The growing importance of industrial services to industrial firms makes it important to increase the understanding on how to manage the service business. In this paper, the industrial service function concept and its components are introduced. Furthermore, we discuss why and how the industrial service function can be a useful concept for addressing challenges of managing services in industrial firms. The service function does not only include the service organization but also other organizational units that directly, or indirectly, have a role in the service processes. Although the service organization most likely is the key entity, it is only one subset of the service function; sales product development, manufacturing, senior management, and other organizational entities, as well as external service providers and customers, are to be seen as part-time service functions that influence the offering. Increasingly, other parts of the service function than the service organization are central for competitive advantage through industrial service offerings.