Can Shared Services become a Poster Child for Atmanirbhar Bharat?

With the emergence of disruptive technologies, seasoned suppliers, and world-class ICT infrastructure, India will witness a higher trajectory of growth in shared services in the coming decade.

Can Shared Services become a Poster Child for Atmanirbhar Bharat?

Abhishek Gupta, Co-founder and Partner- Pierian Global, was recently invited to speak at the webinar on “Shared Service Centre driving India’s way forward” by The Institute of Chartered Accountants of India. He shared interesting insights into the contribution to Aatmanirbhar Bharat and the economy.

As many would know, amid the outbreak of the COVID-19 our PM Mr. Narendra Modi announced a special package of 20 lakh crore under the Atmanirbhar Bharat Abhiyaan. Atmanirbhar Bharat is a campaign to enable a self-reliant India. It is a campaign aiming at making India independent and competitive in the global markets at the same time giving relief and economic upliftment to weaker sections of society, migrant labourers, and those most affected by the COVID pandemic.

The five pillars of Atma Nirbhar Bharat are— economy, infrastructure, technology-driven systems, vibrant demography, and demand but they can be manifested as:

  1. An economy that takes quantum jumps and not just incremental change
  2. Having an infrastructure that will be experienced as world-class and becomes the identity of India which is synonymous with a modern India
  3. A system that is based on technology-driven arrangements, fulfilling the dreams of 21st century India
  4. A vibrant demography that is the source of energy for a self-reliant India
  5. Demand, whereby the strength of our demand and supply chain should be utilised to full capacity.

Atmanirbhar Bharat is not about being self-contained or being closed to the world, it is based on the principle of being self-sustaining and self-generating. It is about pursuing excellence in policies that promote efficiency, equity, and resilience. Resulting in wealth creation and value addition, not only for self but for the larger humanity.

The Shared Services (SS) sector aligns with the principles of self-sustainability and self-generation in its available untapped share of business in India and its well-tried working models, which have been used internationally.

Till now, Shared services have helped 85% of Fortune 100 companies cut costs and expand their reach. India has been one of the most favoured destinations for setting up a global SS and achieving its objectives successfully. The affordable talent pool available across cities in India is the primary attraction point.

Going forward, shared services can become a poster child for Atmanirbhar Bharat in India, with its practices rooted in self-sustainability and self-generation of business with employment opportunities extending to include tier 3 cities. Several factors will contribute to this:

Developing SS in the Indian Markets

Till now Service providers were focused on international business and did not see the domestic market as a priority. With the booming IT/ITES and manufacturing sectors in India, the focus has shifted to India.

India has been less aggressive in adopting shared services. The domestic business process outsourcing (BPO) market contributes 0.16% of India’s GDP, compared to global BPO revenues that are 0.26% of global GDP.

Off-shored shared services, such as labour arbitrage or access to differentiated talent, were till now weak in India. Many bigger companies have now begun to implement programs but the coverage remains limited. Organisations are focusing on the rural sector for the next big growth push, and shared services can provide the required reach and capability building.

As a new generation of Indian companies emerges and builds a greater global presence, service providers should work on developing domestic markets based on low-cost and outcome-based models to capture the significant benefits.

Medium size organizations everywhere should start or use an SS

So far, mid-size businesses have not been very participative in Shared Services. But, with sudden growth and business expansions, the need becomes visible.

Mid-size businesses also have the requirement of an affordable talent pool and recruited leadership to drive back-office operations, while the core business can be handled by their core leadership team. It makes perfect sense for organisations to establish or use a SS. If located abroad, India makes a perfect case as a location. By using tier III cities, they can keep costs down while achieving greater efficiency and results. Currently, clusters of companies in remote areas leverage their resources to increase rural reach. For example, several insurance companies have collaborated with oil and gas or retail to expand markets.

Having an SS operation in smaller towns has multiple advantages both to the location and the people.

  • Opportunities of planned development open up for the city.
  • Access to employment and the convenience of living away from busy metros, with its multiple issues of transport and health hazards, will attract the right talent pool required for any operation.
  • Migration of labour to major cities can be reduced as work opportunities in allied functions will open up making a city self-reliant.

India has scores of mid-sized organisations that should realise the potential and efficiency of Shared services.

New industries joining into the practice of Shared Services:

A push should be created to enable new industries in India to participate in shared services. Over the last decade, multinationals have outsourced various practices like administrative, legal, analytics, and pricing to Indian SS. But Indian businesses focus on other benefits like process efficiency, excellence, time to markets which are more relevant in our country.

With global exposure, shortage of time, and an increase in affluence, Indian citizens expect professional and transparent services from the government. To deliver quality services, it is evident that Public Services is adopting Shared Services.

Telecom companies have also aggressively outsourced what they once regarded as a core. This includes IT, customer service, network services, billing, and in some cases, even product management!

The retail industry can be the next focus of shared services. Depending on their risk appetite and requirements, they can decide on the extent of the adoption of shared services.

The knowledge and expertise gained by Indian companies through years of Shared Service export can now be scaled and customised. With greater collaboration with other service providers, companies can explore possibilities of the various new industries which can be benefitted from SS.

With new emerging Disruptive Technologies, focused and seasoned suppliers, world-class ICT infrastructure, a close-to-nil learning curve, and necessary regulatory changes, India will see a higher trajectory of growth in shared services in the coming decade. Atmanirbhar Bharat can become the driving force and enabler for the same.


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