GlobalEDGE – What Are Business Services?

Business services are the additional tasks and activities that help maintain a company’s operations, despite not creating or delivering any physical products. Examples of business services include IT support, marketing and accounting. These services are often outsourced to third-party providers, which allows businesses to focus their resources on their core operations.

While product companies have a well-established tool kit for successfully managing their products, service firms face significant challenges in determining how to best manage their customers and deliver quality experiences. Successful service companies have learned that success depends on four key components: a customer-focused vision, design thinking, effective teams, and organizational design.

The service industry includes all activities that provide value to customers for a fee or a contract. It is the largest industry in the world and encompasses everything from healthcare, personal labor, and finance to food service and transportation. For globalEDGE’s purposes, all work related to money or assets that a business needs is filed under Financial Services, while all other miscellaneous help a business may need is classified under Business Services.

Services can be delivered in a variety of ways and through a number of channels. Some services are delivered digitally, such as a virtual business coach or a freelancer with a unique skill set. Others are performed in person, such as a hair stylist or private fitness instructor. Other services are delivered through third parties, such as logistics or fulfillment for eCommerce.

One of the main characteristics of a business service is its intangibility. This means that the provision of the service does not result in the creation of a tangible product, and it cannot be stored like inventory for future use. In addition, the production and consumption of a service occurs simultaneously, which requires customers to interact with the provider during the delivery process.

In addition to intangibility and interdependency, the nature of business services is highly scalable. Unlike the production of physical products, which can require large amounts of capital and long lead times to develop, the delivery of business services can be scalable based on demand. This is particularly true of digital business services that are delivered over the Internet, where scale and scope can be easily increased to meet increasing demand.

As the demand for business services grows, many organizations are expanding their in-house capabilities to provide these services. However, this approach can be expensive and inefficient. Many companies turn to third-party providers for assistance in delivering their business services, which is much more cost-effective and time-efficient.

Aside from reducing overhead, outsourced providers can also offer expertise and experience that in-house employees might not have. These benefits can make the difference between success and failure of a business service. For example, a third-party logistics firm can save companies time and money by performing all aspects of fulfillment for their online sales, including receiving goods, warehousing, picking and packing orders, and shipping them to customers. In addition, these providers can help to ensure that the company’s supply chain is running smoothly and efficiently.

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