The Key to Success in Business Services

Business services are all services that support a company but do not create or deliver any physical products. They include such things as information technology (IT), accounting, marketing and business consulting. Companies that do not have the resources to provide these services themselves often turn to outsourcing. This allows them to access highly specialized expertise that would be cost-prohibitive for them to develop in-house.

Service businesses are a significant contributor to the economy and offer unique value propositions that attract customers. However, there are a number of challenges they face. For example, they tend to have lower average productivity levels and persisting legal barriers that hamper their competitiveness.

The key to success in a service business comes down to four critical elements that can either pull or push the business apart. It’s important that management understand these core components in order to craft a strategy for sustainable growth.

Having a strong business model that includes clearly defined roles and responsibilities is critical to delivering consistent, high-quality service. This requires a balance of revenue-generating line managers’ autonomy with shared services management’s ability to set standards, establish policies and procedures, and provide oversight.

Another important component of a strong business model is the ability to quickly scale up or down as needed. For example, when a large project looms on the horizon, it’s common for a service company to contract with outside construction crews to get the job done. This helps to reduce costs by eliminating the need for the organization to purchase or rent expensive construction tools.