There’s a growing assumption in the market that AI will replace the need for global capability centers (GCCs). At surface, the logic seems straightforward: If AI can write code, automate workflows, generate content, test software, and support customers, why would companies continue to build out large global delivery teams in India or LATAM?
However, this narrative misses what’s actually happening on the ground.
Yes, AI changes the dynamics of how services are delivered. Yes, certain repetitive tasks that have traditionally been performed in offshore development centers will continue to get automated. Yet people, and especially those who know how to harness AI (not just use it), will be very much needed. All one has
Skilled professionals will still be needed to train and manage AI systems; to orchestrate and manage agentic workflows; to govern models and data; to integrate AI into enterprise systems; and secure those systems from AI-driven threats. Human judgement and ingenuity will be needed to redesign business processes to not just do things faster and cheaper, but to come up with entirely new experiences and revenue streams.
In this reality, GCCs aren’t going away. Instead, they’re shifting from centers of labor arbitrage to centers of AI adoption and innovation..
Modern GCCs Become AI Innovation Labs
The best GCCs have always been more than just support organizations. However, more and more are moving away from being measured purely on cost savings and ticket throughput, and more on the AI solutions and capabilities they can bring and the customer outcomes they can drive.
GCC builders, which include both large multinational businesses and mid-size services firms, are leaning on GCCs to help:
- Conceptualize and prototype AI use cases
- Industrialize copilots and agents
- Build reusable automation patterns and productized IP
- Translate enterprise data into differentiated products and workflows
GCCs in traditional offshore locations like India, Brazil, Mexico, Kenya and South Africa are getting support from governments that are actively trying to reposition their countries to capitalize on the AI boom. These countries are building out AI compute infrastructure in the regions, establishing programs and partnerships with universities and trade organizations to advance workforce AI and ML skills development, and they’re providing tax and economic incentives for multinationals to build AI R&D centers in the region.
Perhaps none more so than India, home to more than 1,800 GCCs, and some of the largest IT services providers in the world. Firms like TCS, Infosys, HCLTech, Wipro, and Tech Mahindra, which collectively employ more than 1.5 million people. India and the large services firms that are based there understand that the traditional labor-based, time & materials business model are under attack. It’s why they’re investing billions into building IP and AI-enabling their workforce, and why foundational AI firms like Anthropic and OpenAI are expanding partnerships and presence in India.
Access to Affordable Tech Talent
GCCs have always been a way for companies to access affordable tech talent at scale. That doesn’t change, and labor arbitrage is still a lever that most companies use to increase competitiveness and profits.
Elite AI, data, cloud, cybersecurity, and product engineering talent remains scarce and expensive in domestic markets. This talent scarcity could actually benefit GCCs that not only have access to large pools of talent, but have also spent years honing their internal processes around apprenticeship and technical education. The best GCCs are adapting those processes for the new type of work required in the AI era.
In the previous generation of offshore, work was often decomposed, documented, and handed off. In the AI era, work is more experimental and cross-functional. It requires a deeper understanding of business processes, different data environments, how the model/tooling landscape is evolving, and the risk and governance requirements to work at enterprise scale.
Which is why the GCCs we believe will be most likely to thrive in the AI era will:
- Build full-stack engineering and platform expertise
- Invest heavily in AI training and talent reskilling
- Build smaller teams with dramatically higher leverage through AI and automation
- Focus on outcomes rather than headcount
- Specialize in specific platforms, capabilities and industries
These traits and capabilities are what separate transactional offshore providers from true strategic capability partners.
BOT Consulting (disclosure: a client of Tercera Advisory) is a great example of a modern GCC. BOT builds next-gen delivery and innovation teams for high growth software and services firms. They are specialists in AI technologies, data platforms and Systems of Record that are a foundation for much of the AI transformation work happening right now (e.g. Anthropic, Snowflake, Databricks, ServiceNow), and are hiring and training full stack engineers that understand how to put those platforms to work in complex enterprise environments.
BOT’s proprietary Odyssey platform also embeds AI and agentic workflows directly into their operating model, enabling them to hire and onboard more effectively, automate and improve work output, and ensure teams are delivering on core KPIs.
Humans still remain a very smart AI investment.
Not every GCC provider will be able to make the shift, but those that are rethinking their talent, work and operational strategies with AI top of mind, will find they have a competitive advantage. They are the ones who will help customers build operational leverage, scale faster and access the hard-to-find talent without breaking the bank. They might even find these GCCs can build an AI muscle and a training rigor in their own organizations that they might not have had previously.
Rethinking your approach to GCCs?
If you’re evaluating how your global delivery strategy should evolve for the AI era, we might be able to help. Tercera invests in and advises the services firms building the next generation of AI-enabled operating models. To learn more about Tercera or our partnership with BOT Consulting, contact us here.