Business services are the specialized professional services that businesses use to support their core activities. These include a wide range of functions like accounting, information technology (IT), legal services, human resources, and office management. Business services companies usually provide their expertise to other business enterprises (B2B) as well as end consumers. They also offer other auxiliary services to companies, such as third-party logistics and eCommerce fulfillment.
The business service industry is one of the largest and most diversified sectors in the European economy. It accounts for about 11% of the EU GDP and is essential for Europe’s competitiveness. The sector is growing and expanding, with new opportunities in areas such as combining products with services. It is also playing an increasingly important role in the ‘serviceitization’ of the economy.
Most businesses that sell a product or tangible good are not considered to be a service company. However, all businesses provide a service in some way. This is because a service involves the transfer of value from a provider to a consumer. Examples of pure service industries include airlines, banks, computer service bureaus, law firms, plumbing repair companies, motion picture theaters and management consulting firms.
There are several different approaches to managing a business service company, and the best approach depends on how much control a firm wishes to retain. Generally, the more control a firm wishes to keep, the more centralized its leadership model should be. A centralized model provides strong oversight and ensures that revenue-generating line managers do not overrule shared services management in times of strategic distress.
A key challenge in a service business is that customers can directly impact the costs and quality of a service, and this can be difficult to manage. For example, a customer who dithers at a fast-food counter can make the experience less efficient for the people behind him or her. In addition, a delay in the delivery of a business service can significantly affect a client’s satisfaction level and may ultimately result in negative word-of-mouth.
As a result of these challenges, it is important for the leader of a business service company to develop strong skills in strategic management. This can be achieved by training the management team and creating clear operating procedures that all employees must follow. It is also helpful to create a performance monitoring system that includes both qualitative and quantitative metrics. These metrics can be used to identify issues and improve performance.
Finally, a service company should set goals that are aligned with the overall objectives of the organization. This will help to ensure that all the employees are working towards the same goal and are pulling their weight. By following these steps, a business can build an effective and successful service company. However, it is important to remember that success in this field often comes down to getting four things right: service design, sourcing, pricing and implementation. Without all of these elements, a business is unlikely to be successful in this highly competitive and evolving industry.