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Episode 46

Leveraging Global Competency Centers (GCCs) for Designing, Building, and Supporting Digital Learning

Brief description of the episode

Acky Kamdar, CEO of Magic EdTech is joined by Ashish Malhotra, Founder of Ampalyst LLC, on this Tech in EdTech episode. Ashish discusses the benefits and challenges of setting up GCCs and emphasizes the importance of a holistic business case that aligns with leadership aspirations and factors like talent management, change management, and political risk. The episode provides valuable insights for edtech companies and universities considering whether a GCC could be a strategic fit for their organization.


Key Takeaways:

  • Use a restraint-based regulatory regime. Audits like SSAE 18, SOC 1, and SOC 2 are crucial for finance work outsourcing. Adhere to data privacy constraints, with rules like GDPR being applicable, particularly in the European regime—specific compliance requirements for medical work, such as adherence to HIPAA.
  • Account for restrictions on offshore locations, particularly for specific tasks, such as working for the Department of Defense (DOD).
  • Ensure compliance with international standards, including ISO 27000 and ISO 27001, often mandatory for data privacy certification. Note that regulatory requirements are well-documented, publicly available, and widely implemented.
  • Take into account incentives provided by the local government to stimulate job creation. Evaluate local laws, contract enforcement duration, and the frequency of taxation events throughout the year. Incorporate these considerations into the initial location assessment to determine the suitability of the destination for the GCC.
  • Establishing your own GCC allows you to engage providers with expertise in specific areas, such as finding suitable real estate and building customized office spaces aligned with your culture.
  • In addition to existing vendors, setting up a GCC might involve collaborating with new providers who specialize in unique aspects essential for brick-and-mortar establishment.
  • While leveraging existing vendors is common, there’s an opportunity to challenge them to bring more to the table in helping build your facility. However, careful messaging is crucial to avoid conflicts of interest.
  • Developing a global resource strategy and workforce, including setting up a GCC, is deemed simple when guided by a clear vision and well-documented aspirations, but the cost of getting it wrong can be significant.
  • Consider overhead costs, such as cafeteria and team services, and amortize non-billable overheads over the billable resource pool. Optimal amortization is typically around the 200-employee mark.
  • If growth beyond 200 employees is anticipated, setting up your own GCC may be worthwhile. Smaller operations, especially in the 100-150 employee range, may find a provider-partner model suitable.
  • For organizations planning to be significantly larger than the threshold, a hybrid model provides flexibility with both fixed-cost assets and variable-cost resources. Enables adaptability based on evolving needs.
  • The decision between GCC, provider-partner model, or hybrid approach depends on client aspirations and the pace of goal achievement.
  • Seek advice and learn from the experiences of similar-sized companies that have set up GCCs for informed decision-making.
  • Establish GCCs as profit centers with a transparent bill rate, typically 15-20% lower than the market rate. This allows the GCC to drive efficiencies and make local investments, subject to corporate approvals.
  • This advanced approach involves a profit-centered GCC where geography is not a considered factor. Teams in different functions report globally, creating parity and inclusivity among global teams.
  • Ensure global teams are equivalent in thought leadership, service delivery, and performance measurement, fostering inclusivity. Create a globally inclusive and rewarding environment.

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