Shared services primarily involves consolidating business activities and processes across an organization into specialized operating centers with an objective to achieve economies of scale and operational efficiencies. Shared services enables organizations to streamline their processes, reduce redundancies, improve control over expenditures, and focus on core business activities. It facilitates standardization and harmonization of operational processes.

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 from 2024 to 2031.

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. These players are focusing on new product development and collaboration to gain higher market share.

The growing acceptance of cloud-based shared services solutions across various end-use industries presents significant growth opportunities. Cloud-based shared services assist organizations to optimize resources, enhance process agility and efficiency. Moreover, the increasing focus of organizations towards core business activities is augmenting the demand for cloud-based shared services.

 

The Shared Services Market Trend
is expected witness high growth in Asia Pacific region owing to rapid industrialization and growing need for integrating advanced technologies. The increasing number of multinational companies setting up their shared services centers in countries like India and China on account of availability of skilled labor at affordable costs is driving the market growth.

Market Drivers

The major driver for the growth of shared services market is the growing need for adopting efficient business processes. Shared services help organizations streamline processes, reduce operational costs, improve control over expenditures and focus on core business activities. This has accelerated the demand for shared services solutions across industries.

Market Restraints

High initial investment and complexity associated with implementation of shared services solutions are the major restraints for the growth of shared services market. Integration of shared services with legacy systems of organizations also poses challenges. Lack of skilled workforce and dependency on third party providers also hampers the demand for shared services to a certain extent.

Segment Analysis

Shared services market comprises outsourced services such as manufacturing, healthcare services, IT services and more. Manufacturing held the largest share of around 30% owing to the operational efficiencies and cost savings offered by outsourcing non-core manufacturing functions. With increasing focus on core competencies, manufacturing companies are outsourcing non-core operations like packaging, quality inspection, material planning etc. to achieve economies of scale. Healthcare services segment has emerged as the fastest growing segment driven by the increasing adoption of BS and BPO services by healthcare providers to optimize business functions. Services like medical billing, transcription, medical coding etc are increasingly being outsourced to specialized service providers.

Global Analysis

North America dominates the global shared services market with a share of over 35% backed by early adoption of outsourcing models in the region. Presence of major shared services companies and technological advancements have augmented market growth. Asia Pacific displays the fastest growth and is expected to grow at a CAGR of around 11% during the forecast period. Rapid digitalization of business processes and increasing cost optimization pressure on companies are encouraging market expansion. China, India and other southeast Asian countries showcase high outsourcing potential due to labor arbitrage benefits offered.

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