Shared Services Market Analysis | Coherent Market Insights

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2. SHARED SERVICES MARKET ANALYSIS • 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) - Size, Share, Outlook, and Opportunity Analysis, 2019 – 2027 • The global shared services market was valued US$ 28.79 Bn in 2019 and expected to reach US$ 98.17 Bn by 2027.

3. Market Drivers • Growing emphasis on cost reduction in overall operations is expected to drive growth of the global Shared Services Marketduring the forecast period The operational processes in the companies have witnessed a massive transition in the recent past. Management is now focused on a cost-based approach instead of a transaction-based approach. As of now, there is a need for cost reduction which can be achieved through the centralization of data. Furthermore, organizations are laying emphasis on the processes, which would align operations with a corporate strategy, enhance quality, improve service, reduce redundant or obsolete tasks, and minimize administration cost. Standardized services, accuracy, and timeliness, consolidation of the same tasks across lines of business and legal entities are the factors that affect companies' operations. Therefore, increasing focus cost reduction is expected to drive the global shared services market growth over the forecast period.

4. Rising demand for enhancing customer service is expected to propel the global shared service market growth over the forecast period In any industry, good customer service plays a crucial role and helps the company to grow further and strengthen its brand in the market. Customer service is a major process offered through shared services. Thus, by using expertise on customer service executives from the shared service process, companies can focus on their core competencies. Hence, these factors are expected to support the market growth in the near future.

5. North America region dominated the global shared services market in 2019, accounting for 35.1% share in terms of value, followed by Europe, Asia Pacific, Middle East and Latin America respectively.

6. Market Restraints • Challenges regarding data security and complexity are expected to restrain growth of the global shared services market over the forecast period Shared service providers store, manage, and process an organization’s confidential and restricted personal information, complex data. Access to the confidential data is restricted by authorization objects of the shared service framework. However, this confidential information is always subjected to cyber-attacks by cyber criminals. Protecting sensitive shared services and employee information is the ultimate responsibility of the shared service provider. Hence, these factors are expected to restrict the market growth in the near future.

7. Negative impact of technological innovations is expected to hamper the global shared services market growth over the forecast period Shared service providers use different types of technology and platforms to run their business. New technology or a new platform is the challenging factor and likely to bring disruption to the shared services model. Marketplace driven platforms, cloud computing, automation, and robotics are some of the major technology trends expected to hamper the market growth. Moreover, there is a possibility of the current shared service model becoming obsolete since it is difficult to match with the pace of technology evolution as it is moving at a faster pace than shared service models are developing.

8. Market Opportunities • Legal end-use segment can provide major growth opportunities for market players The primary role of a company’s legal function is to protect the company’s rights and advocate its interest. Emergence of new technologies and growing need for cost reduction has accelerated the adoption of shared services in legal end-use in the recent past. It has compelled companies’ legal department to change their conventional business approach. Some of the advantages of legal shared services are dispute avoidance, alternative dispute resolution, subject matter expertise. Thus, legal shared services allow companies to resolve any internal dispute. These disputes are handled through third-party point of view and there are fewer chances of influence of any party.

9. Massive growth opportunities in emerging markets Growing need for reducing costs and enhancing quality of services is accelerating growth of the market. This is achieved in emerging and new countries due to the availability of skilled resources at a low cost. Moreover, a company improves its capability to respond to growth opportunities by establishing shared services centers in emerging and new markets. The global shared service market is growing at a rapid pace in emerging economies, owing to the advantages of setting shared service centers, irrespective of skill shortages, language barriers, time zone differences, and regulatory compliance.

10. Market Trends • Growing trend of process efficiency, process standardization, and centralization of data Shared services constantly look for opportunities to integrate the functions across organization and expand globally. These functions include process standardization, process efficiency, and centralization of data. Shared service models provide a number of benefits namely leveraging technology, supporting roles, and cross-training of staff. Shared services and multi-function models align with an increasing trend towards process standardization as companies move from independent standards tied to business units. Furthermore, combined administration across the organization provides more prestige among enterprise leadership.

11. Increasing popularity of self-service and cloud-based solutions In the recent past, there has been an increase in the use of advanced technologies. This has a number of related parameters such as expansion of self-service, mobile applications, social media, and use of the cloud. Self-service applications allow shared service providers to focus on performing higher-value services. Cloud-based solutions provide numerous benefits such as increased capability, shorter implementations, and lower costs. Thus, by combining both self-service and cloud-based applications, shared service providers can adapt to changing business requirements.

12. Segment information: • In global shared services market, by End-use segment, the IT & Telecom segment dominated the global market in 2019, accounting for 27.8% share in terms of value, followed by BFSI, Manufacturing, Healthcare and Pharmaceuticals, Media and Entertainment, Retail & Hospitality and Others respectively.

13. Regulations • Shared Services Canada (SSC) is responsible for delivering mandated email, data center, and network services to partner organizations in a consolidated and standardized manner to support the delivery of Government of Canada programs and services. SSC also provides certain optional technology-related services to government organizations on a cost-recovery basis. Budget 2013 further expanded SSC’s mandate, adding the consolidation of government-wide procurement of software and hardware for workplace technology devices

14. Competitive Section • Key players operating in the global 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.

15. Key Developments • Key companies in the market are focused on business expansion, in order to enhance the market presence. For instance, in January 2017, Oracle announced a new expansion plan in the regions of North America and EMEA. This would double the regional presence of cloud platform of Oracle. • Major players in the market are involved in contracts and agreements, in order to gain competitive edge in the market. For instance, in December 2019, Infosys Limited entered into a five-year contract Telenet Group, a Belgium-based telecom company, to build new digital and data capabilities

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