Business services are activities that benefit companies without supplying them with physical products. These activities often include marketing, production, safety and cost reduction. Many service businesses also provide specialized training for companies and their employees. These companies can be found in a variety of industries and niche markets. The success of any service business depends on a combination of factors, including high quality customer service, strategic management and a unique market focus.
Many modern business theorists see a continuum between pure service and pure commodity good on one end, with most products falling somewhere between these two extremes. Unlike commodities, which can be stored for future use, services must be provided when they are demanded by customers. This is one of the main differences between goods and services.
Some of the most popular service businesses include airlines, banks, computer service bureaus, law firms, management consulting firms and motion picture theaters. Most of these businesses offer a service rather than a concrete product, although some services do involve the transfer of a physical commodity — such as the written report of a management consultant.
Some business services are consolidated and centrally managed. This includes human resources, finance and accounting, information technology, supply chain and front and back office services. Using shared services allows a business to achieve greater efficiency and reduce costs by eliminating duplication of effort and enabling more effective data management. The success of a shared services model depends on strong leadership by senior managers. These leaders must be able to balance the competitive autonomy of individual service models with the collective value of shared services.