Build-Operate-Transfer - a New Offshore Software Development Model
TECH TEAMS, SOFTWARE DEVELOPMENT | 25 Mar 2020
The ‘Build, Operate, Transfer’ (BOT) model is becoming increasingly common in the world of development. As companies look to less traditional means to fill a growing technical skills gap, the BOT model offers the perfect opportunity to create a long-term technical resource. But just what does the ‘Build, Operate, Transfer’ model entail and why are so many businesses choosing to invest in this approach? Read on to find out.
The Build, Operate, Transfer Model
Traditionally, in the past, when companies needed to scale their development resources, they would hire local in-house developers. However, faced with rapidly increasing costs, growing competition and significantly more niche requirements, organisations have been forced to consider alternatives. Some have turned to outsourcing their software development to high quality remote software partners. But other’s, wanting access to a long-term development resource, have chosen to embrace a Build, Operate, Transfer approach.
The ‘Build, Operate, Transfer’ model involves a business (the client) hiring a vendor to finance, build and operate a developer, (often in another country) under the pretence that ownership of that developer will be transferred to the client, once the foundations are built.
Why Use Build, Operate, Transfer?
Enabling businesses to build remote development teams in external locations, the BOT model offers major advantages for companies aiming to create a reliable long-term technical resource. But the benefits don’t stop there. The approach delivers major advantages across multiple dimensions.
Quickly Scalable And Reactive
Faced with critical milestones and significant growth ambitions, high-growth startups and businesses need to be able to expand their technical capabilities rapidly. Hiring in-house rarely aligns well with this need as it’s often difficult and expensive. As such, businesses instead turn to a BOT approach in countries where there is an abundance of high quality talent available at a lower cost.
Improves Talent Retention
Holding onto key technical talent can often be difficult. With such a competitive market, poaching is common, and so companies need to think how they can maximise retention and reduce the risk of losing their best workers. The BOT model does that by its very nature. As the team in question is often built outside of the traditional tech hubs, there are less competitors in the market to steal talent. This makes retaining employees much easier and means teams built through the BOT model often stay together for longer.
Delivers Long Term Gains
As the BOT model creates a long-term development resource, it is, by design, built to offer high quality output for an extended period of time. By offering a stable team of development expertise, companies can ensure they have access to the skills they need, when they need them. With that said, in order for the team to deliver maximum value, there must be a sustained need for development capabilities, if the requirement is only temporary, then it’s not the right option and could be financially questionable.
Taps Into The Vendor’s Experience
Using an experienced vendor to build a remote software development team, the client can tap into their knowledge of the local hiring market and avoid common pitfalls. By tasking them with building the foundations of the team, the vendor uses their resources, contacts and understanding of the local market to optimise every element, minimising costs and maximising the quality of the final team.
The Stages Of BOT
The Build, Operate, Transfer model, as the name suggests, is broken up into 3 distinct stages.
The Build phase is all about identifying the client’s requirements and sourcing the core engineering talent. However, before the team can be built, business goals, requirements and expectations need to be agreed up-front between client and vendor. This will ensure only the right people are sourced for the team, achieving optimal fit in every position.
Once requirements have been agreed, recruitment can begin, with the very best talent sourced from local engineering universities and companies. These team members can then be onboarded by the vendor, using the client’s company processes and integrated into the core of the team.
From here, company culture is developed to align with the client’s values and roles are allocated to take advantage of each individual’s key strengths. Finally with the necessary human resources available, the team can focus on creating a comfortable working environment, providing the tools and equipment necessary to help them achieve maximum productivity.
With the foundations in place, the Operate phase encompasses bringing the team together, and helps to ensure they’re working cohesively and efficiently. It’s at this phase that any blockers to productivity are raised, escalated and resolved. In most cases, the new team members are invited to work with the external team for a few weeks to become familiar and develop working relationships.
From here, the team is carefully monitored and managed by the vendor, allowing for complete transparency on how the group is progressing. Throughout this process, productivity barriers and challenges are highlighted, ensuring communication channels, tools and processes are working optimally.
The vendor’s role in this phase is to ensure all aspects of the new team are working effectively, covering everything from employee satisfaction and motivation, to working time, sick leave and vacations. Ensuring all parties are satisfied with the arrangements is priority 1,2 and 3 when it comes to building a long term development resource.
Once processes, tools and staff have been integrated into a cohesive team, the client will review the operation to evaluate its maturity. In most BOT projects, it takes between 12 and 24 months to get to this stage. If satisfied after review, the client will then hire the group as full-time employees. Assisted by the vendor, this transition process should be smooth and efficient, with paperwork and legal matters closely managed.
In some instances, the client will set up a local subsidiary under the company name to fully integrate the new team into the business. Finally, with everything in place, all foundations solidified and all parties satisfied, the BOT operation will come to a close, with the vendor removed entirely and the client taking over management responsibilities.
Build, Operate, Transfer - The Model Of The Future
Using the BOT approach, companies can build a reliable long term development resource that delivers high quality technical output at a good cost. This is key to overcoming talent shortages and ensuring the right skills are available to pursue rapid growth.
With a vendor focused on building a remote technical team, startups can focus on developing their core business, applying their expertise where it matters most. Using the BOT model, they can take a hands-off approach to technical resource development and this can be a key competency as senior staff aim to grow the business.
As startups increasingly struggle to find the development resources they need, they will turn to alternative options, like the BOT model, that help overcome such challenges. This will ensure development resources do not limit an organisation’s abilities or ambition. While software outsourcing remains a viable option, there’s no doubt the Build, Operate, Transfer model is set to grow into the future.