Shared services help to consolidate duplicative activities performed across different organizational units, and enable companies to leverage scale, standardize processes, and boost operational efficiency. Shared services offer advantages such as improved coordination, specialization of functions, consistency in processes, operational flexibility, controlled costs, and regulatory compliance. The need for shared services arises as organizations look to optimize and streamline business processes in order to reduce operational overheads and enhance profitability.
The global shared services market is estimated to be valued at US$ 162.48 Mn in 2023 and is expected to exhibit a CAGR of 8.3% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
One of the key opportunities for the shared services market is cost reduction. Shared services help companies reduce operational costs significantly by eliminating redundancies and optimizing resources. Centralizing common business functions into expert shared service centers allows leveraging of economies of scale. Standardization of processes and central management of activities leads to improved service quality at reduced costs. Outsourcing of non-core operations to specialized third-party providers further helps lower expenses. The potential for cost savings through shared services is attracting more organizations across industries to adopt the shared services model. This growing focus on cost optimization through shared services will continue to drive market growth over the forecast period.
Porter’s Analysis
Threat of new entrants: Low-medium as this market requires substantial investments and R&D. However smaller players can enter niche segments.
Bargaining power of buyers: High as key players operate. Buyers can negotiate on pricing and services.
Bargaining power of suppliers: Medium. Key suppliers have specialized components and technologies.
Threat of new substitutes: Low as specialized customized solutions are required. General business services cannot replace shared services.
Competitive rivalry: High among key global players competing on pricing, capabilities and customer support.
SWOT Analysis
Strength: Technology leadership, customized solutions, global footprint and industry expertise.
Weakness: High R&D and maintenance investments, dependency on few large clients.
Opportunity: Growing outsourcing, increasing automation and analytics demand. Regionally underpenetrated markets.
Threats: Economic slowdowns, contract exit or reduction, technology disruptions.
Key Takeaways
The Global Shared Services Market Size is expected to witness high growth. The market size is projected to reach US$ 162.48 Mn in 2024 registering a CAGR of 8.3% during the forecast period.
North America dominates currently due to early technology adoption and outsourcing trends among enterprises. Key regional markets include Asia Pacific and Middle East & Africa possessing high outsourcing potential. Enterprises are increasingly outsourcing finance & accounting, procurement and HR functions to manage costs. The region possesses availability of skilled resources and favorable government policies for outsourcing industries.
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. Dell Inc. and General Dynamics Corp. have the largest market shares with capabilities across service offerings.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it