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    • What is BOT – Build-Operate-Transfer

    The Build-Operate-Transfer (BOT) model is widely gaining popularity in the offshore business services as it allows the client to incubate a project in an offshore destination under a regional service provider, until it reaches satisfactory maturity for full transfer of ownership. The BOT model is not Outsourcing and it has a completely different framework.

    The BOT model is a business arrangement in which an organization builds a project, operates it and eventually transfers the ownership to the client after a specific period of contract. This ensures that the organisation recovers its initial investment in a reasonable span of time.

    The term was initially coined for building generic infrastructures such as roads and shipyards. The organisation building the same is allowed to operate (and maintain) it and generate revenue to recoup the money invested in the project. The project is handed over to the public entity after a specific period.

    The BOT model in the IT set up is especially beneficial if you are into legacy systems, mainstream, enterprise applications, mobile, or a have a considerable support infrastructure. Off-shoring the projects can save you significant amount of money.

    Breaking down the process 

    Build

    Building is a set of processes involving setting up operation units which includes everything from selecting buildings, installing infrastructures such as internet and IT devices, employing staff and putting in place the administration and legal framework. It basically creates a turnkey operation.

    Operate

    The built project is operated by the organization on behalf of the client. This includes management support, setting up provisions for process documentation, training, quality, productivity control, administration, maintenance and transition support.

    Transfer

    The project ownership is finally transferred when the client is ready to take over full control of the same or when the contract expires. The transfer may include the entire subsidiary and all its assets, along with a fully operational team, taking care of all operational and legal aspects.

    The BOT model is typically useful for long term projects which involve a lot of cost and time setting up. With a build-operate-transfer model, you need to start looking ahead at the end point before the actual start of the project.

    Where are you going to be in 5 years? Are the services feasible over the long period of time? How could the company be altered in the future (possible mergers and acquisitions)?

    You will need a definite answer to the above questions, so that you would be able to get value out of the services.

    Benefits

    The numero uno benefit of a BOT model is its massive cost benefits. Typically, an off-shored BOT project saves as much as 60% of the normal cost as the project itself is owned, operated and managed by an off-shore team.

    This also provides development, support and other IT managed services utilising the skills of custom hired employees. Offshore teams can set up a project faster, which may range from 1 to 3 months for moderate projects.

    In the past, quality of services and lack of control were the prime hindering factors for the BOT model. Unrealistic promises and inexperienced workforce had made a tragic impact on the BOT business model. However, the lessons learned were laid as the foundation for more realistic and a qualitative approach. All these refined ideologies along with the massive cost benefits make the BOT model the favourite approach for 100s of software companies.

  • Watch video of how it works here