Business services are the supporting functions that allow businesses to focus on core activities. These services can be provided by internal or external providers, depending on the needs of the business. External providers can provide expertise that is not available in-house, and they can scale up or down the delivery of a service as needed. For example, a firm may outsource the processing of invoices and payroll to reduce internal overhead. A company may also outsource the delivery of a service such as catering, cleaning or security to free up staff to concentrate on higher value-added activities.
Unlike goods, which can be stored and sold later, services cannot be stockpiled or delivered on demand. They are consumed as they are used. This intangibility is one of the key differences between goods and services. It is also why it can be more difficult to create business models for services, since their worth depends on the user’s experience of them. For example, a person who is dissatisfied with a massage might not return to that provider for further treatment.
The use of business services has become increasingly important to the European economy. The services sector now contributes 11% of the total EU GDP. It provides a range of products and services to support other sectors such as manufacturing, retail and financial services. These can include technical, professional and administrative services. For example, an architectural firm might hire consultants to help with a project. These consultants are providing a service, which is adding value to the product of the architect’s work.
Another type of business service is a social service, which is provided to benefit society and the environment. These are usually funded by taxes and charitable organizations rather than through direct sales. Some examples of social services include a food bank or a health clinic. The most common type of business service, however, is the business-to-consumer (B2C) service, which is a form of outsourcing. These services typically involve a company helping a consumer achieve a goal that they would not be able to accomplish independently because of a lack of expertise, training or resources.
Practitioner insight: A digital business service is a customer-facing system of engagement that consolidates and simplifies how customers access the services they need. This includes a service catalog that provides a consumable view of available services and service commitment options, and the service portfolio management that oversees the creation and maintenance of these grouped by objective and capability.
It is also essential to map out the digital means for engaging with a business service-how the customer learns about and transacts with a use case, before mapping the workflows that drive its fulfillment. This is typically done through a customer portal or a service marketplace. It is also vital that business services owners are accountable for critical service efficiency and effectiveness metrics. This helps ensure the right services are being created to meet the requirements of each target customer.