What’s the difference between BPO, BPM, and BSO?

Understanding the difference between BPO, BPM, and BSO is important because each approach offers unique strategies and tools to improve various aspects of a business, from specific processes to overall success. Combining business process optimization (BPO), business process management (BPM), and business success optimization (BSO) into a unified approach can lead to comprehensive business excellence by aligning overall business goals, addressing specific process improvements, and managing the entire process lifecycle. This integrated strategy ensures that the organization is optimized around business objectives (usually expressed as financial health), resulting in higher efficiency, effectiveness, and sustained success.

At a high level, BPO, BPM, and BSO are unique in that:

• BPO is tactical, used to improve and streamline specific business processes;
• BPM is a systemic approach to manage the lifecycle of business processes, from design to optimization; and
• BSO is an overarching strategy to optimize business success by aligning people, processes, and technology around business objectives.

In reality, business process optimization and business process management support business success optimization, but they are only part of the BSO effort.  To fully understand how BPO, BPM, and BSO fit together, let’s examine the purpose, focus, and characteristics of each one.

BSO: A clear strategy and direction

Business success optimization (BSO) is a strategic approach that focuses on driving sustainable business success rather than isolated improvements to individual processes. It involves aligning all aspects of the organization, including culture (meaning people, metrics, and accountability), processes, and resources (including technology) around business objectives (the goals) to achieve the highest level of performance and success. Key characteristics of BSO include:

• Strategically aligning processes around business health (often but not always expressed in financial terms like cash flow, strong revenue generation, effective cost management, solid profitability, and the ability to access capital when needed, while other measures might include regulatory, employee satisfaction, or other critical business outcomes)
• Assigning the right people, and ensuring they are measured and recognized for doing the right tasks the right way
• Intense drive for competitive advantage through customer success and market innovation
• AI, automation, and the right data to enhance decision-making
• Operational agility and proper controls to adapt to changing conditions

BSO is a comprehensive view, ensuring that people, processes, and technology work harmoniously to reach the organization’s objectives. It's the only way a company can create strategic alignment for long-term business success.

BPM: Structural framework to manage and standardize processes

Business process management (BPM) is the structural foundation to ensure business processes are well-defined, scalable, and repeatable. It’s a broad approach that encompasses the entire lifecycle of business processes, including design, modeling, executing, monitoring, and optimizing processes on an ongoing basis. It's about having a systematic and holistic approach to managing and improving business processes.

Companies use BPM to standardize and automate processes for smooth workflows, and key functions of business process management include:

• Standardize processes for consistency
• Automate workflows to reduce manual effort
• Manage compliance and governance to meet regulations
• Monitor performance using KPIs and metrics

BPM is the structural discipline within BSO to ensure workflows are efficient, compliant, and repeatable; it’s the backbone of a business optimized for success.

BPO: Tactical weapon to fine-tune processes

Business process optimization (BPO) focuses on enhancing and improving existing business processes at a point in time. The goal is to make these processes more efficient, effective, and adaptable to changing business needs. It involves identifying bottlenecks, redundancies, and inefficiencies and then implementing changes to streamline operations.

We view BPO as a tactical enhancer to fine-tune processes for maximum efficiency and reducing costs. While BPM creates structure, BPO focuses on specific improvements within the structure. Key functions of BPO (under an umbrella of BSO and BPM) include:

• Streamline specific workflows to eliminate inefficiencies
• Reduce costs and cycle times for operational gains
• Enhance automation with AI and robotic process automation (RPA)
• Fix bottlenecks to improve throughput

BPO improves individual processes within the BPM framework, to serve the overarching BSO strategy.

BPO is good for efficiency, but BSO required for sustainable results

Of course, nobody would argue with making things more efficient. But that’s exactly where business process optimization (BPO) and business process management (BPM) end: making isolated improvements. Because they focus narrowly on making things more efficient, a company using just BPO or BPM (without BSO) won’t necessarily hit their most strategic goals. Ultimately, neither practice on its own ensures long-term business success. But why?

Today, manufacturing companies and supply chain organizations need more than just isolated efficiency improvements for sustainable financial health. They need to orchestrate many moving parts to hit and sustain cash flow, strong revenue generation, effective cost management, solid profitability, and the ability to access capital when needed. In contrast, efficiency improvements are the entire focus of both BPO and BPM.

On the other hand, when a company integrates business process management (BPM), innovation, and strategic decision-making, it elevates BSO as the holistic framework to ensure it operates efficiently, competitively, and sustainably. BSO doesn’t reject BPO or BPM; instead they play key roles in structuring and refining processes within the framework of BSO.

Real-world use case of BSO supported by BPM and BPO

A few years ago, I worked with a COO of a multi-national manufacturing company that sources materials globally, produces regionally (around the world), and distributes globally.  To ensure smooth operations, he wanted:

• A big-picture strategy to align suppliers, logistics, production, and market demand (BSO);
• Well-orchestrated workflows for supply chain planning, procurement, inventory management, and order fulfillment (BPM); and
• Process enhancements to eliminate inefficiencies in production, warehousing, and transportation (BPO).

The COO asked us to guide him in leveraging BSO, BPM, and BPO to his company’s best advantage. First, we helped him use business success optimization to create a supply chain strategy – we urged him to shift his perspective to think of BSO as the chief architect of their supply chain. He put in place a holistic strategy to ensure that every part of the supply chain works together to maximize profitability, agility, and customer satisfaction. The organization:

• Aligned metrics for procurement, manufacturing, and distribution around business goals;
• Used AI-driven demand forecasting to prevent shortages and excess inventory;
• Built in supply chain resilience against disruptions like geopolitical risks or raw material shortages; and
• Integrated sustainability and cost-optimization efforts across the entire value chain.

Using BSO supported with BPM and BPO, the COO’s company was able to ensure fast, cost-effective, sustainable product delivery, giving them an edge over their competitors, which in some cases includes Amazon and Walmart. The key takeaway: They didn’t just look to BPO or BPM to optimize processes; they aligned all supply chain functions to support overall business outcomes.

Ultimately, understanding and effectively utilizing BPO, BPM, and BSO can significantly elevate a company's operations and strategic direction. By integrating these approaches, businesses can achieve much more than isolated process improvements in the form of holistic, sustainable business success. Aligning specific process optimizations (BPO), systemic management of processes (BPM), and overarching strategic goals (BSO) ensures that every aspect of the organization works in harmony towards sustained efficiency, competitiveness, and long-term profitability. This comprehensive approach is the key to thriving in today's dynamic business landscape, where only the most agile and strategically aligned organizations can truly succeed.