Every Business is a Service Business

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e-business, m-business, s-business, Products, Service, GDPs, competitive markets, technology, quality

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After the hype, a return to basics: the virtues of conventional business virtues, among them customer service, are being rediscovered. Firms are realizing that, in order to compete successfully, they must transform themselves from being product-focused organizations to service driven ones. Excellent customer service can now be a key competitive advantage. However, the change from a product business to a service business will not be easy.

The last few decades of the twentieth century witnessed a dramatic increase in the number of books published on management; the letters that were being prefixed to the word 'business' too increased, seemingly almost in direct proportion to the number of books being published. First there was e-business, and then there was m-business - both terms which soon entered common usage, though now somewhat diminished in respectability and credibility after the dotcom and telecom busts. But the fad continues: management writers seeking to launch the next big idea, still search for more prefixes.

With all this, one hesitates to mention s-business - business with yet another prefix. However, the term seems to be an idea whose time has come. In the post dotcom world, it appears that all businesses do not have to become m-businesses, or even e-businesses, to survive. The virtues of conventional, dull old business principles have been rediscovered by at least some management pundits.

So, it does not appear to be an anachronism that the 's' in s-business stands for service, that most conventional of business virtues. The term s-business was originally coined by AFSMI1 in recognition of the growing tendency of customers to demand service deliverables that provided "more complete, integrated business solutions ," which denoted the possibility of treating service as a business in its own right. The term is also an indication of the increasing emphasis that customers are now placing on service.

From Products to Service

In many economies around the world, we have seen a shift from manufacturing to services; services now constitute a large share of the GDPs of many counties. So it seems with businesses too, many of which seem to be shifting their emphasis from products to services. Indeed, at least for some firms, their tangible products seem to have become virtual loss leaders, helping them sell services where they make a good part of their profits.

The transformation of the product businesses of yesteryears, into the service businesses of today is taking place due to a number of factors: In today's competitive markets, developments in technology have made it difficult for many companies to differentiate their products solely on the basis of quality or additional product features. For most products, high quality is now the norm, so much so that it is no longer a sufficient condition for competitive success, but merely a necessary condition. Adding new bells and whistles to existing, mature products seems to be an exercise which yields steadily diminishing returns on investments.

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