July 21, 2024
Shared Services Market

North American Shared Services Market Poised to Grow Due to Increasing Demand for Cost Optimization and Focus on Core Competencies

The North American 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 refers to the consolidation of common business functions across an organization into centers of expertise. This provides economies of scale and standard processes. The key products and services in the shared services market include finance & accounting, supply chain management, HR, and technology infrastructure management. Shared services aims to enhance collaboration, reduce costs, and improve quality and consistency of support functions through consolidation.

Market Dynamics:
The increasing demand for cost optimization is expected to be a major driver for the North American shared services market growth over the forecast period. Companies are focusing on reducing operational costs to improve profit margins. Shared services aids in achieving economies of scale by consolidating common functions and eliminating redundant work. Furthermore, the growing focus on core competencies is also propelling the market forward. Companies want to focus resources on key revenue-generating activities and outsource non-core operational functions. Shared services arrangement allows them to do so as it takes over the back-office operations.

Segment Analysis
The shared services market is dominated by the finance and accounting segment which holds more than 25% share of the overall market. This segment processes high volume of transactions on a daily basis for organizations. Shared service centers allow companies to consolidate their finance and accounting functions and benefit from process standardization, centralized management and economies of scale.

PEST Analysis
Political: Changes in tax laws by different governments impacts the mode of operations for shared service centers across borders. Economic: Economic growth enables organizations to invest more in shared services for achieving operational efficiency. Social: Outsourcing of finance and accounting processes to shared service centers raise concerns around data privacy and security. Technological: Adoption of automation, artificial intelligence and analytics help improve productivity and enhance customer experience for shared services.

Key Takeaways
The global Shared Services Market Segmentation size is expected to reach US$ 41.37 Bn by 2023, expanding at a CAGR of 23.1% during 2023-2030. The market is driven by the need for centralized management of support functions and improving operational efficiencies. Regionally, North America dominates the shared services market currently due to early adoption by organizations in the region to standardize business processes. 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.

Regional analysis
North America accounts for more than 35% share of the global shared services market currently. Early technology adoption and presence of MNCs are driving the growth of shared services outsourcing model in the region. Asia Pacific exhibits potential for growth, expanding at over 25% during the forecast period due to availability of low-cost talent and policy support from governments in various countries such as India and China.

Key players
Key players operating in the shared services market are focusing on developing digital capabilities and consulting services around newer technologies such as artificial intelligence, predictive analysis and robotic process automation. Infosys is one of the leading companies with capabilities across financial services and offering consulting expertise. SAP has a strong presence via its finance and data management software.