Why Enterprises that once exited their GCCs are reconsidering their move and what it teaches us
A quiet but strategically significant shift is unfolding in global enterprise operating models. Companies that once exited their Global Capability Centers, either by divesting captives, shutting down India operations, or aggressively pivoting to outsourcing are re-entering the GCC model.
This is not nostalgia. It is not cyclical experimentation. It is a structural correction.
The earlier exits were rational within their time. Many occurred during restructuring cycles or under capital pressure. Others reflected the prevailing belief that large outsourcing providers could deliver superior efficiency and scalability. But the assumptions that drove those decisions have shifted materially. What is driving re-entry today is not labor arbitrage. It is capability ownership.
The Context Has Fundamentally Changed
India’s GCC ecosystem today is institutionally mature. With more than 1,800 GCCs employing nearly two million professionals and contributing nearly $65 billion annually, the country has evolved from an offshore experiment into a global capability backbone.
When captives were first built in the early to late 2000s, enterprises were navigating untested waters. Leadership benches were thin. Governance structures were still forming. Many centers were positioned narrowly as cost-reduction engines. Scaling them into strategic assets required organizational maturity that did not yet exist.
Re-entry today occurs in a fundamentally different environment. The ecosystem now offers experienced GCC CEOs, specialized engineering talent, robust compliance frameworks, and a sophisticated advisory and provider landscape. Enterprises are no longer building in isolation; they are entering an institutionalized ecosystem capable of supporting advanced engineering, digital platforms, AI research, cybersecurity operations, and global finance transformation mandates.
The risk profile is different. The opportunity profile is significantly larger.
Why Enterprises Exited the First Time
Understanding the comeback requires intellectual honesty about the original exits.
During the late-2000s financial crisis and the restructuring decade that followed, many enterprises divested captives as part of balance-sheet rationalization. A well-documented example is UBS, which sold its India captive operations to Cognizant in 2009. At the time, converting fixed cost into variable outsourcing contracts aligned with financial prudence and strategic simplification.
Other exits stemmed from under-designed operating models. Some captives lacked clear mandates, operated with ambiguous decision rights, or were staffed primarily for cost efficiency rather than strategic depth. Over time, this created credibility gaps with headquarters.
There was also a broader strategic orthodoxy: that large service providers, aggregating cross-client best practices, could operate more efficiently than a single enterprise running its own center. For commoditized IT and process functions, this logic often held.
However, what worked for transactional work does not always translate to strategic digital capability.
What Has Changed: The Structural Drivers of Re-Entry
AI and Digital Transformation Require Persistent Capability Ownership
Artificial intelligence and platform-based business models have altered the economics of value creation. AI systems improve through compounding learning loops such as data capture, model training, deployment feedback, and iterative refinement. When these loops are fragmented across vendors, institutional memory dissipates and architectural coherence weakens.
Enterprises increasingly recognize that their digital spine like data platforms, AI frameworks, cybersecurity architecture, and product engineering—must be owned. A GCC provides persistent capability memory, reusable assets, and continuity that multi-vendor ecosystems struggle to deliver.
This shift from “who can execute cheaply?” to “who must own strategically?” lies at the heart of re-entry.
Vendor Economics and Enterprise Economics Are Diverging
Service providers optimize for revenue growth and utilization rates. Enterprises optimize for margin expansion, IP retention, and competitive differentiation.
In stable environments, these objectives align. In AI-driven transformation cycles, they can diverge sharply. Enterprises are finding that core transformation programs - cloud migration, enterprise data unification and digital product engineering require tighter integration and long-term ownership than outsourcing contracts easily allow.
Re-entering the GCC model is often less about cost and more about strategic autonomy.
Resilience and Control Are Board-Level Mandates
Post-pandemic operating realities have elevated resilience to a board priority. Regulatory scrutiny, cybersecurity risk, and geopolitical complexity have increased the importance of controllable global footprints.
A wholly owned GCC provides stronger oversight over sensitive data, compliance frameworks, and technology standards. It reduces layers of third-party risk and clarifies accountability.
Re-entry decisions are frequently justified internally as resilience strategies, not just growth plays.
Empirical Signals of the Re-Entry Wave
The “boomerang GCC” is not theoretical. It is visible in documented cases.
UBS: Divestiture Followed by Rebuild
UBS’s trajectory illustrates classic re-entry. After selling its India captive to Cognizant in 2009 during a restructuring phase, UBS gradually rebuilt its internal India capability footprint. In February 2026, UBS announced the opening of a new Global Capability Centre in Hyderabad with plans to create approximately 3,000 roles over two years, signaling renewed commitment to in-house technology and AI capability.
The original divestment was rational for its era. The rebuild reflects a new strategic context where ownership of digital infrastructure matters more than balance-sheet simplification.
eBay: Exit Commercial Presence, Re-Enter for Capability
eBay presents a different variant of re-entry. In 2017, it sold its India marketplace operations to Flipkart and by 2018, eBay India platform operations were shut down. From a commercial perspective, it had exited India.
In 2025, however, eBay launched a new Global Capability Centre in Bengaluru focused on engineering, AI/ML, data, and product development. It did not return as a marketplace. It returned as a capability hub.
This distinction is critical. Re-entry is no longer about market presence. It is about building the enterprise’s digital backbone in a geography that offers capability density.
Medtronic: Business-Unit-Led GCC Re-Architecture
Medtronic’s recent $50 million investment in a Diabetes Global Capability Centre in Pune represents a modern re-entry signal at the business-unit level. While Medtronic already had India presence, the Diabetes GCC is explicitly structured as a globally aligned capability center supporting digital services, analytics, and operational excellence for the business.
This is not an offshore extension. It is a domain-specific capability anchor.
The implication is subtle but powerful: enterprises are increasingly establishing new-generation GCCs designed around outcome ownership and domain depth rather than generic offshore capacity.
What These Cases Collectively Signal
These examples share common characteristics:
- First, re-entry is rarely framed as cost optimization. It is framed as strategic capability build.
- Second, the mandate is narrower but deeper. Rather than building broad-based offshore centers, enterprises are establishing focused capability hubs such as AI, engineering, digital platforms, domain-specific operations.
- Third, governance models are more explicit. The new GCCs are tied closely to enterprise-level outcomes and often have direct business sponsorship.
This is not a repetition of early 2000s captive models. It is a re-architecture of global capability ownership.
What Enterprises Must Do Differently This Time
Re-entry without redesign risks historical repetition.
A comeback GCC must begin with a clearly articulated capability thesis. The enterprise should define which capabilities must be owned for competitive differentiation and what measurable value the center will create over a three-year horizon.
Sponsorship must sit at the business or CEO level. When a GCC is positioned as a strategic extension of enterprise capability rather than a geographic cost program, its mandate and credibility shift fundamentally.
Decision rights must be codified early. Architecture authority, hiring decisions, vendor integration, and budget thresholds must align with the outcomes expected. Accountability without autonomy remains the fastest path to structural failure.
Leadership density must be front-loaded. Modern transformation mandates require experienced product leaders, cybersecurity architects, AI experts, and program directors from inception. Credibility compounds early.
Finally, enterprises should formally document why the previous captive was exited. This institutional memory prevents repeating design flaws that once undermined performance.
Conclusion: This Is Not a Return to Offshore Arbitrage
The boomerang GCC reflects a recalibration of enterprise control over strategic capability.
Outsourcing remains valuable for elastic scale and non-core processes. But for AI-driven transformation, digital platform ownership, cybersecurity, and domain-specific innovation, enterprises are rediscovering that ownership matters.
Re-entry is not about reversing history. It is about responding to a new strategic environment defined by AI acceleration, platform economics, regulatory complexity, and resilience mandates. The enterprises that treat re-entry as a structural redesign of global capability architecture will build durable advantage.
Those who treat it as a cheaper version of round one risk repeating history.