A business service is a product or activity that is offered to customers in exchange for a fee. It can be anything from teaching children at school to consulting on marketing strategies for a remote firm.
Business services are a major sector of the economy and contribute to 11% of GDP worldwide. They have been growing rapidly in recent years and are expected to continue to grow with the emergence of digital technologies.
Unlike goods, which are physical and have a fixed price, services can only be provided in a practiced form. This makes them intangible and inconsistent. In addition, services cannot be stored for future use like goods can.
There are four important elements that help shape the design of a service: customer needs, balancing, business context, and product differentiation. Managers must get these four to work together, or else the entire operation will fail.
Customer Needs
The first and most crucial element of the service design process is to understand the customer. This is accomplished through a series of techniques that can be applied to identify and translate the customer’s needs into simple measurable requirements. These needs can be compared to the needs of other key stakeholders in the organization and analyzed using powerful tools.
This information can be used to design an effective and efficient business service that meets the needs of the customer. It is the basis for developing a service value proposition and positioning in the market, as well as for determining how to allocate assets and resources.
Business Context
The second and most important element of the service design process is to understand a company’s business context. This includes understanding its competitive environment and how it is likely to change in the future. This is particularly critical for businesses that are attempting to create new product-service combinations or launching new products in the market.
Lastly, managers must consider the unique characteristics of the business service they are trying to create. These are different from those of the product they are creating, and can present challenges to management practitioners who are used to managing product-oriented companies.
For example, a company that offers financial services will have to distinguish itself from other companies in the field, which can be difficult for a customer who is not familiar with the industry. This is why it is vital to create an attractive brand that consumers will find compelling.
In contrast, a company that provides training will need to be careful not to confuse the customer’s expectations of what they are paying for with what is actually being delivered. In this way, the company can effectively build a reputation that serves as a barrier to entry for potential competitors.
Finally, a business that provides software services will need to ensure that their customers’ devices are protected against viruses and other malicious programs. This can be done by introducing an anti-virus system to their systems or by updating applications for improved security.
