How do BOT models power Global In-house centers

How does the BOT Model help Businesses have their Cake and Eat it too?

“You can’t have your cake and eat it too” – We’re warned. Yet, we all want to. We want to get the most out of our lives. This also applies to businesses, as they want to operate efficiently while innovating, cater to today’s customers while preparing for tomorrow’s challenges, and manage legacy systems while transforming them into novel ones. Some would want to give up responsibilities and yet own and run a business. There is nothing wrong with it. In fact, our aspiration to satisfy our needs, wishes, and wants has been the foundation for many innovations. And Innovations need not be products, they can be processes or operating models too.?

BOT (Build-Operate-Transfer) is one such innovative operational model suitable for mid and large-size firms seeking to leverage offshore operations to innovate, operate, and scale up. It enables them to establish Captives or GICs or GCCs without having to worry too much about high costs or legal risks.??The model makes the transition from a new player afraid of risks to a comfortable GIC owner as smooth as possible. Read on to find out if it is really that good, and how to make it better.?

Begin with end in mind.

So, why would a company want to look for new shores in its path to growth.

• Access to talent to scale up the product and service delivery.
• Improved customer intimacy.
• Lower cost of operations.
• Tap into global opportunities.

No one size fits all, so different situations need different solutions.

1. Work with a provider on project basis: While this serves the purpose for the moment, it lacks continuity with respect to process and people.
2. Choose to do it themselves (Captive) from day one: While this offers control and capability together, the time it can take to stabilize can be significantly longer.
3. Work with a partner with long term and dedicated teams’ approach: Choice of such a partner is key, but this is a great option to kickstart the distributed teams with low entry barrier.
4. With proper governance and involvement of the right people, this can be a very successful approach: Work with a partner to setup and run a GIC and finally transition (BOT)

IMHO, For companies with strategic intent, BOT model can offer great possibility to succeed in setting up GIC (Global In-house Centre)

Is the BOT Model as good as it is said to be?

The needs of software companies keep changing with changes in technology and ecosystem trends. To fulfil them, the responsibilities of Offshore Development Centres have also been evolving. Though outsourcing in the early times meant employing teams in low-end, transactional work, it is now more about innovation and operational excellence. Offshore teams are now involved in high-value, sophisticated tasks too. More importantly, they still provide the parent companies cost advantage. With time and trust, enterprises and product builders preferred establishing GIC (Global In-house Centres) s or GCC (Global Capability Centres) s to offshoring through third-party consultancy vendors.?

Why shouldn’t enterprises and other software businesses recruit skilled talent and establish their company ODCs or GICs directly in the offshoring countries? That would be great, both for the company and the recruits working on offshored duties. Companies gain access to talent and yet save costs. Offshore Employees and their accomplishments are more visible to the onsite management, and they are a part of the very organization they work for. Despite these obvious advantages some businesses still stay away from establishing Captive GICs for valid reasons. Here are some of them.

1. The Upfront startup cost of setting up a fully owned GIC is high.
2. Investing in a GIC that takes time to mature may be risky.
3. Companies require help with legal framework and leadership to manage a fully owned GIC.
4. The rights over innovations and intellectual properties must remain with the parent company.

These imperatives led to the birth of the BOT (Build- Operate – Transfer) model.??Collaborations on BOT model help manage GICs, offer infrastructure support and help with recruitment, operations, innovation, and growth.?

Is BOT for Every Business?

BOT is not the only successful operating model. There are some others still relevant.

Some still work with services providers and outsource their projects. Such firms may lose the advantages of product thinking, but they may take up the strategic and innovative parts of their work on-site, outsourcing only the parts more suitable to be managed as projects.?

Smaller companies may only need a dedicated team. They choose to collaborate long-term with a partner like Xebia. Through such partnerships, they gain access to shared services and need not worry about infra requirements even when they need to scale up.

Some choose to establish a captive and run it by themselves from the inception. This is possible only if they have the experience, expertise, and enough resources (especially time).?

Some others choose to work with a partner to set up and run a GIC and own it completely later. This BOT model offers them help with handling initial hiccups and owning the GIC when they’re ready. It is a great option for mid-size and large businesses keen on leveraging talent from offshores without having to worry about infrastructure management.

Making the Model Work?

BOT is not fail-proof. As with any model, this one too is evolving continuously. Through coMakeIT (Now Xebia), we’ve helped numerous companies establish their ODCs and branch out as fully functional business entities. I’ve met many business leaders highly satisfied with the BOT Model and offshore talent. They wish the offshore teams to contribute to deeper innovations and handle core responsibilities. From our experiences and conversations, here are some points to consider for leveraging BOT more effectively.

1. Align your work with the parent business’ needs and strategy.
2. Contribute to core functions too, not just superficial, and good-to-have ones.
3. Upskill employees regularly.
4. Recruit or upskill employees to add domain expertise to the teams.
5. Self-organizing Agile teams are essential to build trust.
6. Inculcate cultural tolerance, on both sides.

With all the clear advantages, I think BOT is a genuinely good way to collaborate and leverage talent from countries like India with a large, highly skilled talent pool. So, happy building, operating, and owning.

There are numerous examples of flourishing GICs in India which have stemmed from successful BOT models in the recent past.

Why Xebia

Xebia has unique experience in setup and running an R&D hub for a Dutch software major. Xebia has also executed a successful BOT for a Danish software services company which has grown leaps and bounds ever since.?The ideas and concepts presented in this article have stemmed from that do-how experience.