Shared Services refers to the provision of a service by one part of an organisation or group where that service had previously been found in more than one part of the organisation or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider. The key is the idea of 'sharing' within an organisation or group.

Shared Services is different from the diametrically opposite model of Outsourcing which is where an external third party is paid to provide a service that was previously internal to the buying organisation, typically leading to redundancies and re-organisation. There is an on-going debate about the advantages of Shared Services over outsourcing. It is sometimes assumed that a joint venture between a government department and a commercial organisation is an example of Shared Services but in fact they are quite different. The joint venture involves the creation of a separate legal commercial entity (jointly owned) which provides profit to it's shareholders. It is difficult to see what is being shared rather than bought. Such joint ventures are really a form of outsourcing.

One purpose of Shared Services is the convergence and streamlining of an organisation's functions to ensure that they deliver to the organisation the services required of them as effectively and efficiently as possible. This often involves the centralising of back office functions such as HR and Finance but can also be applied to the middle or front offices. A key advantage of this convergence is that it enables the appreciation of economies of scale within the function and can enable multi function working (e.g. linking HR and Finance together), where there is the potential to create synergies.

Shared Services are more than just centralisation or consolidation of similar activities in one location. Shared Services can mean running these service activities like a business and delivering services to internal customers at a cost, quality and timeliness that is competitive with alternatives.

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