In business, services are activities that benefit companies without delivering a physical product. These are intangible assets that include marketing, production and other functions that help a company keep up with demand for its products and keep customers happy. Some examples of business services are information technology, warehousing and shipping. In general, these services support the core business and are a vital part of a business’s ability to function.
Unlike product businesses, which typically focus on the features they can offer and compare with competitors, service business owners must understand that their value is in how they interact with customers. This means they must focus on ensuring that their service delivery is friendly and efficient, as well as offering a high level of customer satisfaction.
As the world moves from a predominantly industrial economy to one that increasingly relies on service industries, it becomes important to recognize how important these services are and how much of a role they can play in a successful economic model. The future of the economy depends on a number of factors, but the success or failure of a business often comes down to how effectively it manages its service sector.
While some products fall on a continuum with pure service at one end and pure commodity goods at the other, most fall in between. For example, restaurants provide a service by serving food and ambience, but they also sell commodities such as beverages and snacks. Most modern business theorists believe that the key to success in a service business is to design the experience, rather than the specific product or service.
A number of different types of services are considered to be business services, including management consulting, training, human resources and engineering. However, the most important type of business service is IT services, which are a critical component of any modern company. Essentially, these services help a business align its IT infrastructure with the needs of its employees and customers to ensure the company can meet its business goals.
Another important type of business service is logistics, which refers to a company’s supply chain. For example, a transportation company may deliver supplies to a manufacturing plant or ship finished goods from the factory to the retailer. Other logistical business services include warehouse operations, inventory management, order fulfillment, labeling and light assembly work.
Many businesses outsource some of their business services to outside providers. This can be cost-effective and helpful for a company that lacks the staff or expertise to perform a task in-house. For example, a manufacturing company may hire an outside vendor to perform its quality assurance testing. Alternatively, the company may contract with an IT service provider to handle its computer maintenance and support needs.
A company may outsource other services as well, including payroll, accounting, legal services and real estate services. The business services industry has grown tremendously, as a result of the increasing reliance on outsourcing by companies worldwide.