Business services are the non-financial activities that a company performs in order to meet its objectives. These include advertising, marketing, consultation, logistics (including travel and facilities services), waste handling, staffing, shipping, administration and security to name a few.
The value of a service depends on the customer’s perspective, and the experience is often influenced by customers themselves. For example, if a client doesn’t explain what he needs, then the service provider may be unable to deliver it at the desired quality or within the agreed-upon time frame.
A typical service can be described as a process that creates benefits for the customer by facilitating a change in one of three kinds of assets: physical possessions, intangible goods or changes in behavior. In some instances, a service is simply an incidental transfer of a product. For example, a restaurant might deliver the food, but it also provides a dining room environment and other aspects of service such as table clearing and setting.
Unlike products, which are relatively easy to describe in terms of physical reality, services are more abstract and often require multiple locations for production. This can make it difficult for companies to develop economies of scale, and can reduce the ability to take advantage of new technologies or market opportunities.
As a result, most businesses are grouped into a spectrum of service types with varying strategic management requirements. Some, like management consulting firms, are pure service businesses while others produce both physical and intangible goods and services.
For some businesses, a significant part of their business is the development and implementation of information technology (IT). An important aspect of IT is that it supports other business services such as procurement, shipping and finance. This is because IT is a fundamental part of the operation of many businesses, and an effective IT service ensures that business processes are run in the most efficient manner possible.
When IT services are centralized, they can often be managed by a single team and thereby help to lower costs as well as improve service. This can be achieved by combining several different departments and implementing standardized processes and tools to manage these functions.
Shared services, which are dedicated service delivery groups operated by a single company or group of companies, can also reduce costs through economies of scale. They allow the centralization of support functions and can be particularly useful during mergers or acquisitions, which typically involve integrating several organizations into a larger structure.
Another benefit of shared services is that they can also reduce the number of separate departments and employees in a business. This can help to break down silos and increase communication and productivity throughout the entire organization.
In addition, shared services can be used to improve performance by breaking down barriers and allowing for better collaboration. When multiple departments and employees are working together under the same roof, it can be easier to track progress and identify areas for improvement.