Business services are tasks and activities that help maintain a business but do not produce any tangible products. Some examples include logistics, transportation, warehouse management, fulfillment and shipping services for eCommerce, as well as marketing, consulting, and IT support.
In some cases, services may be delivered to customers directly. Other times, they may be marketed to customers and then outsourced to external providers. In either case, the business service industry is a large and important part of the economy, generating trillions of dollars annually worldwide.
The success or failure of a service company often comes down to four things, says Harvard Business School professor Michael Norton. These are outlined in a course that he teaches, called “Four Critical Elements of Service Strategy.” These elements are: 1) designing the experience, 2) providing it reliably and effectively, 3) managing customer relationships and 4) making money.
Whether you’re a business owner who provides a service or an employee working in the service industry, it is essential to understand these core concepts. They will help you make better decisions that impact your bottom line.
Some examples of business services are warehousing, packaging, delivering and performing light assembly work. Other types of business services are order entry and processing, shipping, tracking, and inventory control. These services allow businesses to efficiently send goods from manufacturers to their final destination.
Many third-party logistics companies specialize in helping online retailers and e-commerce sites optimize their logistical processes and fulfill orders for customers. These warehousing and shipping services typically include receiving and storing inventory, picking and packing items for delivery, and providing tracking information to customers. These warehousing and logistics services can also provide value-added services like sorting bulk inventory into customized lots, labeling and performing light assembly, and preparing orders for shipment.
Other examples of business services are payroll, legal, and IT support. Payroll services manage the creation and distribution of paychecks to employees, while legal services handle a wide range of legal matters such as contracts and regulatory compliance. IT support services offer a variety of software and hardware solutions for data management and automation, as well as training and technical assistance.
Using business services helps businesses improve overall efficiency by freeing up valuable employees to focus on more important tasks. It also allows companies to tap into specialized expertise that they might not have in-house, as well as scale up or down in response to seasonal output fluctuations.
Some of these business services are not tangibly measurable, which can make them challenging for managers to track and report on. However, by understanding the key characteristics of business services, you can begin to develop a framework for measuring and reporting on them in your organization. This will enable you to identify areas for improvement and ensure that your business is maximizing its potential. Moreover, you can measure and benchmark the performance of your business against those of competitors. By comparing your own business services with those of your rivals, you can identify best practices and implement changes that will have a positive impact on the bottom line.
