Transforming Global Capability Centers: From Cost to Profit Centers

At Cupela, we have written several articles on the challenges that Global Capability Centers (GCCs) face and the solutions that their leaders can implement to overcome them. In one of our previous articles, we mentioned the importance of value creation to maintain a competitive edge . Here we approach it from a different angle: transforming your GCC from a cost center to a profit center by fully leveraging and monetizing your in-house skills and talents.

In the process of transitioning from cost-centric entity to profit-driving powerhouse, innovative strategies are imperative. Harnessing internal strengths and capabilities, these centers can pivot their focus toward revenue generation, thereby evolving into profit centers. Here are several strategic pathways for GCCs to consider on this transformative journey:

1. Data Analytics Services

GCCs equipped with robust data analysis teams possess a goldmine of information insights. By leveraging this expertise, these centers can extend data analytics services to external companies seeking profound business intelligence. This not only capitalizes on internal capabilities but also monetizes data proficiency.

For example, a company I used to consult would analyze videos of truck drivers driving across the States and give feedback on driving style to improve safety and cost efficiency. When various companies started developing autonomous cars, this company saw an opportunity: they collected data points and created simulation videos from all the data they had collected over the years and those were then used to teach the autonomous vehicles to drive.?

This is just one example of creating a highly profitable new income stream at a GCC that had just been a cost center until then.?

2. GCC Consulting

Having been through the process, a successful GCC can advise other newer GCCs on the pitfalls and best practices on setting up a new center.?

While there are many GCC consulting companies, they lack hands-on experience in setting up a GCC. A typical consultant can advise on legal and regulatory aspects, infrastructure, office space, dealing with government clearances, and vendor management; they are unlikely to have an in-depth understanding of the importance of cultural integration and collaboration with the parent organization, strategic alignment with the overall organization strategy.?

I have been involved in such a project myself and have found it to be not only a good source of revenue but also a great way to strengthen ties between GCCs. ?

3. Marketing Services

Departments excelling in specialized marketing domains such as digital marketing, content creation, or social media management can extend these services to external clients. This augments revenue while showcasing the depth of marketing prowess within the organization.

4. Innovation Incubator

As mentioned in the recent article on value creation , I have been involved in setting up an in-house innovation incubator and have seen first hand how beneficial that was to the GCC as well as the parent company. ?

Developing a dedicated department focused on nurturing and launching new ideas, products, or startups demonstrates a commitment to innovation. Collaborating with external entrepreneurs and investors not only fosters innovation but also creates revenue-generating opportunities.

5. Quality Assurance and Testing Services

Strong quality assurance teams can extend their services externally by offering testing solutions. This ensures the quality and reliability of products or software for other organizations, thereby transforming expertise into revenue.

6. Product Training and Experience Center

With a focus on training on your own products, you can offer programs that will be superior to others in the market. You will have unmatched expertise, access to resources no third-party trainer can offer, support from internal experts when dealing with complex solutions, the latest information, the opportunity to network with internal experts as well as a lab, or an experience center where products can be tried and tested.

By identifying and capitalizing on internal capabilities that hold value for external entities, GCCs can pivot from being cost centers to profit centers. This transformation not only diversifies revenue streams but also solidifies the role of these centers as indispensable assets within the corporate landscape. As GCCs evolve, their contributions to both the parent organization and the broader business ecosystem become increasingly multifaceted and impactful.

Remember, the key lies in recognizing and effectively monetizing areas of expertise and resources within the organization. Through strategic initiatives that align with market demands, GCCs can chart a course toward profitability while maintaining their core functions and value propositions.