In today’s rapidly evolving business landscape, Global In-house Centers (GICs), once known as “captives,” are making a comeback. This resurgence is driven by several factors, from post-pandemic cost pressures to the shifting nature of technology stacks. What’s especially interesting is how companies—both large and small—are re-evaluating the traditional offshoring model.
Why GICs Are Gaining Momentum
Historically, offshoring was dominated by third-party service providers, but a few shifts in the global business ecosystem are leading companies to build and expand their own in-house capabilities. Here are some of the key reasons:
Technology and the Need for Persistent Teams
As businesses become more digitally driven, technology stacks—once considered non-core—are now central to operational strategy. This shift is leading many companies to rethink their reliance on third-party providers. While third-party models are built on workforce churn and managed processes, today’s businesses need continuity. Persistent teams that grow and deepen their expertise over time are crucial, particularly in engineering and tech services. The longer these teams stay, the more valuable they become. GICs provide companies with the control needed to build and retain these specialized teams, something third-party providers struggle to deliver in the same way.
Post-COVID Economic Pressures
The pandemic accelerated the need to cut costs while doing more with less. This is especially true in industries where labor shortages—particularly in IT and engineering—are pushing companies to tap into global talent pools. Offshore labor markets in countries like India, the Philippines, and Eastern Europe are well-established, offering a broad base of highly skilled professionals. For companies that require these capabilities but face domestic labor shortages, the appeal of GICs is clear.
Lower Costs, Lower Risks—Even for Smaller Companies
Setting up a GIC used to be a complex and costly endeavor, often requiring companies to have 1,000-2,000 employees to make the economics work. However, today, even smaller firms with just 30-40 people can establish GICs. The risk and cost are much lower thanks to mature markets, a skilled talent pool, and robust infrastructure in key offshoring hubs. What used to be an option only for large enterprises is now accessible to smaller players who see the benefit of having more control over their operations.
Balancing GICs with Third-Party Services
While the rise of GICs is undeniable, this doesn’t signal the end of third-party service providers. Companies will still need strong external partnerships, particularly for long-term operational platform support. As GICs grow, the overall market for third-party services is likely to expand, even though their share of the offshoring landscape may decrease slightly.
This evolving balance suggests that, for many companies, a hybrid model—combining in-house and outsourced capabilities—will be the most effective strategy. GICs offer control and depth of expertise, while third-party services can provide scalability and additional support as needed.