February 24, 2024

Rising demand from SMEs to boost the growth of Shared Services Market

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 23% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Shared services is a business function or process that is centralized to achieve higher economic scales, synergy, specialization and optimization. Shared services help organizations to reduce the overlap between functions and bring more efficiency and consistency across processes and units. It helps in centralization of generic business functions like finance and accounting, human resources, procurement, supply chain etc. across the organization. By leveraging shared services, organizations can achieve economies of scale and increase efficiencies.

Market key trends:
The growing adoption of cloud based technologies is one of the major trends witnessed in the shared services market. Cloud platform enables shared services centers to enhance flexibility, scalability and lower costs. Cloud based models eliminate the need for on-premise hardware infrastructure and upfront capital investments. This allows shared services providers to scale operations up or down based on fluctuating business demand. Another key trend is the emergence of automation in shared services. Technologies like robotic process automation, artificial intelligence and machine learning are helping organizations to streamline and automate routine tasks. This improves process efficiencies, productivity and reduces costs for shared services providers.
Porter’s Analysis
Threat of new entrants: The shared services market requires high initial investments which make entry difficult for new players. The industry is dominated by few major players making entry challenging.
Bargaining power of buyers: Buyers have moderate bargaining power due to availability of substitutes and presence of many vendors. However,Switching costs are high which increases bargaining power of buyers.
Bargaining power of suppliers: Suppliers have low bargaining power due to availability of many substitutes and less differentiation in services.
Threat of new substitutes: Threat of substitution is moderate as outsourcing non-core functions can be done through other shared services models like collaboration with startups or offshore locations.
Competitive rivalry: The market is highly competitive with major players competing on service quality, innovation, and pricing.

Key Takeaways
The global Shared Services Market Size is expected to witness high, exhibiting CAGR of 23.% over the forecast period, due to increasing need for optimizing business processes.

Regional analysis: North America dominates the shared services market, accounting for around 35% share owing to early adoption. Asia Pacific is expected to witness fastest growth due to availability of low-cost skilled labor and government initiatives for developing outsourcing destinations like India and Philippines.

Key players operating in the shared services market are Infosys Limited, SAP, HCL, EXL, Atos SE, Accenture, Genpact, IBM Corporation, Oracle Corporation, Cognizant, Capgemini SE, and Tata Consultancy Services Limited and Others. Key players are focusing on developing innovative digitized services and solutions and expanding in emerging markets through partnerships and acquisitions.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it