Business services are those activities that assist a business without delivering a tangible commodity. These include, but are not limited to, logistics (including travel and facilities), waste handling, staffing, shipping, administration and security services.
In the business world, there are two primary ways to make money: goods and services. Goods are products that can be sold for a pre-determined price. Alternatively, services can be provided to customers at a fixed rate or hourly fee.
The main difference between the two is that goods are tangible items that can be touched or felt and can be traded for cash, whereas services are intangible items that cannot be physically touched or seen. This distinction can be important because it allows service businesses to focus on their customers’ needs rather than concentrating on delivering physical products.
A common example of a business service is information technology, which helps support the other aspects of a business. For example, a banking company may use IT shared services to monitor its global network of ATMs and online banking systems.
Shared services can also be used to consolidate support functions for a specific business, typically within a single business unit or department. This type of arrangement can help a business achieve cost savings and improve performance by reducing duplicative processes, enhancing service levels, and enabling centralized management.
One of the most common types of shared services is human resources, which involves a company consolidating HR functions into a department. This allows the company to manage employees at a central location while providing them with valuable career opportunities and training.
Another popular shared service is finance, which involves combining financial operations into a single department. This can help a business save on costs related to accounting, accounts payable, and accounts receivable.
The final common shared service is transportation, which helps a company manage the transport of products to and from a customer. Companies that offer business transportation services often focus on improving the efficiency of logistics. This includes using new technologies and integrating logistics with supply chain management to streamline delivery times.
A third common type of shared service is utility services, which involve providing water, electricity and gas to a company. These services are essential for maintaining a smooth workplace environment.
These services are often offered at the office, but they can be used for residential and commercial locations as well. They can help a company save time and money by reducing the need for employees to visit stores or other suppliers to pick up supplies.
Finally, there is the social service industry, which provides services that benefit society. These are not funded by direct sales, but instead by taxes and charitable organizations. In addition to funding their efforts through these sources, they can raise funds from sales transactions to enhance their work.
There are three main types of service businesses: pure services, business-to-business (B2B), and social services. Each has its own unique characteristics and requires a different approach to strategic management.