Business services are activities that benefit companies without supplying physical goods. Examples include marketing, consultation, logistics (including travel and facilities services), waste handling and staffing services. Most businesses need these services, and they can be offered by a variety of providers.
Developing a framework for managing service business is challenging, partly because the dominant mental image of “business” has a product focus and constrains language in a way that makes it difficult to describe services. Moreover, the tools used to manage product businesses do not easily translate to service management. This article outlines an approach that begins with understanding the core characteristics of service business and ends with a discussion of four critical elements that define a successful service model.
The article focuses on the business-to-business sector, which represents the bulk of business services. In this category are marketing, logistics, and information technology (IT) services. These are different from the business-to-consumer and business-to-government categories, which provide less specialized services.
Businesses use business-to-business services to save time and money, to gain access to expertise and capabilities that they might not have in-house, and to deal with seasonal fluctuations in output. They also rely on them for improved efficiency and safety. In addition, they can use these services to develop their brand, improve customer service, and compete for customers with better convenience, faster response times, or lower prices. However, they must be careful to differentiate themselves from competitors by offering value that is distinctive, unique, or important in the eyes of their target audience.