A business service is work that supports a company’s operations but does not produce a tangible product. The work can be as varied as information technology assistance and employee training services to logistics support and waste management. Often, the work is invisible and unappreciated. But a company’s profitability depends on its ability to deliver business services. This article presents an approach for crafting a successful service business based on four critical elements:
A key element is the involvement of customers. Unlike products, a customer’s input can affect the cost and quality of services. For example, a client who dithers at the counter of a fast-food eatery makes that establishment less efficient for everyone else waiting behind him. Moreover, the customer can influence operational processes, even though they cannot touch the physical object being sold. A customer’s expectations may change over time and thus require an organization to modify the services it offers.
In the three-sector economic theory, service is considered tertiary. While primary and secondary sectors produce raw materials or tangible goods, the tertiary sector includes businesses that provide experiences and consultation for a fee. This includes such activities as retail and telecommunications. The tertiary sector is also growing rapidly, especially in emerging economies.
This growth is driven by the emergence of new services that combine and enhance traditional ones. For instance, the warehousing and distribution industry has emerged as a business service to support supply chains in the manufacturing sector. This activity involves handling, sorting and storage of bulk goods into smaller lots for individual orders. It also involves a wide range of value-added operations such as repackaging, labeling and marking.
Other examples of business services are marketing, consulting and inter and intra-departmental communication. These services are necessary for any trading enterprise, and are essential in developing countries.
For the business service industry to remain competitive, it must focus on delivering value to its clients. This includes reducing operating costs and increasing productivity. This can be achieved by leveraging innovative technology solutions and enhancing customer engagement. It is also important to ensure the services offered are aligned with a company’s goals and that the value of each service is measurable.
To do so, organizations must recognize the different components that make up a service and understand the interactions between them. The success of a business service hinges on the ability to deliver a consistently high level of customer satisfaction, while managing cost and minimizing risk. By focusing on the four core elements described in this article, companies can achieve these goals and improve their overall performance.