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