Introduction

In the last two decades, Global Capability Centers (GCCs) have become the key drivers of innovation, operational excellence, and expansion for global companies. Previously considered cost-reduction outsourcing departments, GCCs are now transforming into strategic tools that drive digital transformation as well as product creation. As the centers assume more crucial functions, User Experience (UX) design has emerged as an anchor in their success. This blog explores how UX design is transforming GCCs, why it matters, and how it can be effectively integrated to drive business outcomes. Backed by statistics from renowned sources, we’ll delve into the challenges, opportunities, and the role of AI in enhancing UX for GCCs, culminating in a call to action for CXOs to prioritize design as a differentiator.

What are GCCs and Why Are They Important to Global Enterprises Today?

Global Capability Centers (GCCs), or Global In-house Centers (GICs), are fully owned centers where multinational firms build locations with rich talent pools to harness cost benefits, acquire specialized expertise, and achieve operational excellence. Everest Group states that more than 300 GCCs were created in offshore and nearshore destinations in 2023, and the trend is likely to persist (Everest Group). India, which is a prime hub, is expected to have between 2,400 and 2,550 GCCs in 2030, adding $110 billion to the economy (LinkedIn Pulse). GCCs are critical for international firms owing to a number of significant advantages:

• Cost Effectiveness: Performing business within areas with lower labor costs enables companies to save on costs without compromising quality output.
• Access to talent: GCCs leverage enormous talent pools of qualified professionals, especially in technology and engineering, necessary for driving innovation.
• Innovation Hubs: New-generation GCCs are becoming centers of excellence, developing strengths in AI, machine learning, and blockchain, and generating intellectual property.
• Operational Excellence: By consolidating functions such as IT services, R&D, and customer support, GCCs simplify operations and enhance efficiency.

The high growth of GCCs highlights their strategic significance, as 78% of companies concentrate on creating superior talent pools and 55% seek to spark radical innovation (Draup).

Why UX is Becoming a Critical Lever in Their Transformation

As GCCs shift from cost centers to strategic centers, UX design has been a key driver in their transformation. GCCs are now charged with creating products and services that compete in global markets with high user expectations. UX design, which targets the creation of relevant and meaningful experiences, is the key to filling this requirement.

Some of the major reasons why UX is important for GCCs are:

• Shift to Strategic Roles: GCCs are shifting out of back-offices to take charge of product development and digitalization. UX makes products competitive and user centric.
• Global User Bases: Products for various markets need to be culturally resonant, and UX design addresses this through user research and localization (GeeksforGeeks).
• Competitive Differentiation: In saturated markets, high-quality UX can differentiate products, driving customer satisfaction and loyalty.
• Cost Efficiency: User-friendly designs eliminate the requirement for customer support, decreasing operational expenses.
• Stakeholder Alignment: UX supports product development according to user requirements, guaranteeing stakeholder objectives are achieved.

The implementation of UX design in GCC operations is increasingly becoming a requirement to stay competitive, as seen with the increasing need for specialist skills such as UI/UX design in GCCs (Draup).

Building Design-Led GCCs: How and Why

A design-driven GCC incorporates UX design into its business strategy, keeping users in mind at every stage of product development. This makes products not only functional but alsodelightful, which drives business success.

Why Build Design-Led GCCs?

• User-Centric Products: Focusing on UX yields products that satisfy user needs, leading to higher adoption and satisfaction.
• Innovation: Design thinking promotes creativity, which translates into innovative solutions that differentiate GCCs in the market.
• Efficiency: Early usability issue detection decreases rework and development expenses.
• Brand Reputation: Quality UX improves brand image, drawing customers and partners.

How to Build Design-Led GCCs?

• Create a Design Culture: Educate employees in design thinking and foster cross-functional collaboration to instill UX principles.
• Invest in Talent: Bring in competent UX designers and researchers to lead user-focused development.
• Conduct User Research: Utilize interviews, surveys, and usability testing to learn about user needs and preferences.
• Adopt Iterative Design: Use agile approaches to iterative design and iterate products from user feedback.
• Secure Leadership Buy-In: Educate leaders on UX's ROI to secure strategic buy-in.

Examples such as Neiman Marcus Group's GCC in Bengaluru, where the target is to enhance omnichannel experiences, depict the effect of design-led strategies (Draup).

Why UX Design Matters for GCCs

UX design is important for GCCs because it has a direct effect on business results:

• Increased Product Adoption: Easy-to-use products will be adopted, driving market share.
• Lower Support Cost: Easy-to-use interfaces reduce support requirements, reducing costs.
• Better Stakeholder Alignment: UX ensures that products address market needs, aligning stakeholders.
• Competitive Edge: Better UX separates products into competitive markets.
• Global Reach: UX design, such as internationalization, makes products usable for various users (GeeksforGeeks).

Statistics emphasize UX's worth: Forbes has reported a 9,900% return on investment on UX investment, while it is 100 times more expensive to repair UX issues after the product has shipped compared to fixing them upfront (Forbes, UX Planet). Moreover, 80% of users anticipate perfect experiences across devices (Resource Techniques).

UX as a Business Enabler

UX design is a strong enabler for GCCs and influences key performance drivers:

1. Enhancing Product Adoption

• Ease of Use: Simple products, such as Apple's easy-to-use devices, promote high-speed adoption.
• Positive First Impressions: End-users make judgments in a matter of seconds, and first-time UX becomes crucial.

2. Decreasing Support Expenses

• Self-Explanatory Interfaces: Google's search engine is an excellent example of how simple design cuts down on support requests.
• Fewer Mistakes: Good UX reduces end-user mistakes, and support tickets decrease.

3. Boosting Stakeholder Alignment

• Addressing User Needs: UX makes sure products fulfill market requirements, contenting stakeholders.
• Data-Driven Decisions: UX insights align teams around a common goal.

These advantages become concrete results, like cost savings and customer loyalty, making UX a strategic advantage for GCCs.

The Role of AI in UX for GCCs

AI is revolutionizing UX design in GCCs by making it more efficient and effective:

• User Research: AI examines huge datasets to discover user patterns, providing data-driven design.
• Personalization: AI customizes interfaces based on individual tastes, enhancing interaction.
• Automation: AI carries out functions such as wireframe development, allowing designers to focus on strategic activities.
• Predictive Analytics: AI predicts users' needs, producing anticipatory designs.

Call to Action for CXOs

CXOs need to give top priority to UX in GCC plans to unleash their true potential:

• Competitive Advantage: UX provides differentiation for products in saturated markets.
• Customer Retention: Higher UX leads to repeat business.
• Cost Reduction: Self-explanatory designs save on support costs.
• Innovation: UX encourages creative solutions to users' issues.

By investing in UX people, tools, and culture, CXOs have the opportunity to make GCCs innovation leaders in the world.

Design is Not a Department. It's the New Differentiator.

As GCCs transform into strategic drivers, UX design is no longer a nice-to-have- t's a differentiator that leads to success. By integrating UX into their business, GCCs can deliver products that delight users, lower costs, and unite stakeholders. At Happening Design, with our Hyderabad Office in India, a booming hub for GCCs - we are leaders in facilitating UX-led transformation. We do not merely design interfaces; we assist GCCs in imagining new ways of delivering value around the world via best-in-class user experiences. Join us to create a future where design unleashes unprecedented business success.

Key Citations

• Everest Group: Evolution and Growth of Global Capability Centers
• LinkedIn Pulse: Deep Dive into Global Capability Centers
• Forbes: The ROI of User Experience
• UX Planet: Cost of Fixing Usability Problems
• Draup: Global Capacity Centers Drive Innovation
• GeeksforGeeks: Internationalisation and Localisation in UX Design