Business services are a category of industries that provide a range of support to companies. They do not produce any physical products, but instead offer services like warehousing, information technology, legal counsel and marketing. These services allow companies to focus on their core operations and improve their efficiency and productivity. These sectors are a vital part of the economy and contribute to overall economic growth.
Unlike product-based businesses, service companies do not have the advantage of creating an attractive value proposition for consumers in terms of features and functionality that differentiate their offerings from competitors. The main challenge in managing a service business is in designing the customer experience, which requires different thinking than product design. Instead of focusing on the features that will appeal to customers, service designers must focus on how those experiences are delivered to customers and what characteristics they will attribute to the brand.
As one of the largest service-providing industries, Business services contribute to nearly 11% of the EU’s GDP. They include a broad range of activities such as financial services, insurance and IT services, and are an important component of the “serviceitisation” of the European economy. This trend towards increased service provision is likely to continue as economies around the world move away from traditional manufacturing-based models toward a more knowledge-intensive, services-based model.
The industry includes a variety of subsectors, including information technology, accounting and auditing, employment services, human resources and training, and management consulting. It also encompasses a range of other, more specific services such as marketing and advertising, warehousing and logistics, facilities management, shipping and freight forwarding, and consulting. These subsectors are important because they enable the production and delivery of other goods and services, such as manufactured goods, retail products, construction and real estate.
While the scope of this sector is wide, it is generally understood to be comprised of those activities that support a company’s core operations and infrastructure. Examples of business services include warehousing, shipping and distribution, value-added services such as sorting bulk goods into customized lots, order entering and fulfillment, control and management of inventory, labeling and performing light assembly, and the creation of an online storefront for ordering office supplies.
Generally, the duties of the business services industry are to make sure that a company has the material supplies it needs for operations as well as products for sale to its customers. The industry is also responsible for administrative tasks such as accounting, taxes and payroll, investments, and other financial responsibilities. The industry also provides a number of other specialized services such as insurance for business, business travel, and event management.