Build Operate Transfer model in IT Outsourcing

Build Operate Transfer Model in IT Outsourcing

You’ve probably heard the saying “divide and conquer” more than once in your life. But have you ever heard of Build-Operate-Transfer? 

In this article, we’ll explain everything you need to know about BOT, how it is useful in IT outsourcing, and which companies use this model. We also look at specific example projects and contract examples. Furthermore, we discuss the ways in which you can find a company with a team of experts specializing in specific technologies. Let’s go!

What is Build Operate Transfer? How does it work?

According to Gartner IT Glossary, Build Operate Transfer (BOT) is a contractual relationship between an organization and a Build Operate Transfer company. 

In other words, it’s a service provider that sets up, operates, or optimizes a specific business or infotech process service delivery and transfers operations to the organization.  It is a process by which a company contracts the creation of a complete business for itself and takes it over once everything is ready and working.

Most often, this method is used to finance significant and complex infrastructure projects in developing countries that cannot manage these projects on their own. As can be seen, this definition is more about international and intergovernmental relationships, as contracts in the Operator Model IT can be made between companies, as well as between countries. 

Build Operate Transfer model in IT outsourcing

According to The United Nations ESCAP, the key features of the Build Operate Transfer (BOT) model are the agreement between the contractors involved, a fixed period of time to complete the contract, and the final return of ownership tower.

In this way of understanding, Build-Operate-Transfer (BOT) is the model where a software house builds, optimizes, and manages a fully operational software development center until it reaches satisfactory maturity. Then a full transfer of ownership to the customer is implemented. 

The BOT model is a simple and effective way to outsource software. It allows all clients to build and manage an outsourced unit on demand, which can be fully transferred later so that your risk is minimized. Thus, the agreement for the software operating model works for both large intergovernmental deals and smaller partners. 

But how does the interaction in BOT Build Operate Transfer offer so many benefits, and why is this approach simple and practical for companies, as well as for the other participants in the process? Let’s shortly sum it up.

The advantages of the BOT model

Each outsourcing model offers certain advantages. Depending on the requirements of the project, the BOT model may be the right choice.

The advantages include the following aspects:

  • Fast implementation and release of products

Software development is performed by experienced programmers who work on a project continuously. With the expertise of the executing company, products can be brought to the market quickly. This is as important for the client company as it is for the outsourcing partner, which is why both parties work effectively on it.

  • Minimize risks

With Build Operate Transfer, project risks can be minimized because the BOT company makes all the investments. A comprehensive check beforehand enables both companies to find out whether the idea can be implemented profitably. The service provider knows the local conditions and can effectively solve any problems that arise due to its experience.

  • Flexibility 

A BOT team can be flexibly expanded if the project requires it. In addition, employees can also work on other tasks and switch flexibly between different jobs. Collaboration with existing in-house teams works better because BOT project team members are fully integrated and share the company culture.

  • Deployable resources and scaling

In the end, the client company gets assets and a team that can be put to immediate productive use. The business continues smoothly after the handover, or new products can be developed. The team and infrastructure are complete, and the entire setup process is eliminated. This also increases scalability in projects, because during the set-up phase the BOT company recognizes bottlenecks and resolves them. The customer company can concentrate entirely on its core business and expand its operations.

The Summary

If you’re interested in IT outsourcing services, be sure to reach out to us, and we’ll be glad to answer all your questions and support you in recruitment processes.