Which offshore models should you use?
Many companies in today’s dynamic world decide to transfer their parts of the business abroad. It all depends on the choice of model to become successful. Hence, as a start it is crucial to mention all the possible and most popular offshoring models, being: joint venture, fee-for-service, captive operations, and build-operate-transfer variant. Every manager or board needs to take the list of variables to pick one of them. It can be based on the budget, law of the country, its dynamics, customs, or tempo of development. It also can refer to talent acquisition, know-how safety, data security, or set-up time. Since we are an IT company from Poland, we would like to take a closer look at the latter from the above-mentioned models – BOT 2.0. If you want to know more read this article.
Traditional BOT model in a nutshell
With the still ongoing pandemic and many of us working remotely, you as an IT expert may find yourself in a situation of tough choices on the horizon. Why? The pace of changes could put pressure on building an offshore team or even a department overnight. We can list two main scenarios when outsourcing (as a part of offshoring) can be beneficial for product IT companies. The first thing is solving short-term tasks without the need for permanent cooperation. In a wider perspective that’s simply not enough. You may need to find experts who share your visions, have a similar approach, and even mindset. That’s a case where a build-operate-transfer model is a preferable option. Firstly, let’s take a look at a traditional version of this model.
B-O-T (build-operate-transfer) refers to the operational model and the stages of the process in one phrase. It describes cooperation between two business partners (we focus on the IT sector) where one of them is a service provider and another is the client who wants to create an offshore team/department with the provider’s help. The contractor builds, sets up, and operates particular service delivery operations needed by the client. The team is also taken from the provider, meaning that experts and specialists are foreigners and strangers to your company. Anyway, after all the required stages are done, the prepared team is fully operational and you can easily include it in your structure. To conclude, such a model has its obvious benefits but is based on the rule: share the risk and reduce the costs.
Probable pitfalls of traditional B-O-T model
The biggest threat of such a solution is the risk of losing confidential information, intellectual property, know-how, or fragile data. Since IT service companies are the potential competitors to product companies it is sometimes unavoidable. Unfortunately, there’s no guarantee that the development team (from the service provider) will not steal or use any of your valuable information about the products you offer. Another situation would occur if you could personally choose the team members for your R&D team. Is it possible? Welcome to B-O-T 2.0!
Meet BOT 2.0! discovery of the decade
The BOT model carries a risk of low flexibility and a high level of control after the transfer stage is done. It appears to be the most challenging part for many IT companies so some of them, especially product-based, need to have this control from the very beginning and to skip the transfer stage.
Once we showed you the traditional model of offshoring actions, now it’s time for its successor: BOT 2.0. No matter if you heard about it before or you just hear such a thing for the first time – let’s have a look at it in detail.
What you can observe in this table shows how beneficial it could be for product IT companies to choose the BOT 2.0 model. Let’s sum up how the traditional BOT works and where the difference is.
The “build” part requires creating an R&D team and office offshore. Everything is run by a local service provider who hires the team for the client and searches for the best office space available. At this point, you, as a client, keep control over all operations and are obliged to pay the monthly bills.
As it comes to the “operate” part it suggests that operational management is needed. It can cover HR, accounting, payrolls, or bookings. Thankfully it’s your contractor’s job. You can stay focused on developing your products and running your business as before. You may also be supported legally and get financial consultations to be safe and secure with all the processes.
Last, but not least, the “transfer” stage happens exactly at the time when the client decides to take the operational management into his hands. Here is where the magic happens. Why? There’s no transfer after all. Since the client is the owner of the project from the very beginning. The intellectual property is safe and your product’s specifications are not commonly known for anyone from the outside of the company. What’s more, in the BOT 2.0 model the termination process is not charged and doesn’t require any other fees.
Body leasing with Neontri – local specialists provider
Body leasing has become one of the solutions that play a vital role in changing many sectors of businesses such as mobile banking, eCommerce, or the big data area. Planning any offshoring action wouldn’t be possible without solid outsourcing IT provider, which could help with such a process. We, as a company, are aware that one of its biggest advantages is the short time needed to find appropriate candidates for the projects or positions. Another viable aspect is the specialization of the hired people or whole teams. The technological race is on and many companies use outsourcing services to catch up with the tempo of innovations. The question arises: How to do it well?
The answer is NOS – Neontri Outsourcing Services, which specializes in body leasing recruitment and IT teams outsourcing. From the beginning, NOS has focused on promoting its business model of cooperation with large and prestigious clients from the financial sector that implements their own IT solutions. Our company now employs 100’s of IT professionals (Project Managers, Analysts, Designers, Architects, Developers, Testers, and others) who implement IT projects under the guidance of clients and on-premises. If you want to learn more, check how we managed to fill the IT positions in 3 working days.
BOT 2.0 – be open for transitions
Our main conclusion is that the two BOT models vary a lot after all. Firstly, in BOT 2.0 you are the main and only owner of the project from day 1. It refers to inherent equipment, tools, software, team, and products. Summing it up, the client’s provider “builds” an offshore office and helps him run it from scratch. It also means that the service company doesn’t have any permission to access your personal and fragile data about the products.
Another viable aspect is that in a traditional model the contractor sets up the project under his label and brand, which can be confusing when it comes to the recruitment process. the possibility to offer you services based on à la carte services. That refers to the option of ordering the services according to what your offshore office needs.
At the very end of the list of differences in the termination stage. Whether you would have to pay some final fees with the traditional BOT model, it works completely opposite in the other. Termination in the BOT 2.0 model is free which gives you freedom with deciding when to stop.
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