Budgeting a GCC — what we got right (and what we'd do differently).

In Chapter 1, we walked through how we chose the location. This chapter is about what came next — and what almost every company underestimates: the budget. We spent a lot of time on this together, and one truth shaped every decision we made: most GCCs are cost centers, not revenue generators. That framing changes how you plan.

If a GCC is a cost center, your job isn't to maximize revenue — it's to deliver predictable, high-quality capability at a defensible cost over years. That's a forecasting problem, a discipline problem, and a contracting problem all at once.

Capital expenses vs operating expenses

The first thing we did was split the budget cleanly into two buckets. Mixing them is one of the most common modeling mistakes we see.

Capital expenses (one-time)

These are the costs you only pay to bring the GCC into existence. They tend to be lumpy and concentrated in the first few months:

• Office space — fit-out, furniture, networking
• Hardware — laptops, monitors, headsets, conference room equipment
• Software licensing — perpetual licenses, IDE setups, security tooling
• Recruitment costs — agency fees, signing bonuses, relocation
• Corporate insurance — D&O, professional indemnity, group health
• Branding and identity work — local company collateral
• Incorporation and legal fees

Many of these you pay before a single line of code gets written. Plan for that cash-flow shape — not an even monthly spread.

Operating expenses (recurring)

These are the costs that keep going every month, every year, growing with headcount:

• Salaries and benefits (the dominant line — more on this below)
• Office rentals and utilities
• Learning and development
• Travel and stakeholder visits
• Labor compliance and statutory filings
• Payroll processing
• Finance, tax, and audit services

Once the doors are open, payroll dwarfs everything else. By month six, salaries were 65–70% of our total OpEx and have stayed there.

Three factors that change every line item

When we modeled the budget, we kept coming back to three variables. Adjust any one of them and the whole spreadsheet shifts:

1. Team size and growth shape

We modeled headcount on a three-year forecast — not just "how many people in year one" but "what does the curve look like?" A team that ramps 10 → 25 → 50 has a very different cost profile than 10 → 40 → 50, even if the end state is identical. Front-loaded ramps cost more in onboarding, training, and management overhead.

2. What you outsource vs. keep in-house

For a team in the 10–100 person range, we found a clear pattern that we'd recommend to anyone starting out:

• Outsource: finance (payroll, bookkeeping, audit), hiring agencies, legal compliance, office space management
• Keep in-house: HR business partner functions, culture, performance management

The principle behind it: outsource what's transactional and well-defined; keep what's relational and shapes the team identity.

3. Workforce composition — permanent vs contractor

We kept 15–20% of our workforce on contract during the early stages, for flexibility. Permanent positions were reserved for long-term critical roles — engineering leadership, senior individual contributors, HR, finance. Contractors filled surge needs and let us test the market before making permanent commitments.

Modeling the three-year view

The mistake most companies make is budgeting year one carefully and then "assume 10% growth" for years two and three. That's directionally fine and operationally terrible.

We modeled four variables explicitly across three years:

• Inflation — applied to office costs, vendor contracts, utilities
• Salary increases — the Indian tech market runs 8–12% annual raises on average; budget accordingly, especially for the team you want to retain
• Hardware maintenance and refresh cycles — laptops on a 3-year replacement cycle creates a back-loaded CapEx hit in year three
• Employee attrition — every backfill costs recruitment fees, ramp-up time, and lost productivity. We assumed 12–15% annual attrition, which turned out to be conservative

What we got right

• Splitting CapEx and OpEx cleanly — made the board conversations far easier
• The outsource/in-house split — saved us at least 15% on headcount-equivalent cost in year one
• The 15–20% contractor rule — gave us cushion for the unknowns without diluting culture

What we'd do differently

Three things, if we could rewind the tape:

• Bigger contingency in year one. We built in 8%. Realistic is 15%. Banking delays, registration delays, hiring delays — they all cost real money you didn't plan for.
• Earlier investment in learning & development. We treated L&D as a year-two priority. In hindsight, even small investments in month three pay back fast in retention.
• More explicit modeling of US team management overhead. The US-side cost of managing the India team is real and often invisible in the GCC budget. We'd surface it from day one — it's a fairer comparison and a better business case.

The closing principle

Each GCC setup is unique. Budgets will vary based on the nature of the work and the organizational goals.

What doesn't vary is the discipline: split CapEx from OpEx cleanly, model the three-year curve explicitly, decide deliberately what to outsource, and leave room for the surprises you can't yet name.

If you're building your own GCC budget and want a second pair of eyes, we're happy to share what we've learned — drop us a line at hello@globalcapabilitypartners.com.