Build vs Buy: The complete guide to GCC implementation

The business imperative behind GCC growth

The global GCC market reached $128.5 billion in 2023 and continues growing at 6% annually, with over 1,700 GCCs operating across India alone, employing 1.9 million people and generating $64.6 billion in revenue. This expansion reflects a fundamental shift from cost reduction centres to strategic capability hubs that drive innovation, digital transformation, and unlock a competitive advantage.

Modern GCCs serve as Centers of Excellence that integrate key talent complemented by artificial intelligence, automation, and cloud technologies to deliver sophisticated business processes across finance, human resources, IT operations, procurement, and customer service functions. The challenge for enterprise leaders is determining how to access these capabilities while managing implementation risks, controlling costs, and maintaining operational flexibility.

Build your own GCC: The internal development path

Building an internal GCC provides complete operational control and long-term cost advantages at scale. Organisations can develop custom processes aligned with their specific requirements, maintain direct talent management, and protect intellectual property within their own operational framework.

However, this approach demands significant upfront investment in legal entity establishment, infrastructure development, and talent acquisition across multiple jurisdictions. The timeline from decision to full operational capability may take well over a year, during which organisations must navigate complex compliance requirements, recruitment challenges, and operational risks that can delay value realisation.

The financial commitment extends beyond initial setup costs to include ongoing management overhead, technology infrastructure, and the expertiserequired to establish mature operational processes. While potentially cost-effective at scale, the break-even point may not be achieved for several years, making this approach suitable primarily for large enterprises with long-term strategic commitments.

Traditional Outsourcing: The partnership route

Outsourcing to established service providers offers immediate access to proven capabilities, infrastructure, and expertise. Organisations can achieve rapid deployment through existing operational frameworks while transferring compliance and management responsibilities to experienced providers.

This model provides predictable cost structures through defined service level agreements and reduces implementation risks by leveraging established processes. However, it typically limits operational control and customisation flexibility while creating vendor dependency for strategic capabilities. The trade-off between speed and control makes traditional outsourcing suitable for organisations seeking standard processes rather than differentiated capabilities.

GCC-as-a-Service: The hybrid solution

The emergence of GCC-as-a-Service models addresses the fundamental limitations of both build and buy approaches by combining rapid deployment with operational control. While GCC-as-a-Service can apply across enterprise functions, specialised providers focus on specific domains where deep process expertise and regulatory knowledge create measurable value. This delivery model provides pre-enabled governance frameworks, established talent pools, and ready-to-deploy technology infrastructure that can be customised to specific organisational requirements.

Unlike traditional outsourcing, GCC-as-a-Service maintains client control over strategic decisions while providing access to established operational capabilities. Organisations can deploy global delivery capabilities within weeks rather than years, significantly reducing implementation risks while preserving the flexibility to scale services based on evolving business requirements.

The model shifts capital expenditure to operational expenditure, providing predictable cost structures with improved return on investment timelines. This approach eliminates the complexities of entity setup, real estate investment, and initial talent acquisition while maintaining the operational visibility and customisation flexibility typically associated with internal development.

Zalaris engagement models: Flexible capability development

Zalaris focuses specifically on HR, payroll, and finance operations where functional excellence, regulatory complexity, and process maturity deliver a substantial competitive advantage. Recognising that different organisations require different levels of control and service integration, Zalaris offers five distinct engagement models that transform these functions from operational hubs into value centres driving compliance, digital innovation, and cost efficiency.

The HR and Payroll Outsourcing model provides SLA-driven delivery on established SAP platforms,with governance-first frameworks, ideal for organisations seeking operational stability and multi-country compliance assurance without significant customisation requirements. This approach delivers immediate capability access through proven processes and established service frameworks.

Functional Pods offer dedicated domain expertise with deep process ownership in areas such as payroll, finance operations, ESG reporting, automation, and analytics. This model provides access to specialised talent without headcount liability, enabling organisations to access expert capabilities for specific functions while maintaining overall operational control.

Co-managed Operations establish a shared governance structure where clients retain strategic control while Zalaris manages operational execution. This approach suits enterprises scaling across multiple regions that require operational visibility and control while leveraging provider expertise for implementation and day-to-day management.

The Fully Managed Global Capability Centre provides comprehensive end-to-end delivery for HR, payroll, and finance functions, including technology infrastructure, compliance management, and operational governance under Zalaris management with embedded process excellence. This model enables complete transformation without the complexities of legal setup or operational development, suitable for organisations seeking rapid capability deployment with minimal internal resource commitment.

Build-Operate-Transfer arrangements allow organisations to access immediate GCC capabilities while developing internal capacity for eventual ownership transfer. Zalaris establishes and operates the GCC with a structured transition plan that transfers knowledge, processes, and eventually full operational control to the client organisation.

Cost of ownership considerations

Effective GCC decision-making requires comprehensive financial analysis that extends beyond initial setup costs to include long-term operational expenses, hidden costs, and return on investment timelines. Building internal capabilities demands substantial upfront capital investment but may offer superior long-term financial performance at sufficient scale.

Service models convert capital expenditure to operational expenditure with predictable cost structures that typically provide faster return on investment. However, long-term costs may exceed those of internal development depending on service scope and scaling requirements. The analysis must include indirect costs such as change management, training, and ongoing governance overhead that can significantly impact total cost of ownership.

Risk mitigation costs represent another critical factor, as internal development carries implementation risks that can result in delays, cost overruns, and operational disruptions. Service models transfer these risks to providers but may involve premium pricing that reflects this risk assumption.

Ascertaining operational success factors

Successful GCC implementation requires careful stakeholder alignment with senior decision makers, typically CHROs, CIOs, CFOs, and transformation leaders, to ensure clear agreement on objectives, success metrics, and governance structures. This alignment becomes particularly critical when multiple business functions will be supported by the GCC, each with distinct requirements and performance expectations.

Comprehensive capability assessment should evaluate required functions, existing organisational strengths, and gap analysis to inform engagement model selection. This assessment must consider both current needs and future scalability requirements to avoid costly transitions as business requirements evolve.

Compliance preparation demands a thorough understanding of regulatory requirements across target jurisdictions, including employment law, tax obligations, data protection requirements, and industry-specific regulations that may impact operational design. The chosen approach must address these compliance needs while maintaining operational efficiency.

Change management strategies should address cultural integration, communication requirements, and training needs that will facilitate smooth transition to new operational models. This becomes particularly important when moving from internal operations to service provider relationships or when establishing new global capabilities.

Matching the right approach to your business goals

The optimal GCC approach depends on specific organisational requirements across multiple dimensions including time to market needs, desired operational control levels, risk tolerance, and long-term strategic objectives. Immediate capability needs favour service models or traditional outsourcing, while long-term strategic initiatives may justify internal development investment.

Control and customisation requirements significantly influence model selection, with high customisation needs favouring build or co-managed approaches. Standard processes can effectively leverage established service offerings, while critical functions may require greater control than traditional outsourcing typically provides.

Risk tolerance assessment should consider operational, financial, and compliance risks associated with different approaches. Low risk tolerance favoursestablished service providers, while higher risk tolerance may justify internal capability development with its associated implementation risks, but greater long-term control.

Financial constraints and budget structures also influence model selection, particularly regarding the preference for capital expenditure versus operational expenditure and the acceptable timeline for return on investment realisation.

Future-proofing your GCC strategy

The GCC landscape continues to evolve rapidly as organisations increasingly view these centres as innovation hubs rather than cost reduction facilities. This evolution requires different skill sets and operational approaches that may favour service models with established innovation frameworks and access to emerging technologies.

Technology integration, particularly around artificial intelligence, automation, and cloud platforms, demands significant expertise that influences build versus buy decisions based on internal capability levels. Service providers often maintain broader technology expertise and can provide access to advanced capabilities without requiring internal development.

Sustainability considerations are becoming central to GCC operations as organisationsseek to integrate environmental, social, and governance factors into their operational models. This requirement adds complexity to capability planning and may favour providers with established sustainability frameworks.

Are you ready for a consultation?

Zalaris brings twenty-five years of specialised experience in HR, payroll, and finance operations, combining deep functional expertise with governance-first delivery frameworks. Our engagement models transform these critical functions from cost centres into value-driving capabilities that ensure compliance, enable digital innovation, and optimize operational efficiency across global operations.

This experience enables informed decision-making and successful implementation regardless of chosen strategy, supporting organisations such as yours in their transformation to more agile, efficient, and strategically aligned global operations.

Get in touch with us here to ascertain which model is the right fit for your organisation.

Frequently Asked Questions (FAQ)

1. What is the typical timeline difference between building a global capability centre versus using GCC-as-a-Service models?

Building an internal GCC typically requires 18 to 36 months to reach full operational capability, including legal setup, infrastructure development, talent acquisition, and process establishment. GCC-as-a-Service models can achieve deployment within weeks by leveraging pre-established frameworks, compliance structures, and talent pools.

2. How do organisations maintain operational control when using external GCC service providers?

Modern GCC-as-a-Service models offer various governance structures including co-managed operations where clients retain strategic control while providers handle operational execution. Service level agreements, regular reporting frameworks, and shared governance structures ensure operational visibility while leveraging provider expertise and established processes.

3. What are the key cost considerations when comparing build versus buy approaches for global capability centres?

Building requires significant upfront capital investment in legal setup, infrastructure, and talent acquisition, with potential long-term cost advantages at sufficient scale. Service models convert capital expenses to operational expenses with predictable cost structures, typically providing faster return on investment but potentially higher long-term costs depending on service scope and scaling requirements.

4. How do compliance requirements differ between internal GCC development and service provider partnerships?

Building your own GCC requires direct management of all regulatory compliance across target jurisdictions, including employment law, tax obligations, and data protection requirements. Service models typically provide pre-enabled compliance frameworks and ongoing regulatory management, though organisationsretain responsibility for ensuring their specific industry and operational requirements are addressed.

5. What factors should determine the choice between different GCC engagement models?

Key factors include time to market requirements, desired level of operational control, risk tolerance, compliance complexity, budget constraints, and long-term strategic objectives. Organisations should evaluate their internal capabilities, change management capacity, scalability requirements, and the criticality of functions being supported when selecting optimal engagement models.