The next capability centre won't have more seats-it will have more valuable ones

For a long time, the idea of a global capability centre ("GCC") came with a certain image: a large multinational, a dedicated offshore operation and hundreds, sometimes thousands, of employees supporting different parts of the business.

That model is not going away, and it will not define the next phase of capability centres. 

What is becoming more interesting is what happens further down the market. Smaller companies are beginning to ask many of the same questions that large enterprises asked years ago. Where can we find the skills we need? Which capabilities really must sit in the head office? Which functions could be built elsewhere without losing control, quality or accountability?

We can already see signs of this change. The latest Nasscom-Zinnov study of India's GCC landscape counts 2,117 global capability centres, including 583 operated by mid-market companies. The Philippines has also become an established GCC location. According to the IT & Business Process Association of the Philippines, around 270,000 people in the country now work in GCCs.

The model is moving down-market 

The key question is what size this model needs to reach before it starts to make sense.

Many small and mid-sized companies do not need a thousand-person operation. They may not even need a hundred people in one function. What they often do need is a small team with specialized knowledge that understands the business, works closely with the company's own people and takes responsibility for an important capability over time.

I think of this as a micro-GCC.

The important point is not the team's size, but how it operates. A team of 20 or 30 specialists can still play a significant role if it is properly integrated into the organization and has a meaningful capability.

That is also what separates this model from the way outsourcing has traditionally been understood. Outsourcing often begins with a process: what work can we transfer to another provider? A capability-centre mindset starts somewhere else: what capability does the company need to build, and how do we create the right team around it?

For a technology or telecommunications business, that could mean cybersecurity, software testing, finance operations, data analytics, technical support or SaaS implementation. These are not simply queues of work to be completed. They require people who understand the company, its systems and the context in which decisions are made.

AI changes the maths

Technology is making this smaller model much more practical. In the past, offshore operations depended heavily on scale because infrastructure, management and quality-control costs needed to be spread across many people. Cloud platforms and digital collaboration have already reduced much of that friction. AI is changing the equation again.

I do not think the useful way to talk about AI is simply in terms of replacing people. Businesses will have to work out the right combination of people, processes and technology. Some repetitive and rules-based work will certainly be automated. But that also means people can spend more of their time on work requiring judgement, expertise, problem-solving and accountability.

A relatively small specialist team can therefore do much more than it could even a few years ago. A cybersecurity team can work with AI-assisted monitoring tools. A software implementation team can automate parts of testing and documentation. Finance specialists can remove repetitive processing and focus more on analysis and exceptions.

In each case, technology increases the capacity of the team. It does not remove the need for the capability.

Why this matters for smaller companies

This matters because the potential market is much larger than the traditional enterprise sector. The Asian Development Bank's 2025 SME Monitor found that micro, small and medium-sized enterprises account for an average of 99.8% of enterprises across the 26 Asia-Pacific economies it covers.

Most of these businesses will never build a conventional GCC. But many face the same skills constraints as much larger companies.

A growing software company may need implementation specialists in another region, but not an entire local organization. An engineering company may need a permanent group of designers or analysts without having enough demand to build a large captive operation. A mid-sized company may need stronger cybersecurity capability, but struggle to recruit the right people locally. For example, a Canadian growth-stage company expanding internationally may need the same thing: capability built quickly, without the cost and complexity of standing up an entire offshore office.

In situations like these, moving jobs offshore is only part of the consideration. The bigger issue is whether a specific capability can be built elsewhere and still function as a genuine part of the business.

There are a few caveats of course. Not every small offshore team should suddenly be described as a GCC. If a team is going to operate as an embedded capability, there needs to be clear ownership, good governance, secure access to information and a strong understanding of how it fits into the wider organization. Some high-volume functions will continue to benefit from scale, while sensitive or regulated work may require a different structure.

Capability matters more than headcount

So the argument is not that the traditional GCC disappears. It is that the underlying model becomes available to many more companies.

For years, offshore strategy was largely a headcount conversation. Businesses asked how much work could be moved, how many seats were required and how much could be saved.

I think the next conversation will be different. Companies will ask what they actually need to be good at, where they can find the people to build that capability, and how technology can allow a smaller specialist team to operate effectively alongside the rest of the organization.

The next capability centre may not have a campus. It may not have a thousand seats.

It may simply have the right people, doing the right work, in the right operating model.