Business services are activities that support businesses but do not result in the production of tangible goods. These include banking, transportation and warehousing services, insurance, communication, consulting, and event management services. Many of these services are used by all types of businesses. This type of work is commonly referred to as ‘service-based’ rather than ‘product-based’ and it is an important component of the economy, especially in developing countries like India.
Business service providers provide value to customers by delivering an experience, information or goods that create a favourable impact on their customer’s satisfaction and business performance. Examples of this can be seen in the teaching by a teacher, treatment given by a doctor, and the use of software applications by business people. These experiences cannot be stored or traded as physical products can, so the supply of business services has to be closely linked to demand.
The definition of business services is highly contextual and varies from one organisation to the next. However, it is generally agreed that business services involve the delivery of intangible value to a customer and that this value is created through the use of employees, resources and technology. A key aspect of a business service is that it provides an element of choice to the customer, enabling them to make decisions that are based on their own needs.
It is also agreed that a business service must be able to be delivered consistently, with the same quality each time it is provided. This is particularly important as customers can participate in the production of a service, which may mean that demands and expectations change constantly. Furthermore, services are usually consumed immediately, so they cannot be produced in advance and stored for later consumption.
To ensure that a business service is successful, it must be designed with the help of stakeholders. This process is known as Service Design and involves engaging representatives of those who will be using the service, identifying their needs, and translating these into simple, measurable requirements that can be used to measure the success of the business service. It is also important to identify any barriers that may prevent the service from being delivered successfully, and to develop plans to remove these obstacles.
To improve the performance of a business service, a number of tools can be used including standardization and the use of business service management software. This can lead to reduced costs and improved service levels through data centralization and the ability to track progress and identify areas for improvement. This can be achieved by implementing a process that includes the definition of key performance indicators and the creation of a service level agreement. This can be done by using a framework such as the Capability Maturity Model or SCAMPI. These models provide a structured approach to managing business services and can be customized to fit the needs of individual organizations.