by The global Shared Services market is estimated to be valued at US$ 41.37 Bn in 2022 and is expected to exhibit a CAGR of 23.1% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Shared services is an organizational structure which supports business units through centralized service centers. Some of the key functions which get centralized include human resources, finance, accounting, administration, and IT infrastructure management among others. This helps companies reduce costs by eliminating redundant operations and leveraging economies of scale. Shared services also improves processes through standardization of best practices. With companies looking to gain strategic advantage through operational excellence, shared services provide an efficient business model for various back-office functions.
Market key trends:
One of the major trends driving growth of shared services market is increasing adoption of cloud-based shared services platforms. Cloud platforms provide agility, scalability and subscription-based pricing which is appealing to organizations. Cloud deployment eliminates upfront capital costs and provides pay-as-you-go model which is beneficial especially for smaller organizations. Cloud also facilitates anytime, anywhere access which supports remote and hybrid work culture adopted by many companies. This has propelled demand for cloud-based shared services offering from major players in the market. The market is expected to witness increasing investments in cloud technologies that would support shared services delivery over the forecast period.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the shared services market is moderate. There are high initial capital requirements and economies of scale for new players to start operations.
Bargaining power of buyers: The bargaining power of buyers is high. Buyers can negotiate on price and demand higher flexibility due to availability of several vendors providing shared services.
Bargaining power of suppliers: The bargaining power of suppliers is low. This is due to low differentiation in services and availability of substitutes.
Threat of new substitutes: The threat of new substitutes is high due to emergence of new technologies like automation, AI that can provide alternative solutions.
Competitive rivalry: The competitive rivalry in the shared services market is high due to presence of many international and regional players.
Key Takeaways
The global Shared Services Market Segmentation is expected to witness high growth, exhibiting CAGR of 23.1% over the forecast period, due to increasing demand for cost optimization and need to focus on core business activities. The market size is projected to reach US$ 341.28 Bn by 2030 from US$ 41.37 Bn in 2023.
On the regional front, North America is expected to dominate the shared services market owing to presence of key players in countries like US and Canada. Moreover, increasing adoption of advanced technologies and focus on core business functions are fuelling market growth. Asia Pacific is anticipated to exhibit fastest growth rate during the forecast period with China, India emerging as highly lucrative countries.
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. Players are focusing on strategic collaborations and partnerships to expand service offerings and geographic presence.
