The success or failure of a service business comes down to whether it gets four things right. Developed as part of a core course on management at Harvard Business School, this approach to crafting a great business services organization has become the basis for my own teaching and research on managing service businesses. Here’s how it works:

Service businesses are organizations that help companies perform work by providing non-tangible offerings. The work they do helps those companies meet strategic objectives and fulfill their obligations. Small and large firms rely on many different business services to get the job done, including marketing, IT, HR, finance, consulting, and logistics. The industry is a significant driver of growth and innovation, supporting businesses of all sizes across a range of industries and sectors.

Unlike tangible goods, business services are intangible and cannot be stored like inventory for later use. They are produced at the same time they are consumed and must be provided quickly and accurately to maintain competitive advantage. As a result, the quality of service businesses often depends on the competence of workers, the speed at which work is delivered, and the level of customer engagement.

Some business services are essential to all businesses, while others may be only beneficial for certain types of companies. For example, an architecture firm can save money on tools and equipment by outsourcing its building construction to a contractor that provides professional expertise and has the necessary infrastructure in place. This allows the firm to focus on its core competencies while leaving noncore tasks to the business services provider.

In addition, business services can include activities that enhance the value of goods and products. These may include a range of functions, such as market research, product development, distribution, logistics and warehousing, and the provision of employee and temporary labor. As such, the industry is crucial to Europe’s economic success and contributes 11% of its GDP.

While there are many different types of business services, there are some common trends emerging. For example, customers are seeking more personalized and convenient services. This includes virtual services such as telemedicine, virtual bookkeeping, and online coaching. They also want mobile services, such as car detailing and beauty services that come to them. And finally, they are increasingly interested in sustainable services, such as eco-friendly cleaning and green energy consulting.

Creating a successful service business requires planning, excellent service delivery, and effective marketing. Those who understand the principles of good service design can create an innovative and profitable business that delivers high-quality customer experience and generates a steady stream of new customers. In addition, it’s important to keep up with the latest business service trends and developments to stay ahead of your competitors. So, what are some of the most important business service trends to watch for in 2022? Let’s take a look.