A business service is a non-financial activity that benefits companies without supplying physical products. These services help businesses improve their work environment and business processes.
A Service is an intangible product that cannot be touched and is experienced by a customer rather than consumed. The process or experience of a service can vary greatly depending on the provider and the circumstances.
Service-oriented businesses often operate in an environment where the customers have a strong influence on how service is delivered, to a much greater degree than for product-oriented firms. The input of a customer can affect the speed at which service is delivered, the quality of the service and the overall cost of the service.
There are four critical elements that must be addressed in the design of a service: value, design, people and process. They must be able to pull together or the service will fail.
The first step in the design of a service is to identify and understand the needs, desires and experiences of an attractive group of customers. This involves a shift in perspective from one that is focused on the characteristics buyers value to one that is centered on how customers want to interact with their experience of the service.
The service model provides a way of thinking about these issues that can be used to guide the strategic management of a service business. It is a core teaching module at Harvard Business School and is based on a framework that acknowledges the differences between service and product businesses.