Business services are the activities that support a business but do not produce tangible commodities. They include information technology, accounting, shipping and finance services. These activities are often performed by a third-party provider. They are a crucial part of the value chain and should be aligned with a company’s customers, employees and operations.
The definition of a service differs depending on the industry and type of business. However, most modern business theorists see a continuum with pure service on one end and a pure commodity good on the other. Most products fall somewhere in the middle, with elements of both service and a physical product present. For example, a restaurant provides a physical good (the food), but also offers services such as ambience, the setting and clearing of tables, and wait staff who interact with customers.
While the term “business services” is not formally defined, it includes any activity that supports a company’s mission or core competency. It can also encompass a wide variety of intangible activities, such as customer service, human resources management and marketing. It may also include logistics, supply chain management and waste disposal.
A company’s success can depend on the quality of its business services. However, it can be difficult to measure the performance of these services in terms of cost and quality. A service provider’s reputation for quality can help it to attract new customers and retain existing ones.
Many companies are increasingly turning to outsourcing their business services to save money. This can be an effective strategy, particularly if a particular task requires specialized skills that the business does not have in-house. Using a business service provider can also free up employee time to focus on critical productivity tasks.
In addition to outsourcing, many businesses use business services to improve their internal operations and to support employee satisfaction. For example, a company may offer fitness facilities or transportation services to boost employee morale. It may also provide consulting services to help it achieve its business goals.
Some businesses are also relying on business service providers to take care of their online sales. Third-party logistics providers, for example, can handle the warehousing, packaging and fulfillment of online orders. This can reduce the burden on a business’s IT department and enable it to concentrate its efforts on other critical areas.
As a business grows, it becomes more and more complex to manage the various processes involved. This is especially true for a service-based business, where the value of an offering depends on its ability to attract and satisfy attractive customers. The challenge for managers is to design a successful service business that delivers what people want and need. This article discusses a framework for understanding and designing service systems that can meet these needs. It emphasizes the need for service designers to change their perspectives, moving from thinking about the characteristics of the product they are selling to focusing on the experiences that customers will have.