How Can BOT Software Outsourcing Model Benefit Your Startup
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As more Startups embrace new trends, the need to invest in technology and grow their product is expanding. With the rapid changes, other operational priorities exert pressure on their financial abilities. So, many Startups are not adopting the BOT as a preferred project financing method.
The client hires the vendor to fund, build and operate a business operation or facility. The facility of business operation is established in a new country or territory. It is beforehand stipulated that the vendor will transfer the facility’s operation to the client after completion.
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What is a BOT Model?
BOT stands for Build Operate Transfer. In this model, a business or company hires another organization to build and manage IT operations. But, the vendor is required to transfer the operation to the parent company once it is up and running. The model involves three stages, namely “build,” “operate,” and “transfer”.
Build
This is the first stage in this model. It involves creating an operating unit. These include choosing the right buildings and employing staff installing infrastructures. Some of the infrastructure IT systems and internet, setting up a legal and administrative framework.
Operate
Operate involves managing the offshore project after its establishment. The stage requires product support, program management, maintenance, growth, and upgrades.
Transfer
As the name suggests, this stage involves transferring the project’s ownership to the client. But, the transfer only happens when the agreement expires. It can also happen when the client is ready to manage the project. The stage involves handing over assets, transfer of operations, and a new offshore subsidiary for the client.
The BOT outsourcing partner will offer support on these activities:
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Benefits of the BOT Model to your Startup
Businesses providing the IT services on this model have access to talented developers in various places across the globe. Most companies can establish IT facilities from scratch for their clients. Here we look at the benefits of the?BOT model?to your business.
1. Increases profits and enables a business to save money
The BOT model aims at minimizing costs in any possible way. Remember, business is all about the amount that you save in your operations and not only what you sell. According to studies, the BOT model saves about 60 percent of the normal costs in the offshore team. Besides, the BOT model also operates and manages the project itself. The amount saved through the BOT model can help hire more dedicated experts and enrich the company’s employees.
2. Minimizes risks
Risks are common in the business world, but the BOT model helps lower risks by providing investor diversification. Moreover, the model also offers a diversification of the workplace or workforce. While offering flexibility to any business to avert any emerging issue.
3. Ensures products reach the market faster/Shorter delivery time
BOT model manages the 24/7 business cycle, which helps in accelerating the production process. The model enables your startup to take improvements and products to the market quicker. This is because the resource team is usually in a distinct time area.
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4. Provides great control over offshore operations
The BOT model allows your business to have great control over your nearshore and offshore team. With the model, you are likely to make all the rules and maintain control over the entire process. This helps ensure that the process runs in alignment with the compliance requirements and strict security. Moreover, the transfer process can be based on efficiency-related performance metrics. This ensures that you have more leverage in maintaining control of your team of remote employees.
5. Provides great flexibility
BOT is ideal for insourcing purposes. It offers much flexibility in leveraging your resources in case there is a significant change in the business. In short, the model provides your business with the flexibility to switch your tasks or projects. These may be the projects assigned to your offshore or nearshore teams when necessary. With BOT, it may also be easier for your in-house team to work with the external team in your model. This helps enhance the quality and speed of delivery.
6. Ensures greater alignment with your Startup's culture
BOT model offers greater alignment between your corporate culture and your outsourced team. A dedicated team model also provides a higher level of alignment when done well. But, the BOT model takes the level of alignment to a new level. This enables you to start fostering your business’s culture from the initial stages.
The business culture includes direct communication between the parties involved and talent selection. Thus, the BOT model makes it easier for you to transfer your business’s best practices to your overseas location.
7. Availability of the local knowledge
When it comes to the success of business in overseas markets, local knowledge is critical. Venturing into new territory without a clear plan and knowledge of the market is a huge business hazard. The language, law, culture, and ways in which business and government institutions operate vary. This is common in developing nations, which form the new outsourcing destinations.
So, you should rely on a local?software development outsourcing?partner to establish your business’s presence in a new location. Doing this will enable you to get all the necessary information in an almost risk-free manner. Once you are well-informed about the new country, you can take responsibility for the overseas operations and run them on your own.
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How a Dedicated Team Engagement differs from BOT Model
The BOT model differs from other?IT outsourcing?partnerships, including the DDC or dedicated team model. Understanding these differences is essential as it helps gauge the relevance of the BOT model. The level of significance refers to the suitability of the model to the unique business goals and projects.
As mentioned above, the BOT model is designed to help establish a fully functional development center. The contract provides that the ownership should be transferred to the client after the stipulated period. You are entitled to intellectual property, infrastructure, knowledge base, and other related assets.
Moreover, a BOT model enables you inherit a well-coordinated team of dedicated experts that have proven worth in your business needs and project. This benefit saves you the hassle of recruiting, training, and hiring the whole team on your own.
But, a dedicated model does not allow you to keep the outsourced team of developers after the completion of the project. It is also important to understand that most vendors in dedicated teams are not willing or able to help you register a foreign subsidiary. This is usually because of the lack of capabilities, knowledge, or willingness to let their most valued talent go.
Usually, the BOT model makes your development team more fully aligned with your company’s culture. This helps create a solid connection with your business. This helps enhance productivity, reduce turnover and enhance the quality of work. Once the team is aligned with your company, you can nurture your remote employees and give them a career path in your business.
Although the two IT outsourcing options have significant differences, both are effective. Yet, the Bot model would be the ideal option if your project requires ten developers or more or if it is likely to last for more than three years.
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Conclusion
In conclusion, the BOT model is a popular IT outsourcing engagement that is ideal for various businesses. This includes companies that intend to establish developers in offshore or nearshore locations. The model is more suitable for companies with intellectual property and strict data. It is also ideal compliance and other regulatory requirements ideal for an in-house team.
Moreover, the model ensures you have control over your remote assets and resources. This allows you to upfront costs associated with establishing offshore and nearshore software development or IT facility yourself.