The Main Challenges Facing the Business Services Sector

Business services are a wide range of activities that support a company but do not produce a tangible product. They include IT services such as data processing, telecommunications and software development; management and administrative services like accounting and facility management; and other professional services including training and consulting. Companies rely on business services to reduce costs and improve efficiency and productivity.

A key challenge in the business services industry is to align IT processes with company goals and manage IT assets to deliver value that supports business objectives. This is known as IT-business alignment and it requires strong leadership from senior managers. Without it, revenue-generating line managers will overrule shared services managers, compromising the performance of the entire system.

Other business service activities include IT support for new software and hardware platforms; onsite defensive computing training; and translation services. Companies also use business services to improve employee satisfaction and morale. For example, they may provide workout facilities or subsidize day care services to give employees the flexibility to balance work and family life.

The business services sector is a large and important part of the economy. It contributes around 11% of the EU’s GDP and has significant untapped growth potential. Despite this, the sector faces challenges, including low average productivity and persistent legal barriers in the Single Market. The EU’s internal market policies aim to remove these barriers and stimulate competitiveness in the sector. This article explores the main issues facing this growing sector.