The Difference between BPO and BPM

I came across this post on BPM in Action in which Dennis Byron reminds us not to confuse BPO (Business Process Outsourcing) with BPM (Business Process Management).

Business processes that do not provide any particular competitive advantage are good candidates for BPO. Here are some processes that Dennis mentions are good candidates for BPO: payroll processing, benefits administration in highly regulated jurisdictions, purchasing office supplies, shipping small packages, demand deposit accounting in banks, anything that follows an ACORD form in insurance/assurance, and scheduling worker hours in any kind of retail operation. Any processes that do provide competitive advantage is a good candidate for in-house responsibility.

So according to Dennis, BPM is the best way to automate business processes whether it be outsourced or retained within the enterprise.