The Rent vs. Own Dilemma: Why Boards Are Abandoning Vendors for Global Capability Centers

Every board eventually faces the same question: keep renting capabilities from vendors or build your own? 

The answer increasingly points toward ownership. Vendor contracts that promised 40% cost savings five years ago now deliver half that. Service quality fluctuates with every contract renewal. Your competitors use the same vendors, often the same teams, creating knowledge leakage you cannot control. Meanwhile, companies that built Global Capability Centers report lower attrition, better IP protection, and actual innovation rather than just cost reduction. 

The Scale of Change

India now hosts over 1,700 GCCs generating $64.6 billion in revenue, and that revenue will reach up to $105 billion by 2030. Over 45 new mid-market GCCs opened in India in just two years, representing 35% of all GCCs established during that period. One-fifth of Goldman Sachs staff and one-fifth of the world’s chip designers work in India. And Amazon’s biggest office internationally sits in Hyderabad. 

At Stanton Chase, we’re seeing this calculation play out across industries. A pharmaceutical executive recently told us their vendor costs had doubled over five years through scope creep and contract renegotiations. A bank found their vendor kept rotating team members to other clients, forcing them to retrain new analysts on their specific risk frameworks every few months. We hear variations of these complaints from nearly every client considering a GCC, which explains why so many companies are now building their own operations rather than continuing to rent them. 

Why Ownership Beats Renting

The vendor model fragments accountability. You manage contracts, not capabilities. Outsourced operations see 25 to 30% annual attrition. Every quarter brings new vendor employees who need training on your systems. The expertise that should accumulate over years resets constantly. GCCs cut attrition to as low as 6% because employees build careers with your company, not the vendor. 

Financial predictability improves with ownership too. The ISG 2025 GCC Services Study confirms that captive centers provide more stable cost baselines than outsourced equivalents. CFOs we work with appreciate forecasting based on actual salaries rather than vendor margins. When scope changes, internal teams adjust. With vendors, scope changes mean contract renegotiations and price increases that can negatively impact your original budget. 

Patent protection also becomes absolute rather than contractual in GCCs. Zinnov’s UK-India GCC 2025 Report documents how firms move algorithm development and R&D into GCCs specifically to protect intellectual property. We often advise boards that while execution can be outsourced, innovation ownership cannot. Your next breakthrough product or process improvement should belong to you, not your vendor. 

Industry Readiness Varies

Technology companies built GCCs earliest because distributed development was already their culture. Software and Internet companies account for 44% of new GCCs. Adobe, Google, and Microsoft run product development from India, not just support. Their Indian teams file patents and launch products for global markets. 

Financial services followed quickly, driven by regulatory requirements and data security needs. Banking, or more specifically BFSI companies, employee 25% of India’s GCC workforce. JPMorgan, Barclays, and Deutsche Bank run risk analytics and trading operations from India. In our executive search work, we’re increasingly placing global heads of risk and compliance in Indian GCCs rather than New York or London headquarters. 

Manufacturing companies are speeding up their GCC investment rate too. Engineering R&D GCCs have grown 1.3 times faster than overall GCC growth. Ford’s India centers contribute to global vehicle design and development, while Boeing’s Bengaluru hub carries out advanced engineering and aerospace simulations. We’re helping industrial companies recruit design chiefs who can bridge Detroit engineering culture with Delhi execution capabilities. 

Pharmaceutical companies face particular pressure as well. Drug discovery, clinical trial management, and regulatory compliance require both specialized expertise and absolute data security. Several pharma GCCs have moved from IT support to managing R&D services and generating patents. The sensitivity of clinical data makes vendor relationships increasingly untenable. 

The Readiness Checklist

At Stanton Chase, we evaluate GCC readiness along three dimensions that determine success or failure. Talent availability comes first. India produces 2.55 million STEM professionals annually. At 21%, India’s technology talent demand-supply gap is the lowest internationally. If you cannot find required skills locally, global sourcing becomes necessary. 

Process maturity determines implementation success too. BCG’s research shows companies need at least 20% of processes suitable for standardization. Without documented procedures and clear metrics, a GCC becomes chaos rather than capability. We’ve seen companies rush into GCC development only to discover their processes weren’t ready for distribution. 

Leadership bandwidth matters most, however. Among top-performing GCCs, 70% have at least 16 global roles based in the hub rather than headquarters. The board must commit executive attention, not just capital, to the GCC’s development. We counsel CEOs that GCCs fail without senior sponsorship. The right leader makes the difference between a cost center that processes work and an innovation hub that creates competitive advantage. 

Companies seeking only efficiency might continue with vendors. Those wanting to control their innovation agenda, protect intellectual property, and build global leadership pipelines need GCCs. The executives we place in these centers go beyond managing operations to build capabilities that will define competitive advantage for the next decade. 

About the Authors

Sundar Rajan Ramalingam is a Partner at Stanton Chase with nearly three decades of global leadership experience spanning manufacturing and technology sectors. His career uniquely positions him to guide GCC strategy—he’s led the scaling of a multi-billion-dollar global engineering capabilities division and supported the creation and building of several Global Capability Centers firsthand. Having transitioned from strategic HR leadership to general management with P&L ownership, Sundar brings both the people and business perspectives critical to GCC success. He holds an MBA from XLRI Jamshedpur and completed executive education at Wharton’s Chief Human Resource Officer Program. Based in North America, Sundar serves clients across the US and India, specializing in building high-performing executive teams for technology, professional services, and industrial sectors. 

Chandan Radhakrishna is a Partner at Stanton Chase serving clients in Bangalore, Hyderabad, and Singapore. With 17 years of experience in the GCC and Global Business Services ecosystem, Chandan has advised global enterprises on outsourcing, shared services, and GCC strategy during his tenure at Everest Group and NASSCOM. His expertise in analyzing market trends and delivering actionable insights has helped both enterprises and GCCs navigate complex transformations and refine their business strategies. As a trusted advisor to C-suite executives, Chandan specializes in securing top leadership talent that drives growth and innovation in technology, financial services, and consumer sectors. He holds a degree in mechanical engineering from the University of Sheffield.