Part of a Series: Building and Running a World-Class Global Capability Center
In Article 1 of this series, we made the case for owning your offshore capability through a company-managed Global Capability Center rather than relying on vendor-managed ODCs or staff augmentation. The economics and control advantages are substantial. But once you have decided to build, the next strategic question is where — which countries, which cities, and how many centers you actually need. This is not a decision to outsource to a consultant with a generic city-ranking spreadsheet. Location drives your cost structure, your talent profile, your time zone overlap with the US, and your ability to scale. Get it wrong and you will spend years compensating for a bad geographic bet.
I have established or significantly grown GCCs in Montreal, Chennai, Hyderabad, Bangalore, Sofia, Bucharest, and Cluj — each chosen after months of market research. The criteria are consistent even when the answers differ: labor cost, workforce size and quality, English prevalence, government support, geo-political risk, transport, and weather. This article walks through how to think about the regional decision first, then drill down to specific cities.
The Regional Decision: India, Eastern Europe, and Latin America
India has the largest and most mature IT and BPO workforce at the lowest price points available anywhere — typically 70 to 80 percent less than equivalent US roles. Round-the-clock BPO coverage is widely available. IT resources are best kept within an 8am to 12am local window; you can find staff for overnight shifts, but they will not be your strongest talent and they will spend considerable time looking for a better slot. If you need a very large center — thousands of FTEs — India may be the only viable choice. English is widely spoken. The tradeoff is time zone: the overlap window with US East Coast staff is narrow, so one side is always up early or late. That does not make collaboration impossible — self-contained squads in one location work well — but distributed teams meeting at midnight three times a week will not sustain productivity.
Eastern Europe offers extremely high-quality IT talent with problem-solving skills well above average, including strong concentrations in AI, data science, and other niche skills. Workforces are smaller but more than adequate for medium-sized centers — Romania alone has roughly 240,000 IT professionals. Cost runs 50 to 60 percent below US levels, approximately twice the cost of India. English is widely spoken, and the natural 2 to 4 hour overlap with US time zones makes real-time collaboration straightforward.
Latin and South America carries similar cost to Eastern Europe but with smaller and less mature IT and BPO workforces. English is not as widely spoken. The advantage is near-complete US time zone overlap — attractive when continuous inter-team communication is a hard requirement, particularly for BPO functions.
The Philippines has mature call center, HR, and finance services with English widely spoken. Other service lines are less mature but growing. Many organizations already outsource there; bringing those functions in-house is a natural GCC entry point.
More than half of the world's GCCs are in India, with most of the remainder in Eastern Europe, the Philippines, and Latin America. I do not expect that distribution to change materially even as the GCC market grows from roughly $145B today to $300B or more by 2032. For optimal budget impact, India should be part of the mix for most organizations. If time zone overlap with the US is important for IT collaboration, Eastern Europe should be part of the mix as well.
How Many GCCs Do You Need?
An early decision is how many GCCs to create. Your current vendor footprint is the starting point: if you already have offshore contractors in India, bringing them in-house is the obvious first move. Add the roles you plan to transition from onshore, and you have your maximum center size.
For GCCs under 1,000 FTEs, most countries have sufficient workforce for a successful launch. Above 10,000 FTEs, smaller and some medium-sized countries drop off the list. Global companies with existing subsidiaries in a country can often piggyback GCC strategy on those locations when workforce size, language, and geo-political risk criteria are met.
Plan for growth you cannot yet see. When we developed the original MassMutual GCC strategy in Q4 2019, we projected 600 FTEs in India and 150 in Romania. Within three years those numbers had grown to 2,400 and 650 respectively. We had clearly underestimated demand — and were fortunate that our buildings had space to expand. I recommend defining minimum, probable, and maximum FTE counts and planning real estate accordingly. Holding additional space for probable growth is inexpensive relative to labor savings; rents in Hyderabad run $12 to $16 per square foot annually, Romania $20 to $30.
Choosing Cities in India
If India is part of your footprint — and for most organizations it should be — city selection matters.
Bangalore has one of the largest and most mature IT workforces in India. Every skill set is available. It is slightly more expensive than cities like Chennai and Hyderabad, competition for talent is higher, and traffic is terrible even by Indian standards.
Chennai offers another large, mature workforce at lower cost than Bangalore. It carries more geo-political disturbance — city-wide protests and strikes occur with some regularity — and poor drainage means frequent storms cause flooding. Plan for work-from-home capability several days per year. You can build a successful GCC in Chennai; just plan for disruption.
Hyderabad is my favorite location for a new GCC in India and where I established MassMutual India. HITEC City is a relatively new district where GCCs cluster. The workforce is as deep as Bangalore with far easier transport thanks to the Ring Road. The state government is business-friendly and eager to help new entrants. I recommend any company establishing a new GCC in India put Hyderabad on the short list.
Pune shares many of Hyderabad's attributes at slightly higher cost — another strong short-list city.
Delhi and Mumbai carry higher salaries and less IT focus than HITEC City, but unless you are building a very large center, talent is sufficient.
Two practical considerations: if you are rebadging vendor contractors into your GCC, locate in the city where most of those contractors already work. Indian citizens rarely relocate across regions — establishing in Hyderabad when your contractors are in Delhi will produce transition attrition. If your company already has an Indian subsidiary, co-locating the GCC there is often sensible.
Choosing Cities in Eastern Europe
When I needed a subset of roles with time zone overlap to US Eastern time for MassMutual, extensive market research — including work I had conducted at the World Bank — led me to Bucharest, Romania. Many Eastern European countries have strong IT talent; when you weigh workforce size, cost, culture, and geo-political risk together, Romania rises quickly. Poland is equally strong today; salary differences that favored Romania five to ten years ago have largely evaporated. Slovenia, Croatia, and the Czech Republic work well for a few hundred roles. Ukraine, Moldova, and Belarus carry too much geo-political risk. Bulgaria offers high quality at lower cost than Romania, though the Cyrillic alphabet adds translation overhead for business documents.
Romania taught us something India does not: skills concentrate by city. In India, a given skill tends to spread across major hubs. In Romania, AI, machine learning, data science, and blockchain concentrate in Cluj; hardware design and device drivers in Timisoara; retail and payment technologies in Iasi. Bucharest has broad general IT talent. Shortly after opening Bucharest, we added a Cluj center to access leading-edge technology skills and two major universities in the area — a strategy amendment we had not anticipated in the original plan.
Latin America and Other Options
For organizations requiring US time zone overlap or bilingual English/Spanish capability, Latin America is worth serious evaluation. Mexico City, Guadalajara, Monterrey, Bogota, Sao Paulo, and San Jose (Costa Rica) are the primary GCC cities. Historically BPO-heavy, Guadalajara is often called the Silicon Valley of the region and IT services are maturing rapidly. Pricing is roughly comparable to Eastern Europe — about twice India.
What Comes Next
Location selection is strategic work, but it is not infinite analysis. Several months of focused market research — or access to one of the commercial city-comparison databases covering 200 to 300 global cities — is sufficient for most organizations. The MassMutual decisions were Hyderabad for scale and cost, Bucharest for US time zone overlap, and Cluj for specialized technology talent. Your criteria will differ, but the framework is the same.
In Article 3, we roll up our sleeves and walk through the operational runbook — legal entity creation, real estate, buildout, talent sourcing, vendors, knowledge transfer, and change management. That is where GCC programs succeed or fail in execution.