Business services provide support functions that enable a company to operate, such as staffing, marketing, consulting, facilities management and waste handling. These services are used by companies of all sizes, including many of the world’s largest corporations. They are also used by organizations that do not produce tangible goods, such as restaurants and hospitals. The Business services industry contributes approximately 11% of the EU’s gross domestic product and is vital to global economies.
The major characteristics of business services are that they do not involve the production of a physical product and that they are intangible, meaning that they cannot be stored like inventory for future use. Because of this, service businesses must be able to respond rapidly to changing needs and demands. They must also be able to manage their customers, who may become producers in the service delivery process.
A company that provides business services must be able to deliver on its promises, which will require the company to develop processes to ensure quality control and to measure the performance of the business and its partners. Moreover, business services must be provided at a cost that is competitive and reasonable. In addition, the organization must be able to integrate these services into its core business, while at the same time reducing its costs through economies of scale and the use of shared infrastructure.
Because of their importance to the economy, business services are becoming increasingly standardized and consolidated through outsourcing and new technological solutions. This has been facilitated by the rapid development of emerging markets, particularly in Asia, which have seen a boom in both the manufacturing and the business services industries.
One of the most significant trends is in outsourcing, with companies opting to outsource noncore services rather than investing in a costly in-house department. In addition to lowering operating expenses, outsourcing allows businesses to focus on their core operations and leave the less important tasks to other firms.
For example, instead of hiring a full-time marketing employee, a firm can contract with a marketing consultancy that will take care of all aspects of a marketing campaign, from strategy formulation and implementation to design and production. In the same way, a firm can outsource its accounting and payroll functions, as well as human resources activities.
While the demand for business services is high, there are a number of challenges that organizations face in this sector. Some of these include relatively low average productivity, persistent barriers to trade in the Single Market and legal disputes. In order to address these problems, the European Commission has launched several flagship communications and a high-level group on business services.
A career in business services can be rewarding, but it is not for everyone. The responsibilities can be demanding, especially if you are working in a fast-paced environment, and it’s not the best choice if you don’t have good interpersonal skills. However, if you’re looking for a challenging and lucrative career path, then this might be the right field for you.