The business services sector is a critical part of many economies. It includes businesses that deliver services to their customers in exchange for money, such as banks, insurance companies, transportation companies, and cleaning firms. In some countries, service industries contribute over 50% of GDP.
Unlike products, services are intangible goods that cannot be produced and sold; they must be delivered on demand. This makes them more difficult to describe than products and limits innovation and communication in ways that product-oriented businesses do not face.
It is often very difficult to make a case for the existence of a service business because the dominant mental image about “the way things work” in business is one of product-oriented businesses. As a result, managers are often forced to think about the business in terms of products rather than services, and they struggle to develop innovative approaches to managing service businesses.
There are four key elements that must be incorporated in the working plan of any service business: design, delivery, operation, and management. Managers must get these core elements pulling together to create a thriving, sustainable service business that can survive and thrive for years to come.
Design
The initial task for a service designer is to understand the needs and desires of the target group. This can be a tricky endeavor because many consumers have no clear understanding of what the service should be like or how it should be delivered. This is particularly true for services that are not viewed as a commodity good, such as airlines, hotels, and health-care providers.
This is why the service designer should focus less on the technical specifications of the service and more on the experience that the customer wants to have. The service designer should not only consider what the customer’s expectations are, but also how the service should be delivered and what its costs are.
Delivery
The final step in the service design process is to make sure that the service is delivered. Whether the service is in the form of a physical product or a digital one, delivery is critical to its success. This is because if the delivery is poor, customers will not purchase or use the product.
Operation
In the service business, the operations team must ensure that the service is provided at a high level of quality and that it meets the needs and expectations of the target group. In addition, the operations team must be able to manage the resources required to produce the service.
Management
In order for a service business to be successful, its management system must meet the needs of the target group. This is especially true of service companies that have many different locations.
The management of a service business requires a different set of skills than those used by the managers in product businesses. These skills are essential because the health of the business depends in large measure on the soundness of the service itself, which is a more abstract and less tangible asset than a concrete product.
