Build Operate Transfer – The Key to Strategic Business Scaling

The Build Operate Transfer (BOT) model is an effective strategy for companies looking to scale their business, develop new capabilities, and stay competitive without the heavy lifting of starting from scratch. 

New beginnings are inherently exciting. Venturing into something unknown, thinking about the prospect of what it can become. However, when starting a new business chapter, that excitement is often accompanied by increased stress levels. 

Whether you’re expanding the existing pack of products or services, extending operations to a different domain, or entering a new market, there is a lot of work involved. You need to pour both human and financial resources into it, not to mention the potential risks involved. 

Fortunately, there is a business tactic that alleviates much of the hassle in the above scenarios, and it is called the Build Operate Transfer model. As we can confirm from experience, this type of outsourcing model is an elegant method that helps companies scale, develop new capabilities, and stay competitive, all the while saving on costs and resources.

The magic wand of business strategies and the secret behind many a success story, the Build Operate Transfer model has a history in the infrastructure sector and was typically employed in public-private partnerships. Today, it has been widely embraced by the tech industry as an elegant approach for private companies to establish an office in a new location or build an offshore software development team.

Many companies use the BOT model as an alternative to expanding their in-house teams or outsourcing the work to external developers. The idea is to find a local service provider, a partner company with the right expertise, who will be in charge of building and operating the team and, when the time comes – transfer it back to the client company.

As the name suggests, the BOT model comprises three phases.

From scaling up teams to tapping into new talent pools, the model lends itself well to various private companies, and especially large and established corporations that perhaps lack the specific expertise to utilize the power of technology to their advantage.

One of the primary reasons why companies go with BOT projects is the undeniable efficiency that comes with their plug-and-play nature. This, coupled with a significantly reduced upfront investment, is in itself a substantial benefit. 

Any owner of a private entity will know how the initial setup of a company can be costly. There’s the infrastructure, hiring a skilled team, acquiring all the necessary tools and equipment, and a number of “misc” expenses. With the Build-Operate-Transfer model, the service provider assumes responsibility for acquiring all of these or already has much of what is needed at their disposal. This presents an immense savings opportunity for the client company, not only in terms of money but also time. 

Probably the most significant asset a business can gain access to via the BOT model is human resources. Hiring and training a team alone takes up a great deal of time and a hefty budget. Partnering up with an experienced business with an established company culture, the client company gets a skilled team with processes already in place, which makes for a highly efficient business kickoff.

Starting a new venture is never completely risk-free; however, outsourcing operations through the BOT model can help businesses significantly reduce the common risks connected with establishing and running a successful company.

The partner company is typically an expert in their field. They have the experience and the know-how that in itself decreases the risk of problems in the operation. Responsible for all operational activities, they are in a position to quickly and effectively address any challenges before they can cause significant damage. 

And even in a less desirable situation where not everything goes according to plan, neither party bears the full burden of potential financial losses associated with the business. In that regard, the BOT model is considered a substantially safer outsourcing strategy than other options. 

Access to specialized expertise and technologies is crucial for organizations in today’s highly competitive and rapidly evolving market. Sometimes, a company wants to expand its offering, start a new project, or introduce a new product but lacks the internal capabilities and resources to do so.  

The Build-Operate-Transfer model is a great opportunity to complement one company’s strengths with those of another. Rather than going through a lengthy hiring process or upskilling an existing team, companies can tap into specific skillsets of existing teams. Specialized expertise providers bring a wealth of knowledge and experience to the table. What’s more, they can offer a fresh perspective and insights that can be instrumental in driving business growth and success. 

When the time comes for the transfer of ownership, the outsourcing company may partly or fully integrate the new team into its workforce or simply part ways, depending on the contractual agreement. 

Whichever the case may be, combining teams creates the perfect surroundings for knowledge sharing and knowledge transfer. Working alongside knowledgeable and experienced experts enhances the skills of the client company’s teams, which is a benefit that extends far after the concession period expires.

If the Covid-19 pandemic taught us anything, it is the importance of the ability to adapt to changing business needs. Private entities looking for efficient market entry and strategic growth can benefit greatly from the flexibility and scalability inherent in the BOT model.

This not only speeds up the path to revenue but also gives the client company the opportunity to “test the waters” of a new market before committing to long-term investments. 

Utilizing local expertise also contributes to operational flexibility – the partner company comes with a deep understanding of the target market, its nuances, and consumer behaviors. That way, a business can more easily tailor their strategies to local preferences. 

Finally, the model also provides a simple approach to scaling. Companies can expand or contract operations without incurring all the upfront costs usually connected with establishing and maintaining a local presence. And the transfer phase offers additional flexibility – it can be accelerated or prolonged, once again in alignment with the business needs. 

The BOT model is, by definition, employed for a limited time duration. However, the effects of building such a partnership contribute to long-term sustainability and business growth. 

A sustainable business can withstand challenges and continue to function effectively in the long term. With the hassle of company establishment removed and the risks inherent in running operations reduced, the client company maintains stability. It has more space to focus on its core competencies, innovation, strategic initiatives, and long-term growth. 

Further, the knowledge and skills acquired during the Operate phase don’t go away when the partnership ends. They remain a constant asset in the client company’s toolbox, making it well-equipped to manage the same type of operations on its own.

Overall, the BOT model offers a structured approach to tech outsourcing, providing private entities with a clear path for building, operating, and ultimately transferring ownership of the new company to the client. It brings significant benefits for corporations seeking to enter a new market or upgrade their product offering, including cost savings, lower risks, access to specialized skills, better scalability and flexibility, and a sustainable perspective. 

As the tech industry continues to evolve and expand, the BOT model is likely to remain a valuable tool for companies looking to innovate and grow.