Global Capability Centers: Key Hotspots and India’s Rise as the GCC Capital

As per these derivations, the total cost of operating a 1000-member GCC operations team in San Francisco (USA) is estimated to be USD 186,214 per employee. San Francisco is the most expensive amongst our comparable universe of cities. On the contrary, the South Asian region is amongst the cheapest to operate a GCC. For instance, the same cost for Bengaluru stands at USD 33,083, which is less than one-fifth the cost applicable in San Francisco.

When benchmarked to San Francisco, some cities within the USA such as New Jersey, Dallas, Austin and Atlanta are much cheaper, commanding only 55-70% of TCO applicable in San Francisco. Those USA cities that are close on the heels of San Francisco include New York and Boston that are merely ~20% cheaper to operate from. Outside of the US, the Central European cities of Warsaw and Budapest are much cheaper, costing merely 17-25% of the cost prevailing in San Francisco. Cities in Central and Southern America such as San Jose and Bogota also fall in the same range as Central Europe. The six metropolitan cities of India, however, that also hosts bulk of the GCCs that are present in India, account for merely 17-18% of the TCO applicable in San Francisco, rendering them the cheapest of all GCC countries worldwide.

TCO Analysis for GCC operations with 1000 employees: San Francisco & Bengaluru

Total Cost of Operations (TCO) per employee

Talent cost (% of overall TCO)

RECO (% of overall TCO)

Cost Items

San Francisco

$186,214

87%

13%

Total Cost of Operations (TCO) for a 1000-member GCC across cities (Base city = San Francisco = 100%)

Bengaluru

$33,083

89%

11%

120

Note: RECO = Real Estate Cost of Operations, includes Office Rent, CAM, fit-out and facility management expenses as per C&W internal research. Talent costs have been procured through secondary research and validated from human resource consultants.

100

80

The biggest component of this derived TCO analysis can be attributed to talent (87-90%), followed by the real estate cost of operations (RECO), which stands at 11-13% for both, San Francisco and Bengaluru. Baring few cities out of the 20 that we compared, this cost bifurcation broadly remains in the similar range.

60

40

20

-

12

13

GLOBAL CAPABILITY CENTERS:

Key Hotspots and India’s Rise as the GCC Capital