5 Minutes read Outsourcing

Software Delivery model based on Build Operate Transfer plan

How do you go-to-market quickly with the right offering when all you have is a project plan? How do you scale up an existing team that is focused on specific core functions for your organization? How do you hire and develop a dedicated team with new skill-sets that will enable you to achieve your business goals? At the same time, how do you retain control over the new team and their deliverables?

These somewhat searing questions impact organizations that are looking to undergo an operational or digital transformation — quickly and at a designated budget. When faced with this situation, it is a good idea, for a company to look into hiring a remote team that can drive it closer towards its business objectives, faster!

As described in the picture below, there are multiple delivery models for software development that would match your expectations.

However, if you consider to switch to a long term offshore software development service center, we recommend to invest in a B.O.T plan.

Let’s start from the beginning, the global IT services outsourcing market was valued at $405 billion in 2017. Further, Beroe Inc., a procurement intelligence firm, forecasts the IT outsourcing market to grow at a CAGR of 6 percent to $531 billion between 2022. Additionally, according to Gartner, organizations that fail to combine offshoring and outsourcing could risk a delayed response to the changing market demand and end up incurring a high opportunity cost in domestic markets as a result. An offshore remote team can deliver high quality deliverables and at reasonable cost to company, quickly. But, hiring and managing such a team can be a challenge as well, when you’re sitting in an office, miles apart, trying to focus on your core business functions. Again, one size doesn’t fit all. The needs of an organization are determined by its objectives, product or service portfolio, culture, digital maturity, and other differentiating factors. And, aligning goals, values and culture to recruit the offshore team can be both a time-consuming and a legally complicated exercise.

You want to outsource offshore but at the same time secure your team asset and know-how for your future success.

That’s where Ekino Vietnam comes in! We offer the ‘Build Operate Transfer’ Model to our clients to address their business needs. A B.O.T contract is one where a client organization hires a service provider organization to set-up, run (the operations for the duration of the contract) and transfer the operations to the client organization. The B.O.T organization sets-up a turn-key business for its client organization, which is involved in the operations of the business and takes full control from the service provider when the business is ready and working.

When does B.O.T make sense?

Many businesses have not fully explored the possibilities offshoring and outsourcing can offer. The reasons are twofold: one, organizations tend to believe that traditional manual-intensive technical or support work is outsourced to offshore countries where technical talent is cheaper than domestic markets. Although, this may have been true, outsourcing service providers today are claiming a much higher role in the value chain by providing innovative, strategic and revenue generating solutions to their clients. And two, Organizations believed that their contract options are limited to a staff augmentation or dedicated team model. While these arrangements are a great fit for many businesses, some may find them difficult to adopt due to corporate regulations related to intellectual property, and data protection, as well as expectations for quality of deliverables, on-time delivery, employee retention and accountability. These expectations can only be met with increased control and governance over the operations of the outsourced entity.

For large-scale and long-term projects, where stakes are high, companies prefer a more hands-on engagement model to the traditional staff augmentation or dedicated team model. A Build Operate Transfer Model allows the client organization to establish their own business in the local market, a more involved cooperation with the B.O.T service provider and managing resources first hand.

How does B.O.T work?

BUILD: The client organization defines its Business needs, objectives, goals, KPIs, expectations in terms of team size, skill sets required, etc. clearly with the outsourcing service provider. Once the requirements are gathered and understood, the B.O.T Company will set-up a dedicated office space under a new legal entity, start the hiring process, secure the equipment, technologies, other key infrastructural aspects needed to execute the project within a designated budget. Recruitment can be complicated and the right outsourcing partner can make a world of difference. In order to put together the right team with the desired skill-sets, Ekino Vietnam shortlists the candidates, who are then vetted by the clients. The clients can also choose to be fully involved in the hiring process. The offshore team, though brilliant, is hired basis the culture of the client organization to ensure cohesion with the existing onshore team. Ekino Vietnam builds 20 to 120 member teams for its clients with complete transparency on the cost.

OPERATE: This phase is extremely critical to accomplish project goals and meet deadlines without deviating from the budget. The right outsourcing partner will manage all the administration and operations with due diligence. Ekino Vietnam manages all the day-to-day project-related operations in alignment with the project needs and the client expectations. The client is kept updated on the status of the project and the progress made, through regular meetings. On account of rapid technological advancements coupled with the unique logistical challenges (time zones and geographical distance), it becomes essential that the offshore and onshore project leads maintain daily, weekly, monthly and quarterly communication. Again, the standard operating procedures shared by the client during the ‘Build’ phase are integrated into the fabric of the new entity. This ensures that the customer’s culture, process and brand remain entrenched in the subsidiary as well. It is important to realize that a world-class team is an asset, but they have to be invested in the company for the long-term. Otherwise, it wastes knowledge, time and training effort. Ekino Vietnam understands that employee retention is key to completing the project in budget.

TRANSFER: After the term of the project, the client can choose to get full-legal control of the offshore subsidiary. At this point, Ekino Vietnam will transfer 100% of the operation, intellectual property, data, assets, and the team along with local business license to the client.

Software delivery model based on build operate transfer plan

What are the benefits of B.O.T?

Employee Productivity & Job Satisfaction: Hiring within a foreign subsidiary means that the team will not be working on any other projects but will be fully committed to that of the new entity. This allows the employees to be more productive and they don’t get stretched too thin which further contributes towards job satisfaction.

Development of Internal Capabilities:

B.O.T model is an excellent way for organizations to build their internal capabilities while creating and securing value and achieving their goals.

Market Entry Strategy:

Organizations that would like to enter foreign markets equipped with new skills or more valuable service offering can benefit greatly through this model.

Go-to Market Speed:

In the technological rat race, the fast and first movers enjoy considerable advantage. And, that’s precisely what the B.O.T model enables.

Focus on Strategic Activities:

The client organization can focus on strategic growth or core functions rather than administrative intricacies of operating a foreign subsidiary. A good outsourcing partner makes the new entity integration with the original business extremely smooth and easy.

No Cultural and Legal hassles:

B.O.T also ensures faster grasp over the local cultural aspects as well as legalities which tend to delay the new entity set-up process, if dealt with first-hand by the client. But, in-depth know-how by the outsourcing partner makes the execution that much simpler and hassle-free.

Cost Reduction:

One of the top most reasons an offshore and outsource center has become so popular is on account of the reduced rents, salaries, administrative charges, and other costs associated with setting up and operating a foreign subsidiary.

Hopefully, this article has helped you to understand the advantages of doing Software Development Outsourcing with a B.O.T plan.