What Are Business Services?
Business services are a subset of economic services. They do not deliver tangible goods but are primarily sold to organizations. The following points discuss some of the characteristics of business services. A business is concerned with building a service system and providing value to customers. The business is both a service consumer and provider. In order to differentiate between these two types of service, the focus of this article is to define them. So, what are business services? And, why do they matter?
Business services are a subset of economic services
A subset of economic services is business services. In general, these services are vital to the functioning of an economy, and are increasingly integrated into production processes. For example, without banking, insurance, and transportation, no business can operate, and without cleaning and waste management, a business cannot operate. Similarly, a business cannot function without a supplier of IT and logistics services, which are business services. In low-income countries, the service economy makes up more than 50% of GDP.
They are non-transferable
Business services are intangible in nature. You can’t touch or see a business service, so you can’t check its quality before using it. You can’t simply give a beautician money and then buy the service back. You can’t even transfer ownership of your services to someone else. Because they’re intangible, they are non-transferable. Therefore, the service provider must do their best to provide a great service.
They do not deliver a tangible commodity
A tangible commodity can be a physical product such as a car, but a business service is not a tangible product. For example, a cable television company needs to provide a cable hookup and cable repair service. But a financial consulting firm does not have a tangible commodity to deliver – they may only need textbooks, professional references, and spreadsheets. Other recent examples of services are IT, BPO, and BT.
They are primarily sold to organizations
There are many different types of business services, but they all share a common model. These services are typically sold to organizations and represent a large industry. Examples of business services include financial and management services, accounting services, and software. Others include work as a service, software development, and training services. Finally, many businesses sell insurance services, such as workers compensation insurance. In addition to the types of services offered, businesses also sell products to organizations.
They can be organized by business unit
A business service or product is generally separated into a number of business units. Each unit can have its own processes and policies, while reporting to the company’s core business. Large companies often use a business unit structure for this reason. It allows the different units to monitor their own metrics, such as profits and costs, while remaining under the umbrella of the core company. This helps companies to ensure that they’re spending money on the right things.