Business services are those activities that support a business yet do not produce a tangible commodity. This category includes the work of information technology (IT), procurement and shipping. It also encompasses specialized service businesses, which are often hosted in India.
The EU has a number of legislation and policy actions that aim to address the challenges facing business services and stimulate their growth potential. These include the Integrated Industrial Policy and the Single Market Act I.
These policies seek to remove legal barriers, such as the Services Directive, that hinder business services providers from establishing and providing in other countries. They also aim to improve competitiveness in the sector by facilitating cross-border services.
Design
The key challenge for managers in the service industry is to ensure that their offering effectively meets the needs and desires of an attractive group of customers. To succeed, they must be able to design a service that combines four elements:
Cost of delivering the product
In a product business, costs are typically derived from production processes and incurred directly by the company. This helps to maximize profits. However, in service businesses, costs are often not incurred directly by the company and may be a function of factors outside of the control of the business.
A good example is the pricing of a product, which is largely driven by what the customer values the product. It is also influenced by competition and the level of demand for the product.
There are a variety of ways to price services, including fixed or hourly rates, flat fees, discounts and per-service charges. It is important to keep these options open to determine the best way to charge customers.
Customers are the main stakeholders in a service business, and their input has a large impact on the quality of the product. For example, if the customer explains his or her requirements for a project poorly, that can have an effect on the design process and ultimately on the product.
Employees are the second major stakeholder in a service business, and their performance affects how well the service is delivered. For example, if an employee takes a long time to complete a project or tries to rush a job, this can have an adverse effect on the performance of the overall service operation and the experience of other customers who depend on that service.
The third major stakeholder in a service business is the people who use it. They are a valuable source of input on the design and performance of services, but they are also subject to a lot of change over time.
When the workforce changes, it is crucial to ensure that service operations are streamlined. By implementing effective service management processes and by creating effective communication systems, the business can minimize disruptions to its customers.
Shared services are an increasingly common way for businesses to reduce costs, improve service levels and streamline their operations. One of the most popular shared services is human resources, which allows businesses to consolidate payroll processing, benefits administration and other HR functions into a single department. This can save time and money, while also allowing businesses to achieve economies of scale.