The global shared services market, By Component (Software, Services, Consulting, Integration, Maintenance), By End-use (Banking, Financial services and Insurance (BFSI), Media and Entertainment, Manufacturing, Healthcare, IT and Telecom, Retail & Hospitality and Others), By Deployment (Cloud and On Premise)and By Region (North America, Europe, Asia Pacific, Latin America, Middle East and Africa) - Global Forecast to 2027”, is expected to be valued at US$ 98.17 billion by 2027, exhibiting a CAGR of 16.6% during the forecast period (2019-2027), as highlighted in a report published by Coherent Market Insights.
Shared service is the provision of a service by one part of an organization where that service has been found in more than one part of the organization. As a result of this, funding and resourcing of the service are shared and providing department effectively becomes an internal service provider. Shared services are supported by IT and IT services and cater to requirements for diverse business units within the enterprise. Moreover, shared services may include copious IT processes and business functions and may come from various physical locations. The primary objective of shared services is to enable every business division to focus its limited resources on activities that support the division’s business goals.
The global shared services market was valued US$ 28.79 Bn in 2019 and expected to reach US$ 98.17 Bn by 2027.
Growing demand for end-to-end and better-controlled solutions is expected to boost growth of the global shared services market during the forecast period
In the recent past, organizations have changed the manner they used to work previously. Traditional approaches are being replaced with business approach, which is cost controlled along with quality and efficiency. Currently, organizations demand the services that are visible through both the upstream and downstream processes and have enhanced control over the business outcomes at any point in time. Shared services offer this approach for controlling the process. Therefore, high demand for end-to-end and enhance controlled solutions is expected to support the market growth over the forecast period. These benefits help organizations to shape into the leaner and agile structure.
Massive shift in business services to achieve economic goals can provide major growth opportunities
In the recent past, global business service has started focusing on cost-reduction benefits along with delivering value and support at the strategic level. This can be achieved via the implementation of a shared service model. Organizations that have implemented shared services gain a lot of benefits such as reduced costs and transaction processing times, actual performance management, increased customer satisfaction, cross-functional efficiencies, and use of personnel time on strategic initiatives. These benefits help organizations to shape into a leaner and agile structure.
Complexities involved in the implementation of shared service are expected to hinder the global shared services market growth over the forecast period
Implementing shared services is a complicated process, which requires a significant change in the entire infrastructure and business process of the organization. Shared Service providers store, handle and process an organization’s confidential and restricted personal information, complex data. Furthermore, the implementation of shared services across the organization is time-consuming. Thus, many small and medium-sized enterprises are unwilling to adopt shared services to their business. Therefore, complexities involved in shared services implementation are expected to hinder the global shared services market growth in the near future.
Increasing availability of robust infrastructure and low-cost office spaces in Europe
New players such as Sario from central and eastern European countries in the shared services market are gaining a competitive advantage over on-shore and Asia Pacific players. The advantages such as availability of technical and language skills, time zone and geographical position, availability of low cost offices and robust infrastructure attract foreign investors to this region. Moreover, new countries such as Romania are becoming credible substitute locations over established locations such as Poland, which are on the verge of maturity and saturation for the organizations in the shared service market.
Outsourcing organizations are gaining market share slowly
Many organizations are implementing a shared service model instead of traditional business services as it enables to achieve economies of scale due to outsourcing of specific business function. In this way, the trend of outsourcing a business function has gained major significance in the recent past. Outsourcing organizations gain market share albeit at a slower pace rate. Moreover, many organizations are adopting outsourcing companies from the Asia Pacific, owing to the availability of cheaper cost resources and technology and easy adaptability to changing business demands. Companies such as Infosys, TCS have gained a reasonable market share in the shared services market due to the above-mentioned factors.
The National Shared Services Office (NSSO) is responsible for delivering shared services within the Civil Service and setting standards and implementing government policy for shared services across the Public Service in Ireland. It is an administrative office within the Department of Public Expenditure and Reform, set up as part of the Government’s reform programme.
Key players operating in the global shared services market are Infosys Limited, SAP SE, HCL, EXL, Atos SE, Accenture, Genpact, IBM Corporation, Oracle Corporation, Cognizant, Capgemini SE, and Tata Consultancy Services Limited.