The research study covers the present scenario and growth prospects of the global shared services market for 2016-2020. To calculate the market size, the report considers revenue generated from shared services offered by vendors in the market and total contract value of shared services deals across industry verticals.
Technavio ICT analysts highlight the following four factors that are contributing to the growth of the global shared services market:
- Need for process automation
- Digital transformation of shared services
- Increase in IT consolidation
- Cost reduction and increasing business efficiency
Need for process automation
Process automation is an important component of business transformation at a functional level as it reduces manual work and increases process efficiencies. Automated processes reduce redundancy and errors in the transactional processes. Process automation shared services help to reduce manual steps in the finance, HR, and supply chain processes through data accuracy and consistency.
Amit Sharma, a lead analyst at Technavio for research on IT professional services, says, “Organizations implementing shared services exhibit a direct correlation between process automation and operational efficiencies. Shared services are increasing the level of process automation for faster and high quality service delivery systems for customers.”
Digital transformation of shared services
The expansion of shared services offerings is augmented by the ubiquity of digital transformation. Organizations are embracing digital technologies for operational excellence, cost reduction, increased productivity, and business process integration. The adoption of disruptive technologies such as big data and analytics, business intelligence, virtualization, and cloud computing is gaining significance. Shared service providers are changing the delivery model of shared service centers (SSCs) to efficiently manage their client’s digital technologies.
Digital transformation systems have a huge impact on shared service models; therefore, numerous transformations of shared service delivery models are already underway. For instance, the supply chain management (SCM) process requires automated SCM software systems to ease procurement and logistics management. Such strategies require efficient support services. Advanced shared services models, which boost supply chain efficiency are also being implemented in organizations.
Increase in IT consolidation
IT consolidation helps to improve operational efficiency and to achieve economies of scale. CFOs are realizing the importance of shared services in finance functions to achieve economies of scale. The ever-increasing consolidation of IT infrastructure such as data centers and networking systems in organizations is forcing C-suite executives to implement advanced shared service delivery models. The demand for consolidated shared services will also increase in step with IT consolidation across industry verticals in both the public and private sectors. Public sector spending on shared services is increasing at a significant pace. The public sector is adopting IT services and implementing shared services programs in a bid to cut costs.
Cost reduction and increasing business efficiency
Cost reduction is one of the major factors behind the implementation of SSCs in organizations. However, many organizations want to increase business performance, speed of service delivery, and quality by implementing shared services model. Shared service models help to save costs because these connect different units in an enterprise through a centralized SSC that reduces errors and information redundancy. Organizations are also able to save cost through the implementation of the shared services model on a single IT platform at functional levels such as finance, HR, marketing, and operations.
“Implementing shared services helps in standardization of processes, technology, and IT governance. Shared service centers provide flexibility to organizations to manage their function as per business requirements and to minimize risks,” confirms Amit.
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