IT outsourcing through Build-Operate-Transfer has become commonplace for technology companies in the West. This includes setting up cloud networks for employees of organizations for better workflow.
1. How Does The Build-Operate-Transfer Engagement Model Work?
Normally, it takes around three years for the Build-Operate-Transfer service providers to complete the setup and transfer of fully operated IT subsidiaries onshore or offshore IT subsidiaries. The process consists of three main stages:
1.1. Build Phase
In this phase, the Build-Operate-Transfer service provider starts with an in-depth analysis of your specific needs. The software outsourcing partners will try to understand as much as possible about your business goals, projects, technical requirements, as well as company culture. Once they fully comprehend what your business is all about and know what you need exactly, your outsourcing partner will find and secure the talents, dedicated office space, equipment, and technology needed to implement your software development project. Generally, this stage can be completed within 2 to 3 months.
1.2. Operate stage
In this stage, your IT outsourcing provider will manage all daily activities related to the project based on your project’s requirements and goals. They will also keep you updated on the progress, including daily, weekly, monthly, and quarterly communication, as well as other reports related to the project. This stage usually takes up to 1 to 2 years to establish a stable and fully functional development team.
1.3. Transfer stage
At this point, your fully functional development team is ready to be legally transferred as a subsidiary of your organization. The outsourcing partner must transfer all of the operations, including intellectual property, employees, knowledge base, and other assets.
The build-operate-transfer model in software outsourcing or simply BOT is often associated with financing projects, private-public partnerships, as well as infrastructure. However, in this case, we will focus mainly on its being an outsourcing model. There are more common outsourcing models, such as co-sourcing or staff leasing, comprehensive sourcing, and facilities outsourcing, which are often starting points when diving into operating offshore operations. As soon as the company is ready to take over and fully operate the entity that was once being managed by the outsourcing partner, then they may do so at any time they have formulated the decision. When that time comes, the entire operation under the outsourcing partner will be then transferred from the partner to the owner company.
2. Benefits of Build-Operate-Transfer IT staffing
The Build-Operate-Transfer (BOT) model offers a range of obvious benefits that can bring tremendous value to a business. Here are 5 benefits of the BOT model:
2.1. Full mastery of Offshore/nearshore software development
With a Build-Operate-Transfer, it is contractually guaranteed that the business’s outsourcing agreement will become part of that business’s business within the specified time frame.
This arrangement cannot be guaranteed using any other IT outsourcing engagement model.
2.2. Remove the difference barrier easily
Each region will have an outstanding specialized strength in the IT industry, so this is also paramount to bringing your business abroad. And venturing into an untapped area unprepared is a big business risk.
The culture, law, language, and way government organizations and businesses operate vary widely from country to country, especially in lower-cost developing countries.
In this sense, relying on an experienced regional IT partner is one of the best ways to establish your presence in a new country. You will have the opportunity to gradually acquire all the necessary information in a controlled and virtually risk-free manner before taking on the responsibility of IT operations in that area yourself.
2.3. Flexibility to drive change
Build-Operate-Transfer is significantly more suitable for resource recruitment purposes and gives your company much more flexibility in utilizing resources should there be a significant change in business operations. Simply put, Build-Operate-Transfer gives you the flexibility to switch offshore or nearshore teams to different projects or missions as required. BOT-based teams can also make it easier to work with your company’s internal resources, improving delivery speed and quality.
2.4. Greater control over overseas operations
The Build-Operate-Transfer ensures that you have maximum control over your or your overseas development team. You make all (or nearly all) of the rules and have a lot of control over your team’s processes. Furthermore, the final delivery can be tied to performance-related metrics, giving you additional leverage in exercising control over your outsourcing team.
2.5. Better fit your corporate culture
The Build-Operate-Transfer model allows you to take connectivity to a whole new level. BOT makes it possible for you to start fostering your corporate culture from the very beginning. This includes staff selection and direct communication between your company’s customers and the outsourcing team. It also becomes easier to coordinate best practices from in-house to outsourced development teams.
3. Why should you choose the Build-Operate-Transfer model?
With the contribution of the experienced teams with advanced technologies, the partners don’t have to spend time on self-learning and research whilst they can concentrate on developing ideas for their products and strategy in the ong term. The talents and expertise of teams allow businesses to attract and retain more team members. Thanks to that, productivity is enhanced in turn. Develop, innovate,Before and deliver products by experience to ensure quality and keep your business stay ahead of your competitor
3.2. Cost efficiency
Most enterprises would like to operate the business themselves to save costs as much as possible. However, there has always been an exception. To clarify, if you plan to build and operate a new one in a new market, It may cost you more than you expect. Instead, we have teams and experts who live and work in the market over time to deeply understand the culture, workforce, legal issues, and so on. Therefore, spending money on the right team to do the right action and solution provides short-term and long-term cost savings.
3.3. Time Management
In the BOT model, ITC will be responsible for Building and Operating the business until it is ready to transfer to the partners. Hence, the partners don’t need to focus on how to start and run your business at the beginning. ITC will handle it and recruit the employees and talents that fit your business needs and culture.
3.4. Minimize Risk
The whole process of building a business in a new market is complicated. Even when you complete the preparation and launch your business, It is no doubt that the problems which are relevant to operation, HR, and training, … are unavoidable. So that’s why we are here to help. Our expert teams are experienced in operating software development centers, managing legislative procedures, and establishing infrastructure. Also, we have experience in managing and minimizing the potential risks of running a software development center. Consequently, you can decline potential risks after you take ownership of it.
3.5. Protect your Intellectual Property
As you know, the BOT model can protect your intellectual property. Teams and Talents who are recruited will directly work for your business under contracts to protect the interests of both parties. Furthermore, all confidential information, materials, and projects are the partners’ property during the operation process. In other words, transferring process in BOT keeps all data and information remaining in your business.
3.6. Talents and employees
When we recruit and train the teams to work for the business, we have to train them to adapt to partners’ requirements and partner working culture expectations. At the same time, those talents and experts who have been recruited will work for your business and partners are their employers. Let teams integrate with your company culture, vision, and value to maximize their performance and ownership.
4. What are the variations of the Build-Operate-Transfer Model?
The different ways in which BOT works are identified according to the requirements of the project. For instance:
Build Own Operate (BOO): A part of an organization’s operations is owned and operated by a service provider. This is more like the BPO companies operating in different countries.
Build-Own-Operate Transfer (BOOT): Again a private company operates a facility to offer the best ROI to the parent company and in turn enjoys margin profits on the project.
Build-Lease-Transfer (BLT): Healthcare institutions commonly employ this method. A company signs a joint venture agreement with the public sector to own a particular project. After a minimum of 10 years, the project is leased back to operate as a business entity.
Build-Lease-Operate Transfer (BLOT): An unit is built and operated by a private firm on land leased by the public. Once the lease duration expires, the entire leased land is transferred back to the respective owner.
There are various Build-Operate-Transfer advantages, disadvantages, risks, and opportunities. You should choose a vendor who can not only take care of back-office functions for your center but also guarantee the safety of your intellectual property and ensure dedication from offshored employees. Last but not least, do not forget to share this post with your other friends. Thank you!
Get top-notch Staffing and Payroll solutions from TSC in Asia. Our services, including Staffing and Payroll Outsourcing, BPO/RPO, and BOT model, enable businesses of all sizes to hire and operate cost-effectively. Since 2018, our recruitment team has provided candidates in diverse fields catering to specific client needs, from junior to management positions.