Runtime business service is authored in the client while the repository business service is done in tools. The repository business service is compiled into the SRF file to be used. Each time the runtime business service is executed, the definition is retrieved from the database and compiled. To prevent the runtime business service to compile each time, the cache flag can be set. By doing so, the business service is compiled once and stays in the cache during the entire user session.
Run time Business Service is loosely coupled and "Interpreted" directly. the Repository Business services are tightly coupled and hence perform generally faster than run time business services.
When ever business requirement is not very clear or business is having a part of requirement which is keep changing in that case Runtime BS would be a better choice because it doesn’t need any downtime to take effect in system. For the requirements which are stable enough and not changing very frequently we should go for Repository BS. There are couples of drawbacks with using Runtime BS like performance issue, migration issue, maintenance issue etc, whereas repository BS is having one limitation that it would require down time if there is any changes is needed in BS.
Client - side business service is stored in the siebel databse that store user data (S_RT_SVC).Repository BS is stored in repository table (S_SERVICE).
If a business service is created at client side and at repository with the same name then client-side business service will never will get executed.