Build-Operate-Transfer (BOT) Model in Software Development Outsourcing

By Ha Bui   |   August 27, 2019

As business grows, they are expanding the need to grow their product and invest in technology. Other operational priorities simultaneously placed pressure on the supply of money. As a consequence, the Build – Operate – Transfer (BOT) model has become popular as a methodology for project financing.

The model works like this: a business entity (the Client) hires another company (the Partner) to finance, build and operate a facility or business operation, often in a new territory or country, stipulating that the facility’s operation will be transferred to the Client if they wish.

What is the Build – Operate – Transfer (BOT) model in IT industry?

  • Build

This stage involves establishing an operating unit that includes everything from choosing buildings, installing infrastructures such as the Internet and IT systems, employing staff and setting up the administrative and legal framework.

  • Operate

This stage manages the offshore project that involves program management, growth, maintenance, upgrades and product support.

  • Transfer

Project ownership is transmitted to the Client in this stage. This involves the client’s fresh offshore subsidiary, transfer assets and handover operations. But the transfer only happens once the client is fully prepared to manage the project or the agreement expires.

BOT model Project transfer

How does Fram^ work with BOT model?

  • Build a development team of experts you need (BOT team)

Once engaged, Fram^ works with the Client to set the expectations, goals and the planned trajectory of the project. Then, we set up a workplace, recruit and establish your BOT team. With our understanding in the business, we ensure a team of top IT talents in Vietnam.

  • Operate in full responsibility and transparency

Dedicated team members are recruited and trained to the required standards. We also handle the legal formalities  and oversee the operation of the project.

The responsibility for each component of the business will be dictated by the contract in place between both parties. This creates a transparent process which follows the Client’s vision for the project. Accounting, HR, and compliance, plus, product support, maintenance and upgrades, all fall under our duties.

  • Transfer the team to you when you wish

When everything is in place, typically after 18 – 24 months, the whole project will be transferred into your hands, including all of the assets, staff and intellectual property, the business in its entirety. This can be at a predetermined time or when specific metrics have been hit by the company or its software.

However, the Build-Operate-Transfer relationship does not have to end here. The Client can retain their IT outsourcing companies on a consultancy or operational basis for the long-term.

long term relationship with bot model

What are the advantages of the BOT model outsourcing?

Companies offering the IT services on BOT model like Fram^ have access to high quality talents in Vietnam and multiple worldwide places. Fram^ can build an operation of IT facilities from the ground up in one of several worldwide places, enabling the customer to make the TOP benefits: 

  • Reduced risks and cost savings

As previously stated, having a local partner manage the IT operations reduces the chance of failing in a new market. And, of course, it lowers your initial recruitment and office setup costs. 

Furthermore, a BOT outsourcing project typically saves as much as 60% of the normal cost compared to when a Client builds, operates and manages the team itself. You can have a good team of exact skills you need at a local price.

  • Get all the best of a team: customized, flexible and mature

By its very design, this is a scalable model for launching a product or entering a marketplace. The transparency of the process and close working relationship with their BOT team means that the Client retains control in reality.

The reduced risk from shared responsibility and robust QA protocol mean that the project can be scaled up or down according to the Client’s requirements. An experienced tech partner will be highly competent recruiters and can put management teams in place to make the project self-sustaining, with thorough onboarding and knowledge sharing systems in place.

  • Better cultural alignment and local knowledge

The BOT model allows you to start cultivating your business culture from the beginning. This involves hiring the right people, communicating directly on a daily basis. It’s also easier to “transplant” your company’s best practices to your new international location.

In all areas involving your business’s international expansion, local expertise is essential. Culture, laws, language, and the methods in which government institutions and companies function differ considerably from country to country, particularly in less developed countries.

In this regard, enlisting the help of a knowledgeable local IT partner is an effective method to expand to a new country. Before you take on the duty of your foreign IT operations on your own, you’ll have the opportunity to progressively gather all of the knowledge you’ll need in a controlled and almost risk-free way.

About Fram^

Fram^ is a leading software development company that helps many businesses build up their BOT team in Vietnam. We handle everything to build you a BOT team smoothly, and then expand quickly and easily. If you wish, we’ll transfer the BOT team to you when you’re prepared.

With each step of the transition, we will help you from locating the office room to obtaining utilities or finding extra vendors when required. Best of all, as they were from the first day, the development team you’ve come to understand and count on is with you.

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Whether you have any questions or want to explore how we can help you, connect with us now or drop us a visit and enjoy a cup of Vietnamese espresso.

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