Business Services Design and Management

Business services

Business services are a broad industry with many different types of activities. It includes advertising, marketing, consultation, logistics (including travel and facilities services), waste handling, staffing services, shipping, administration and security services to name a few.

The Business Services Sector is one of the largest service sectors, contributing 11% of EU GDP and playing a central role in the’servitisation’ of the economy. While the sector faces low average productivity and persisting legal barriers, EU Internal Market legislation and policy actions aim at stimulating the growth of this important industry.

Unlike goods, which have a physical form and can be stored for later use, services cannot be stocked in advance. Moreover, they have to be provided when demanded by the customer.

A service business needs a solid idea and the resources to make it work, including capital and people. But most importantly, they need to be able to deliver on their promise of value to customers and make sure that their offering is attractive to them.

Design and management of service businesses differ from those of product companies, but a basic approach has emerged that can be used to build profitable service firms. It is based on four critical elements:

1. The soundness of the offering 2. The management of people 3. The interaction between customers and the company 4. The experience of the customer itself.

While the first three aspects of service-business design are not new, the fourth is a whole new area in which managers have to grapple with the unique challenges of this type of operation. These challenges are derived from a number of fundamental differences between product and service businesses, which often require a fresh look at traditional management practices.

Posted in: Gembing