Expanding operations abroad requires making many decisions, and the first thing you should have on the table is which growth model is the best for you. The most popular options are staff augmentation services, business process outsourcing, project outsourcing, and the less understood Build Operate Transfer model.
In plain English, this model is a collaboration with an IT outsourcing partner, commonly a native provider in the region where the company seeks to grow its workforce or presence. The outsourcing partner sets up everything necessary to build the new offshore or nearshore team, bringing it fully operational and then transferring it to the client company.
The particular benefits of outsourcing with BOT may differ for each case, but in general, these are the seven proven advantages of the Build Operate Transfer model:
- Know-how: This is possibly the most important factor when growing a team abroad. Laws, government agencies, and businesses vary from country to country. So having local IT partners with market experience is one of the best ways to expand in another country.
- Knowledge transfer: Before taking on all team responsibilities abroad yourself, you will have the opportunity to gradually obtain all the information you need in a controlled and risk-free manner.
- Minimize risks: There are always risks since each country has different socio-political and economic situations. However, with the BOT model, most of the risks associated with these variables are minimized since the outsourcing partner already understands the country’s conditions in which it operates.
- Time it takes to become fully productive: Significantly reduces the time required to start operating. The BOT model uses the supplier’s recruiting capabilities, existing staff and infrastructure, and knowledge of local laws, the business environment, and the job market.
- Minimize upfront costs: The BOT model reduces upfront investments related to hiring, office facilities, and legal paperwork.
- Scalability: The staff is easily scalable at each stage of the BOT model. Even when operations have already been transferred, the partner can continue to serve as a talent provider and recruiter.
- Delivers Long-Term Gains: The BOT model is designed to provide high-quality results over an extended period.
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Which companies are most suitable for Build Operate Transfer?
The BOT works best for startups and midsize companies with sufficient funds to grow and maintain a highly productive offshore or nearshore information technology team in the medium and long term. In addition, this model is designed for technology companies that want to access the global talent pool, secure their intellectual property rights, and focus on programming.
On the other hand, the BOT is best used in development teams of 10 or more employees.
If you are looking to hire smaller teams or for periods of less than two years, the service that best suits you is Staffing.
Workflow and Timeline for Build Operate Transfer
The Build Operate Transfer model in the software outsourcing industry, as its name suggests, is divided into three distinct stages:
The outsourcing partner recruits the talent, hires the dedicated office space, configures the equipment and technologies necessary for the company’s needs.
It is essential that before you start to build the team, the objectives, requirements, and expectations are clear between you and the partner.
Note: This phase can remain ongoing throughout the timeline as the staff continues growing according to the company’s needs and the project. The objective in this phase should be to build the core team.
- Analysis of the BOT project and its requirements.
- Establish a core team, office space, and infrastructure.
- Establish communication channels.
- Knowledge exchange agreements.
- Responsibilities matrix.
- Equipment configuration.
- Recruitment and staff selection.
- Build a successful partnership
Time to complete this phase: 3 – 6 months
During this phase, the outsourcing partner fully manages all operations reacting to the project. However, at CodersLink, we carry out a more collaborative process so that the company has control over the project (KPI’s and SLA’s, reports, software development, quality control, etc.). At the same time, we manage everything related to the staff and offices (contracts, payroll, legal regulations, perks, recruitment, cancellations, etc.).
At this stage, the knowledge transfer process takes place, and it is also the right time to establish the best practices and culture of the company in the staff.
- Daily, weekly, monthly, and quarterly periodic communications.
- Reports necessary for project management.
- Team management in cooperation with the company.
- Management of necessary replacements, office and IT administration, and human resources, legal and financial functions.
- Staff management under the client’s business culture.
- Transparency in costs and processes.
- Protection of the client’s intellectual property.
- Expand or reduce the team on demand.
Time to complete this phase: 18 – 48 months
In this transfer stage, the partner yields all responsibilities and processes related to human resources and office management. This must happen as long as the company is declared ready to take control and legally authorized to operate in the country.
The transfer phase can occur at any time in the BOT model. However, it has better chances to be successful if it is carried out after the first year and is more recommended after 18 months of operation.
Although this is the final stage of the BOT model, the company can still work with the outsourcing partner. The cooperation can continue under a new participation model (Staffing, On-demand talent, etc.) if necessary.
- Define and pay the transfer fees for each employee.
- Transfer the space and office equipment.
- Legal, commercial registration in a foreign country.
- Training and support HR processes (this includes agreements, employee contracts, and the administrative staff).
- All or part of the operations is transferred to the company.
- The partner may continue providing certain functions and infrastructure elements after this phase.
Time to complete this phase: 1 – 6 months
Note: Check the transfer fees with the partner of your choice since each one handles different rates based on various parameters. It is more common for transfer fees to be higher the first year.
How to continue collaborating with CodersLink beyond the transfer?
CodersLink has a variety of services available to complement any outsourcing and recruiting strategy you choose. For example, when you have graduated from the Build Operate Transfer (BOT) model, you can count on talent on-demand to continue growing your team. You also count on us to recruit remote professionals throughout Latin America through our staffing service and thus add diversity to your team of engineers.
We have proven experience working with this model, and we have witnessed the rapid integration of the teams with our clients’ companies. NetProtect, for example, a global leader in internet security, built a nearshore team of more than 40 developers, designers, and support specialists in less than 18 months. Using a collaborative outsourcing model like BOT, NetProtect transitioned from an offshore team in Asia to a nearshore team in Mexico without sacrificing quality or budget.