Shared Services Market Is Estimated To Witness High Growth Owing To Digitalization And Growing Demand for Operational Efficiency
The 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 are centralized business processes or divisions within an organization that are designed to enhance collaboration and operational efficiency. Key functions such as finance, human resources, IT operations and procurement are consolidated to provide high quality services at affordable costs. Shared services help organizations focus on their core competencies by outsourcing non-core support activities.
Market Dynamics:
The market is expected to witness high growth owing to increasing digitalization across industries and the growing demand for operational efficiency. Rapid digitization has enabled the easy sharing of resources and data across geographical boundaries, propelling the adoption of shared services models. Organizations are increasingly outsourcing non-core support functions to specialized shared services providers in order to benefit from their scale, expertise and cost savings. This is driving the growth of the market. Further, shared services help streamline operations and improve process standardization, which enhances productivity and efficiency. The need for optimizing costs is increasing pressure on companies to adopt shared services frameworks.
SWOT Analysis:
Strength: Shared services offer economies of scale by consolidating common business functions into centralized locations or clusters. This leads to lower operational costs and higher cost savings. Shared services promote standardization which improves process efficiency. Common business processes are standardized, documented and measurable.
Weakness: Transitioning to a shared services model requires high upfront investments and costs. It also needs changes to organizational design and culture which can create internal resistance. Dependence on technology increases the vulnerability to cyber threats and network failures.
Opportunity: Growth in outsourcing of non-core operations by organizations provides expansion opportunities for shared services providers.Advancements in robotics, AI and automation are allowing shared services centers to improve productivity and enhance customer experience.
Threats: Intense competition among existing and new players reduces pricing flexibility for shared services providers. Any disruption in technology infrastructure can hamper service delivery and impact customer satisfaction.
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