizations aiming to unlock new value streams. Instead of viewing GCCs as cost centers, the micro GCC approach transforms them into drivers of competitive advantage, delivering innovation, agility, and quantifiable business outcomes.
Adopting the micro GCC model allows organizations to respond rapidly to market changes and competition. Those that remain anchored to traditional shared services will struggle to keep pace, as rigid efficiency models limit innovation, scalability, and adaptability to shifting business requirements.
Speed, flexibility, and clear ownership will define the next generation of GCCs. The micro GCC model provides a pragmatic, high-impact pathway to deliver on these priorities. Knowing how to break away from a traditional mindset to a product-led strategy will be critical in achieving measurable outcomes.
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Umesh BhoraleContent StrategistTorry Harris Integration Solutions |
