March, 2025

13 mins read

GCC Momentum will Continue Despite Geopolitical Tensions

Mohammed Faraz Khan - Partner and Head – EMEA at Zinnov 06 Mar 2025

Mohammed Faraz Khan, Partner and Head – EMEA at Zinnov, is a leading Global Capability Centre (GCC) expert and a specialist in tech and talent strategy, margin improvement, and innovation acceleration. In conversation with Harshit Arora, he discusses the evolving role of GCCs as innovation hubs, their strategic importance in global business resilience, and emerging areas like AI and cybersecurity. He explains why GCCs remain vital despite global uncertainties and how consulting drives their long-term growth and transformation. As India becomes increasingly expensive to operate in, Khan highlights the shift towards leveraging the country for specialised, higher-value work — particularly in AI — leading to a rise in advanced portfolios across industries.

GCC Momentum will  Continue Despite  Geopolitical Tensions

From being a system design engineer at John Crane to now serving as Partner and Head of Europe, the Middle East, and Africa (EMEA) at global consulting firm Zinnov, what inspired this transition from engineering to management consulting?

I’ll take you back in time. I’m a mechanical engineer by qualification, and like many others in the field, design was my dream job. I joined John Crane, the world’s largest mechanical seal manufacturing company, which works with complex equipment like pumps. Landing that job felt like a perfect start.

However, about a year in, I realised the design process, while technically intriguing, was slow and painstaking. I found myself craving something more dynamic and adaptable — a role that provided a broader view of the market and aligned more closely with business principles. Around the same time, my then-girlfriend (now my wife) was working in consulting. Hearing about her work — understanding market trends and how businesses operate — was fascinating. That exposure sparked my curiosity. After spending a couple of years at John Crane, I decided to give consulting a shot.

I started my consulting career at Infinity, a research organisation, before moving to Frost & Sullivan, where I spent about three and a half years. Then, an opportunity came up at Zinnov. It’s been ten years now, and the journey has been incredibly rewarding.

Since much of your experience revolves around Global Capability Centres (GCCs), could you shed some light on what the industry is and how it functions?

Absolutely. I’ve been tracking the global capability centre space for over a decade now. For those unfamiliar, GCCs are also known by other terms like Global In-House Centres (GICs) or Global Development Centres (GDCs). Previously, they were called captive centres, but the industry has moved away from that term due to its negative connotations. Essentially, a GCC is an offshore unit of a global organisation headquartered outside the country.

While India is a major hub, GCCs are located worldwide — in countries like the Philippines, Vietnam, Brazil, and Mexico. The work done in GCCs typically falls into three broad categories. First, there is core technology, or engineering R&D (ER&D), which involves designing and developing products — both hardware and software — that directly contribute to the company’s revenue. Second, there is IT, which covers business and enterprise IT tasks such as application development, infrastructure management, and system integration. The third area is Business Process Management (BPM), which includes customer support, sales and marketing support, and shared services like HR and finance.

A key distinction between a GCC and an Offshore Development Centre (ODC) lies in ownership. In a GCC, the employees are on the payroll of the parent organisation, making it an extension of the company. In contrast, an ODC is operated by a third-party service provider like Infosys, TCS or Wipro, where the staff work for the global organisation but remain on the service provider’s payroll. This distinction underscores how GCCs allow companies to maintain greater control and alignment with their core business objectives.

How does consulting play a role in the GCC industry?

Consulting plays a crucial role across the entire lifecycle of a GCC. When a parent organisation decides to set up a GCC, the first phase involves designing the strategy. This includes identifying the optimal location, determining which portfolios to move, assessing the scale of operations, and evaluating talent acquisition and retention strategies. Financial modelling is also a key aspect — analysing investment requirements and potential returns on investment (ROI).

Once the design phase is complete, the next step is implementation — bringing the blueprint to life. This involves setting up the physical infrastructure, establishing employee onboarding policies, and executing the talent strategy. Throughout both the design and implementation phases, consulting firms provide expertise to ensure the GCC is structured efficiently and aligns with the parent organisation’s long-term goals.

However, the consulting role does not end once the GCC is operational. After the initial excitement of setting up a GCC fades — typically within six to 12 months — organisations often face the question: What next? This is where consultants play a pivotal role in driving the next phase of growth. They work closely with both the GCC and the headquarters to identify opportunities to expand portfolios, enhance technological capabilities, and foster innovation.

Consultants help GCCs evolve from operational units into strategic hubs by addressing key questions: What new portfolios can the centre take on? How can technology enhance existing processes? How can the GCC increase ownership of critical functions? How can it drive innovation through partnerships with local ecosystems — such as startups and academic institutions?

The goal is to position the GCC as a centre for high-value outcomes and end-to-end portfolio management, encouraging headquarters to entrust it with even more complex and strategic responsibilities.

Broadly, the GCC lifecycle consists of two phases: the design and implementation phase, followed by the maturity stage. As GCCs scale — from a few hundred employees to several thousand — consultants refine talent, portfolio, and innovation strategies to sustain growth and relevance.

When a GCC reaches a plateau — whether due to macroeconomic shifts, leadership changes, or talent attrition — consultants step in again to reignite the strategic conversation. This might involve repositioning the GCC as a transformation hub or guiding the transition to an advanced “GCC 2.0” or “GCC 3.0” model, which focuses on deeper integration, greater business impact, and long-term sustainability.

In short, consulting is integral at every stage of a GCC’s journey — from initial design and implementation to ongoing evolution — ensuring these centres remain agile, innovative, and strategically aligned with their parent organisations.

As the former head of GCC transformation at Zinnov, what major shift have you observed in how global companies approach their innovation centres in India?

Let’s break this down a bit. The first GCC in India — Texas Instruments in Bangalore — was established back in the 1980s. Since then, the ecosystem has evolved significantly. Before the 2000s, GCCs were primarily focused on cost arbitrage and business process management functions. At the time, India was known for call centres, customer support, back-end IT operations, and tasks like desktop support and bug fixing. These were mostly low-level, tactical portfolios.

Today, the landscape is entirely different. Global companies are entrusting their India GCCs with cutting-edge portfolios and critical business functions. For instance, a significant portion of Microsoft’s revenue comes from products like Teams and Azure — both of which are substantially managed by their teams in India. This shift reflects a growing recognition of India’s deep talent pool and its ability to handle high-value, strategic work.

As a result, GCCs in India are no longer just operational back offices — they are innovation hubs. Companies are leveraging these centres to drive product development and solve complex, global challenges. Take Google, for example. Google Pay originated as “Google Tez,” a product conceptualised and piloted by a small team in Hyderabad. Its success in India led to its global rollout. Similarly, Mercedes-Benz’s MBRDI centre in India plays a key role in driving intellectual property (IP) creation and automotive innovation.

This trend spans industries — from technology and automotive to healthcare and financial services. Companies increasingly view their India GCCs as vital engines for innovation and strategic growth.

What are the emerging specialised capability areas where you see GCCs playing a crucial role?

India has already established itself as a global leader in software product development and IT services — moving these portfolios to India is now a no-brainer for many organisations. However, where we see significant future growth is in niche, specialised skills. Think artificial intelligence and machine learning (AI/ML), data science, blockchain, cybersecurity, and the Internet of Things (IoT).

Global organisations are increasingly seeking talent in these areas, and India stands out due to its large and rapidly growing pool of digital talent. As a result, many companies are moving these advanced portfolios to their India GCCs. Indian teams are now deeply integrated with global AI, blockchain, and cybersecurity teams, working together to solve complex use cases.

The explosive growth of AI, in particular, positions India as a key player in shaping the future. While many GCCs already handle digital capabilities, the focus on these advanced areas is accelerating. As companies continue to explore new frontiers in technology, India’s GCCs will play an even more pivotal role in driving innovation and delivering cutting-edge solutions.

With your multilingual background (English, Hindi, Arabic, Urdu, Kannada), how does this cultural and linguistic understanding support global GCC operations?

In India, English is the primary business language, which works well across the country. However, my recent experience managing the EMEA region has shown me how crucial cultural and linguistic understanding is when operating globally. In countries like France and Germany, for instance, many business discussions — especially with local teams — are conducted in their native languages.

Understanding local nuances goes beyond language — it helps build trust and stronger relationships. Simple things, like knowing cultural customs, local history, or even discussing food and weather, become valuable conversation starters. This relational aspect is critical for GCCs, where success often depends on seamless collaboration between global and regional teams.

Ultimately, whether in India or internationally, business is built on trust and relationships. My linguistic and cultural knowledge has helped me foster these connections, which is vital when working across diverse geographies and ensuring alignment between GCCs and their parent organisations.

How do you overcome the challenge of being perceived as an outsider in the EMEA region?

It’s definitely challenging because, despite effective communication, we can still be perceived as outsiders. To bridge this gap, we rely on local partners and advisors. We’ve onboarded advisors from the region who not only coach us on cultural nuances but also join us in customer conversations, helping us build trust and stronger relationships.

How is the rise of AI and automation reshaping the GCC landscape, particularly in traditional engineering and R&D centres?

As I mentioned earlier, India has one of the largest talent pools for niche technologies like AI, which is significantly reshaping the GCC landscape. That said, we have to acknowledge that India is also becoming expensive to operate in. As a result, it now makes more sense to leverage India only for specific areas of higher-value work — AI being one of them. We’re seeing a growing number of these advanced portfolios being established across industries.

One example is a global bank we recently engaged with. Traditionally, banks have Anti-Money Laundering (AML) teams to track suspicious transactions. Money laundering isn’t a simple, point-to-point process — it can involve thousands of accounts across multiple regions before converging. This bank had around 400 people working across three levels of investigation to identify suspicious activity. By integrating AI-driven AML systems at their India GCC, they automated large portions of the screening process, reducing manual work by nearly 25 per cent. This allowed the organisation to repurpose those employees for more complex tasks — demonstrating how AI not only drives efficiency but also helps GCCs deliver higher-value outcomes.

How is the traditional consulting business model evolving with the rise of specialised boutique firms and in-house consulting teams?

I see the relationship between in-house strategy teams and external consultants as more of a partnership than a competition. External consultants bring a “one-to-many” perspective — drawing from their experience across multiple organisations and industries. Often, the challenges a company faces are not entirely unique, and external consultants can offer proven frameworks and best practices from similar or even adjacent industries.

On the other hand, in-house teams have a deep understanding of the organisation’s business domain, cultural nuances, and internal dynamics. When these two work together, they complement each other’s strengths — external consultants provide broader insights, while in-house teams bring context and practical knowledge. This collaborative approach significantly enhances the ability to tackle complex challenges effectively.

With rising geopolitical tensions affecting global business, how are companies rethinking their global innovation and centre strategies?

If you look back over the past five or six years, we’ve seen major disruptions — the Covid-19 pandemic, the US-China conflict, the Ukraine-Russia war, crises in the Middle East, and even financial shocks like the SVB collapse. Each of these events has created challenges for multinational corporations — whether in supply chains, talent shortages, or market uncertainties.

Despite these disruptions, the response from GCCs has remained positive. Over the past five years, we’ve seen approximately 80 to 100 new GCCs being established annually — a trend that continued even during the pandemic. This highlights how organisations, regardless of macroeconomic conditions, recognise the value GCCs bring — whether it’s cost efficiency, innovation, or access to advanced skills and technologies.

We believe this momentum will continue despite geopolitical tensions. GCCs have become indispensable in the broader MNC strategy because of the significant return on investment they deliver, making them a critical part of long-term business resilience and growth.

What advice would you give to someone pursuing a career in consulting?

I firmly believe that consultants should prioritise active listening over speaking. When a client or potential customer talks, they provide valuable insights that shape your solution. My advice to aspiring consultants is simple — listen carefully and absorb as much as you can during conversations. It’s through understanding their perspective that you’ll be able to deliver meaningful solutions.

What is one skill every aspiring consultant should develop?

One critical skill I’ve developed over the years is the ability to read the room. As a consultant, you interact with diverse stakeholders — one day you might be speaking with an HR leader, another day with the CTO, CPO, or even the CEO. While the project may be the same, each audience focuses on different aspects of the problem. Understanding these perspectives and tailoring your message accordingly is crucial. Being able to gauge the room and adjust your approach is an invaluable skill for any consultant.

Finally, is there a book that has influenced your leadership style?

I’ve read several impactful books, but one that stands out is The Culture Map by Erin Meyer. It offers insights into how different cultures interpret and respond to situations. For anyone aspiring to be a global consultant, I consider it an essential resource. It helps you navigate cultural nuances and prepares you to engage effectively with clients across the world.