An example of this concept is a company with an in-house copying and printing facility. It can perform those services for other companies without in-house facilities and staffing. Shared services are sort of a halfway point between outsourcing and contracting. It permits more leverage than contracting does, but less than what can be achieved through outsourcing. There is no transfer of ownership of the process, as there is in outsourcing.
Shared services are often a temporary solution or an intermediate step before outsourcing.
It is basically a marriage of convenience.