Shared services provide centralized and consolidated functional support across various business units in an organization allowing them to focus on their core operations. Shared services offer cost savings through economies of scale by consolidating common business activities like human resources, finance and accounting, procurement, supply chain management, and customer support. Shared services offer better functional management by eliminating redundant tasks and optimizing processes. Digitization has enabled sharing of services remotely for multiple business divisions including field services, maintenance services, logistics services and customer support.
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 2030.
Key Takeaways
Key players operating in the shared services market are 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. Growing outsourcing of non-core activities by enterprises is fueling demand for shared services. Streamlined processes, cost optimization, and centralized information management are some of the benefits driving adoption of shared services. Technological advancements in cloud computing, mobility, artificial intelligence and machine learning are enabling organizations to enhance efficiencies and deliver superior customer experience through shared services.
Market Trends
The market is witnessing growth in specialized shared services centers to handle niche operations for industries like healthcare, manufacturing, logistics and agriculture. Digitization of shared services through cloud, analytics and automation is helping organizations scale processes, gain real-time insights and enhance productivity. Adoption of innovative technologies like IoT, predictive maintenance, telematics and remote asset management is enabling new use cases for shared services in industries like energy, utilities, transportation and construction.
Market Opportunities
Growing outsourcing of finance & accounting activities by SMEs presents an opportunity for shared services providers. Emerging technologies provide opportunities to develop specialized vertical shared service solutions leveraging AI, AR/VR, blockchain and robotics. Optimizing field service operations through mobility and remote management presents an untapped market for shared services providers to enhance customer service levels.
Impact of COVID-19 on Shared Services Market Growth
The COVID-19 pandemic has significantly impacted the growth of the Shared Services Market Share. During the initial lockdown phases imposed across various countries, the demand for shared services saw a decline as many companies focused on core operations and delaying non-essential spends. Work from home became the new norm and companies struggled to adapt their IT infrastructure for remote working models. This posed challenges for shared service centers to operate effectively with distributed workforce. However, as businesses adjusted to the new normal, the demand for shared services started recovering from mid-2020.
The pandemic accelerated the digital transformation agendas of many companies. There was a rise in the adoption of cloud technologies, collaboration tools, cybersecurity solutions etc to support remote work. Shared service centers played a vital role in streamlining and consolidating back-office functions via digital platforms. This helped companies improve operational efficiencies and reduce costs during the pandemic. The demand for finance and accounting, procurement, human resource outsourcing increased as businesses looked to outsource non-core tasks. Going forward, the future strategies for shared services include leveraging artificial intelligence, robotic process automation, analytics to enhance service delivery, cybersecurity and compliance measures to address risks in the new distributed operating model.
Geographical Regions with High Concentration in Shared Services Market
North America represents the largest market for shared services in terms of value, estimated to account for over 35% share of the global market in 2024. The region is a pioneer in adopting shared services frameworks to optimize back-office functions. Countries like the US and Canada have presence of many global enterprises from various industries that rely on shared services for standardizing processes. Europe is another major market for shared services globally with countries such as Germany, UK, France having well-established shared services centers of multinational corporations. Asia Pacific is fast emerging as an attractive destination for setting up new shared services centers due to availability of skilled resources and lower labor costs. Regions like India and Philippines are gaining significance.
Fastest Growing Regional Market for Shared Services
The shared services market in Asia Pacific region is poised to grow at the fastest pace globally during the forecast period. This can be attributed to rapid digitization of enterprises across industries like IT, banking, manufacturing etc and their focus on optimizing back-office activities. Countries like India and China offer a favorable environment for establishing shared services with pro-business policies and infrastructure investments. Abundant talent pool familiar with new technologies is enabling companies to set up next-generation shared services in Asia Pacific with capabilities around analytics, AI and automation. Overall market growth, emerging business models and Asia's cost competitive edge are a few factors driving it to become the fastest expanding regional market for shared services.
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