What are business services? Business services are a subset of economic services that are technically oriented and provide value to internal and external customers. They exist on a continuum between commodity and service, and they are growing in emerging markets around the world. In this article, we’ll explore the basic characteristics of business services and how they differ from economic services. The first characteristic is that business services are not transferable, unlike commodities. Businesses act as both service providers and consumers.
Business services are technical services that provide value to internal or external customers
In IT terms, business services refer to the range of services an organization offers to its customers. Examples of these services include verifying internet access, website hosting, remote backups and storage, and online banking. Each service comes with a corresponding Service Level Agreement (SLA) and terms of service. Each SLA defines the level of power and availability of a specific service. By combining these two types of services, IT departments can provide the business with the technology it needs to succeed.
Before implementing business service delivery, organizations must first define what types of services they need and define their total service offering. Business services should focus on strategic business value, and they should be organized into logical service portfolios, based on availability, scope, pricing, and required agreements. This approach also helps to measure the success of service delivery management. There are many benefits to defining your business services and mapping them to your organization’s needs.
They are a continuum between service and commodity
The traditional division of commodities into two major categories: commodities and services is a simplification of the issue, as most goods and services fall somewhere between the two. In some cases, however, products fall on both ends of the continuum, such as restaurants, which provide both a physical product and a service. Some utilities provide services exclusively, while others deliver both commodities and services. Electricity supply, for example, is a service in the United States but a good in the European Union.
In contrast, goods can be either soft or hard. Soft commodities, such as food, are not long-term and can be replaced. Hard commodities, on the other hand, can be mined or extracted but are not consumed afterward. Because they are raw materials, commodities are often interchangeable, and there is no value added to them. A good example of a commodity is crude oil, gold, wheat, and other commodities.
They are non-transferable
Unlike tangible products, business services are non-transferable. Because of this, it is impossible to exchange them. For example, a lady hiring a beautician cannot purchase the service and then use it for another date. She will need to pay the beautician again to use it. Therefore, business services are non-transferable, and ownership cannot be transferred to a new client. This makes them ideal for businesses where consumers are active participants.
A business service cannot be stored for future use, and is provided only to the service user when requested. Finance is the most important input in any business, and ensuring that banking facilities are efficient is key to keeping costs low. Insurance services protect businesses against risk and act as an auxiliary to trade. These insurance services also help businesses recover losses if they incur them. These services are often intangible, and cannot be demonstrated by touch, smell, or taste.
They are growing in emerging markets
The number of people living in the world’s emerging markets continues to increase, making them prime candidates for international businesses. These countries’ growing population, expanding urban areas, and rising purchasing power have made them prime candidates for international investment. Moreover, many emerging markets are diversifying their investment offerings and issuing green bonds, in addition to their traditional stock and bond offerings. The creation of a large trading bloc in 2020 will further benefit markets in Asia and Africa. Furthermore, the African Continental Free Trade Area (ACFTA) has boosted regional trade.
The rapid income growth of emerging markets creates a large consumer class. However, this class is largely undeveloped, and there are many challenges associated with it. There is little infrastructure and few institutions to facilitate business. However, China has grown beyond the emerging market status. While hiring workers, setting up logistics, and planning logistics in emerging markets are different from those in developed countries, the challenges and opportunities are not the same. For example, it may be difficult to find suppliers or recruit workers in an emerging market.