Business services are the various activities that help maintain a company’s business operation, but do not produce any tangible products. Examples of business services include information technology, procurement, shipping and finance. Business services can be provided in-house or outsourced. In the latter case, external service providers can bring specialized expertise and efficiency to the table, making it a cost-effective solution for companies with high turnover or seasonal output.
A successful service business needs a solid working plan that incorporates four critical elements: service design, service delivery, service quality and customer satisfaction. Unlike product businesses, where the product itself is the main focus, the success of a service business relies on the intangible factors that customers will value about the company’s offering. These factors may include convenience, friendly interaction with employees or lower prices.
Companies that provide business services can structure themselves in a variety of ways, from sole proprietorship to partnerships and corporations. They can also use shared services, which offer support functions to multiple business units in one location. Shared services allow businesses to scale up or down without significant changes to the organizational structure and can make integration easier during mergers and acquisitions.
Regardless of the structure, a business that provides business services can benefit from leveraging technology to improve productivity and profitability. This can be done by automating repetitive tasks, increasing data accessibility and simplifying the use of new software and hardware. In addition, technology can increase the availability and quality of business services by providing remote access, enabling employees to work from home or on the go.
In the future, more companies are likely to utilize technology to provide their business services. Some are already doing so, such as those that offer telemedicine or home health care services. Other firms are using virtual reality to train their employees. Nevertheless, many of these technologies still need to be improved before they can be used to provide the most effective business services.
There is significant untapped potential for growth in the business services sector. To stimulate this sector, EU internal market legislation and policy actions aim to remove barriers and improve competitiveness in the sector.
Business-to-business (B2B) services involve transactions between two trade organizations and are different from business to consumer or business to government (B2C or B2G) services. A typical example of a B2B service is a wholesaler providing supplies to a manufacturing company. For instance, a car manufacturer conducts B2B transactions with suppliers to buy tires and rubber hoses for the cars it produces. Similarly, a retail store might perform B2B transactions with suppliers to purchase goods it will sell to consumers. B2B services are an essential part of the economy. However, they face challenges such as low average productivity and persisting legal barriers. The European Commission has introduced a series of initiatives to address these barriers, including the Services DirectiveEN*** and the Single Market Act EN***. These measures will help unlock the full potential of this important sector.