Enterprises are increasingly turning to global capability centers (GCCs) for more than just cost efficiency. Once regarded predominantly as a collection of back-office service providers, GCCs have evolved into key contributors of innovation, transformation and substantive value. According to ISG Research, nearly a quarter of enterprises are contemplating the establishment of a new GCC in the next 18 months – and 40% aim to expand their existing operations.
But – while demand is on the rise – GCCs that lack strategic oversight can fail to meet expected outcomes. Only 36% of enterprises that have set up or significantly changed their GCCs in the last two years see significant improvement in quality of operations.
Why do so many GCCs fail to meet expected outcomes?
Challenges to Optimal GCC Performance
Here are some common reasons that GCCs don’t always live up to expectations:
- Overly aggressive cost-saving targets: Some organizations establish GCCs with the primary goal of rapid cost reduction. This approach can lead to underinvestment in critical areas such as leadership and infrastructure, ultimately hindering the GCC's effectiveness.
- Inadequate investment in leadership: Strong local leadership is critical for the success of a GCC. Insufficient investment in putting experienced leaders on the ground who understand both the local context and the company's culture can lead to operational challenges and strategic missteps.
- Lack of strategy: Organizations with poor strategic foresight face significant challenges. Mistakenly assuming that global brand recognition will automatically translate to local success can hinder effective talent acquisition and retention. Poor communication between headquarters and the GCC, as well as faulty benchmarking that neglects local dynamics, can exacerbate these issues.
Establishing a GCC requires a significant investment in time and money. To see a return on that investment, strategic oversight is imperative. A strategy realization office (SRO) is vital to making sure a GCC achieves its goals.
What Is a Strategy Realization Office (SRO)?
An SRO serves as a bridge between enterprise leadership, business units and vendors to ensure a seamless partnership, as outlined in Figure 1 below. The enterprise makes pivotal decisions concerning scope, budget and timelines, while a multi-vendor framework delivers services per contractual obligations. The SRO operates closely with the enterprise leadership to align strategic objectives and ensure the GCC delivers quantifiable value. At the same time, the SRO collaborates with vendors and delivery partners to ensure compliance with contractual agreements and ensure timely and budget-conscious delivery of the defined scope.
Through effective steering, performance tracking and quality assurance, the SRO guarantees that the GCC is established with the best chances of success, achieves desired business outcomes and maintains stakeholder alignment.
Figure 1: How an SRO Works in Practice
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How an SRO Can Make a GCC Successful
To help a GCC achieve its goals, an SRO does the essential work of providing clear direction, ensuring alignment and lighting the way to operational excellence. This requires expertise in transition and transformation governance, solution delivery risk and issue management, business value management and organizational change management.
Figure 2: The Four Components of an SRO
An SRO should be structured around the following four critical components.
Strategic Alignment
The SRO should be prepared to share the market perspective and validate the roadmap for GCC implementation. It should ensure that the GCC is aligned with strategic business goals while prioritizing high-value initiatives and has what it needs to build the appropriate data-gathering infrastructure to facilitate long-term strategic decision-making. The goal of the SRO is to provide strategic guidance aligned with organizational vision and objectives.
Transformation Governance
The SRO should have the tools and authority to monitor program progress and deliver key performance metric reports. It should use data insights to proactively manage and minimize risks and identify, track and resolve cross-workstream dependencies. The SRO will need to support environmentally sustainable strategies in the planning, design and implementation of IT systems and validate governance practices to ensure operational excellence, fairness and integrity.
Benefits Realization
The SRO should be empowered to continuously monitor expected value against the business case, milestones and KPIs. The journey toward achieving outcomes is ongoing, so measuring progress should be, too. Prioritize outcomes that are focused on enhancing revenue, saving costs and improving customer satisfaction. The SRO should ensure operating models are leveraging best practices to optimize overall performance and solutions are customized to meet organizational needs.
Organizational Change Management
The SRO must articulate a clear vision for change, engage stakeholders through effective communication and conduct change impact assessments to identify challenges. Additionally, implementing feedback mechanisms and establishing metrics will be essential to monitor progress and measure the success of change initiatives in alignment with GCC objectives.
The 5-Step Framework for Building a Successful SRO
An effective GCC is built on an SRO that operates with a structured methodology emphasizing alignment, collaboration and execution of GCC goals. By clearly defining objectives, fostering stakeholder engagement and ensuring accountability, organizations can drive seamless integration and value realization. This section outlines the key steps on how to set up an effective SRO, enabling GCCs to achieve operational excellence and long-term strategic success.
- Align strategic objectives:
- Collaborate with business sponsors to define specific, measurable and time-bound objectives for the GCC. By fostering discussions around these specific goals and their alignment with business priorities, stakeholders can ensure that efforts are not only unified but also strategically focused, facilitating tangible, meaningful impact on organizational transformation.
- Align the GCC’s goals with business priorities through workshops, strategic frameworks and performance metrics.
- Establish governance:
- Establish a value measurement framework to ensure accountability, with defined roles and responsibilities for decision-making on scope, budgets and timelines.
- Create clear accountability and reporting structures through a value management framework.
- Integrate stakeholders:
- Act as the critical link between enterprises, business units and providers to foster strong and seamless communication.
- Work closely with IT teams, business units and delivery partners to integrate processes, tools and people, ensuring everyone works together effectively.
- Implement a value-driven approach:
- Develop a robust business/value case to prioritize initiatives based on strategic importance, ROI and inherent risks.
- Steer provider actions and deliverables to meet contractual obligations while monitoring quality, timelines and budgets to drive desired business outcomes.
- Monitor and optimize:
- Ensure all efforts align with the broader strategic vision of the GCC and encourage innovation to maximize value realization.
- Use feedback, benchmarks and KPIs to gauge progress, make requisite adjustments and guide the organization toward its full potential.
Top 5 Benefits of Strategy Realization Office for GCCs
The following five benefits are crucial for organizations aspiring to achieve their GCC goals:
- Maintain executive alignment: The SRO helps ensure that leadership is aligned on the transformation objectives, which is crucial for guiding initiatives and maintaining focus.
- De-risk adoption of new technology and business models: By providing structured oversight and risk management, the SRO mitigates the risks associated with introducing new technologies and business models.
- Build a solid foundation for success: The SRO establishes frameworks and processes that create a solid foundation for a GCC.
- Value-based oversight: The SRO ensures that all efforts for GCCS are monitored for their value contribution, leading to better decision-making and resource allocation.
- Achieve adoption and GCC results: The SRO facilitates the adoption of new practices and technologies, ensuring that the anticipated GCC results are achieved.
According to 2025 ISG Market Lens survey on GCCs, the most common enterprise objectives for a GCC start with reducing staffing costs, improving productivity and reducing facility costs. (See Figure 3 below). Achieving these objectives and integrating the GCC into the broader organizational framework requires not only careful planning and execution but also robust oversight. Enterprises that go it alone in setting up a GCC can fail to meet their objectives.
Figure 3: Top Enterprise Priorities for GCCs
When an enterprise uses the help of an advisor in setting up or making changes to a GCC, it can become an important strategic asset. Establishing a competent SRO that supports and monitors the GCC can be the difference between return and no return on that investment. By prioritizing value, innovation and strategic alignment through the SRO, organizations can maximize the potential of their GCCs.
ISG specializes in helping enterprises navigate the complexities of managing GCCs and setting up an effective SRO to ensure their goals are met. If you’re struggling to get the most out of your GCC, don’t wait until inefficiencies cost your organization millions of dollars. Contact ISG today to build a high-performing SRO that ensures success.
About the authors
Nivesha Parwar
Naveen Mohanan
Naveen leads the Strategy Realization Office capability for UK&I driving business value from client transformations. With over 10 years of experience, he's led large business, operating and technology model transformations, advising CXOs on IT strategy, business process redesign, program management, benefit realization and change adoption. His experience spans industries such as Banking and Financial Services, Insurance, Consumer Goods, Technology and Retail.
