by The shared services market involves a business model delivering services to internal groups in a centralized service organization. Shared services comprises back-office functions such as information technology, procurement, human resources, finance and accounting. Shared services enables consolidation of duplicative activities to synergies benefits and achieve operational efficiencies. The centralized shared services model helps drive process standardization and reduce operational costs.
The global shared services market is estimated to be valued at US$ 187.18 Mn in 2024 and is expected to exhibit a CAGR of 8.3% over the forecast period 2024 To 2031.
Key Takeaways
Key players operating in the shared services market includes Dell Inc., Curtiss-Wright Corp., Getac Technology Corp., General Dynamics Corp., Zebra Technologies Corp., L3 Technologies Inc., Panasonic Corporation, Scio Teq, Sparton Corp., Crystal Group Inc., Kyocera Corp., and Beijer Electronics Group AB. Key players are focusing on partnerships, product launches and mergers & acquisitions to expand their shared services capabilities and geographic footprint.
There is high growth opportunity in industries such as manufacturing, healthcare, defense and government verticals. Emerging technologies such as Internet of Things, robotics, and artificial intelligence is driving the need for shared services. Technological advancements such as cloud computing and big data analytics has enabled organizations to scale up operations through Shared Services Market Trend
Market drivers
The key driver for the shared services market is the need for operational efficiencies and cost optimization. Shared services model helps consolidate duplicative activities, achieve economies of scale, and reduce costs through centralized process execution. Standardization of processes and functions enables improved productivity, resource optimization and data accessibility. Centralization of back-office operations frees up internal resources to focus on core business priorities. Regulatory compliances and governance challenge are easily managed through a unified shared services structure.
Current Challenges in Shared Services Market
The shared services market is facing several challenges currently due to the ongoing shifts in business models and technology innovations. The pressure to reduce costs and gain operational efficiencies has increased complexity in sharing services across business units and geographies. Lack of proper governance structures and performance metrics is another significant challenge as it becomes difficult to measure the success of shared services. Data security and privacy concerns have also risen with more services being centralized and handled by third-party shared service centers. Changing customer expectations and demand for customized solutions is putting pressure on shared service providers to be agile and responsive. Attracting and retaining talent with emerging technology skills remains a challenge due to high competition for critical skills.
SWOT Analysis
Strength: Centralization of common transactional processes allows achieving economies of scale. It standardizes operations and provides control over costs.
Weakness: Significant upfront investment required in infrastructure and resources. Transition to shared services model needs changes in management structures and mindsets.
Opportunity: Growing demand for outsourcing non-core functions provides scope for managed services. Emerging technologies like cloud, analytics can help enhance efficiencies.
Threats: Intense competition among shared services providers compels constant innovation. Disruption due to new business models like platform economy.
Geographical Regions
North America currently holds the largest share in the shared services market in terms of value, primarily driven by organizations in the US leveraging such models. The presence of global companies and well-established shared services centers in cities like Atlanta, Chicago, Detroit, New York supports the region’s dominance.
Asia Pacific is poised to be the fastest-growing regional market for shared services during the forecast period from 2024 to 2031. Countries like India, China, and the Philippines are becoming major hubs for offshore shared services due to availability of skilled resources at competitive costs. Rapid digitization, business globalization, and infrastructure investment are boosting the demand for digital shared services in Asia Pacific.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
