The business services sector includes a broad range of services that help businesses operate. These services can include advertising, marketing, consulting, logistics (including travel and facilities services), waste handling, staffing, shipping, administration and security.
The industry provides over a quarter of the EU’s GDP and is a major contributor to European competitiveness as well as providing opportunities for firms to enhance the value of their products through combinations of goods and services. The EU’s internal market legislation and policy actions aim at removing legal barriers and stimulating growth in the business services sector.
There are four critical elements that a service business needs to get right or else risk failing: design, customer experience, management of people, and the management of the firm’s physical assets. Each of those areas requires a different approach, and all of them are interrelated.
2. Design: As with product companies, managers must develop a clear picture of the offering’s uniqueness and value to customers. This is a much more difficult task than in a product company, where the physical reality of the product is a straightforward basis for developing a solid description of the business.
3. Customer experience: In a service business, the customer is more directly involved in the operations of the firm than in a product company. This means that service managers must pay close attention to how customers explain their needs and desires. They also must be mindful of the effect that customers’ behavior has on the cost and quality of service deliveries.
4. Management of people: In a service business, managers must address issues of human resources management in a far more direct and complex way than they do in a product business. This is a challenge because, as with product companies, employees are key to the health of the business, and their performance affects the customer experience and, in turn, the firm’s profitability.
5. Management of assets: In a service business, the physical value of assets can’t be stored for future use, and the costs of ownership must be managed on a day-to-day basis. As a result, the manager must manage the business’s physical assets in a manner that optimizes efficiency and effectiveness while keeping the business financially healthy and solvent.
6. Management of assets: In a service business, managers must take into account the role of customers in the operations of the firm. For example, in an architectural firm, the client may have a very clear sense of what he wants the new facility to do for him, and his input will influence how efficiently and effectively the firm produces the final design.
7. Management of assets: In a service business, executives must be aware of the role of people in the operations of the firm and how their behavior can impact the firm’s efficiency and quality of service delivery. For example, a customer who dithers at a fast-food counter can make the process of producing a sandwich slower and less efficient for everyone behind him.