BPM vs. BSM: What's the difference?

Several recent meetings with prospective customers that provide IT outsourcing services revealed to me there is some confusion over the differences between Business Service Management (BSM) and Business Process Management (BPM). Several analysts have written on this topic and have a wide range of opinions. Some believe the concepts are related, while some say they are not – and still others say the two technologies will merge.

In my mind, as a BSM vendor looking at the current landscape, the differences are substantial. For an IT service provider BSM is the tool most relevant to their line of work. BSM provides the ability to dynamically link underlying components to a service, enabling them to more effectively monitor, manage and report on the services they are providing. If the organisation were to expand its services to include Business Process Outsourcing (BPO) then both BSM and BPM would be useful.

Looking at BPM through my vendor-lenses, I’d suggest it generally consists of two parts. First, a monitoring piece that uses agents to monitor transaction flows at key points in a business process. The agents monitor volume of transactions, transaction response time and other similar metrics. The processes do not have to be IT-based they can be manual or even semi-automated. In some cases the agents may not operate on computers as they could even be humans counting transactions.

The second piece is a modelling part where a model of the managed process is created. This is a mathematical simulation of the real world process which uses the monitoring agents to calibrate itself. Hence it knows a volume flow of X at this point is associated with Y at another point and so on for all keys points.

BPM’s two parts also serve two purposes – it allows the real world process to be monitored and highlights problems as transaction volume flows slow or stop. Next, once it is calibrated the model can run “what-if” simulations, also known as process tuning, and can for example, detect failure volumes or weak points in the process. Process tuning can also include “what-if” scenarios of sizable magnitude: a manufacturer can learn from BPM what happens to the business process if it added another factory.

The limitations of BPM are that the technology was not designed for root cause analysis of those processes or parts of processes that are IT-based – that is BPM cannot tell why a computer based process is slowing. This of course is where BSM is needed. BSM on the other hand, cannot do mathematical simulation needed to fine-tune business process performance.

In sum, the two products have been designed for different purposes. BPM monitors and simulates business processes so they can run optimally– it can even include non-IT processes but it has a limited capability to perform root cause analysis. BSM manages – that is monitors and controls – services that run on IT components, which dramatically improved the quality of service.

For IT service provider BSM can improve their IT operational efficiency and effectiveness and if they do grow into BPO then is supports BPM with root cause analysis.

-- Jim