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The Build-Operate-Transfer Model and Minimized Risks

The Build-Operate-Transfer Model and Minimized Risks

The build-operate-transfer, staff augmentation, dedicated team and project-based models, all bring certain benefits to the table, but only one of these software outsourcing strategies stands out when it comes to reduced risks; and that is the build-operate-transfer model, or BOT for short. This solution portrays itself as one of the safest practices available in the outsourcing sphere, and we have set out to demonstrate just how risk-free this model truly is.

But before we dive into the topic, we should first discuss a bit about how the build-operate-transfer model works, and how hiring companies come to realize that this is the best option for their digital journey. Regarding the phases that businesses go through, as a result of the contractual agreement that underpins the BOT model, these stages include various obligations incumbent on the supplier, that arise under the aforementioned contract. Vendors must take care of all aspects that revolve around office spaces, such as searching for, setting up, and maintaining these working areas, along with recruiting the right specialists who will be filling them up.

And that’s just the “build” phase; the actual work on the project that the subsidiary will be dealing with, begins in the second stage, which does not only include the development of products and everything that surrounds it, but also involves training and preparing the team, so that when the client takes over, remote employees will already be aware of the hiring company’s objectives and working styles. This brings us to the third and final phase of BOT, in which vendors transfer all assets and rights to the subsidiary to their clients, when the latter feels like they are ready, or when the contract comes to an end.

Now that you’ve become acquainted with the rules of the Build-Operate-Transfer model, let’s see why it is viewed as one of the safest outsourcing strategies out there. And to start things off, let’s bring attention to the fact that the build-operate-transfer model entails the collaboration with a specialized company, that already has experience in setting up entities from the ground up.

On top of this, given that vendors already know the way of the land, dealing with everything that has to do with the future office areas, and all legal and administrative aspects of the subsidiary, should be an easy task for the contracted party. At the same time, hiring businesses also avoid potential risks that can arise when establishing offices in another country, of which they know little about. However, even if issues do arise, the vendor should be able to handle them effortlessly, having probably already seen similar situations throughout past collaborations.

So we’ve seen how the contracted company’s experience can play an important role in reducing risks, but what about financial dangers? Well, the build-operate-transfer model has got its adherents jumping for joy yet again, as it poses minimal financial risks. In this sense, every cost and payment that the vendor has to make is communicated to the client, who is constantly being kept up to date regarding every expense. This transparency that describes the BOT model, makes it one of the safest solutions, as far as the financial part goes.

But apart from what we have already mentioned, we must highlight that part of why the build-operate-transfer-model is considered a very safe software outsourcing strategy, is because hiring businesses have very little to lose, if things take a turn for the worse. Contracting companies get to “test-drive” the viability of their business in a new market, without having to face serious consequences, if it doesn’t work out. In this sense, companies that choose the BOT model aren’t exposed to the risks of losing important resources, such as office spaces or equipment.  


One might argue that great success only comes when serious risks are taken, but the build-operate-transfer model begs to differ. Contracted companies take responsibility for any difficulties that setting up an offshore office can bring, and also deal with all legal aspects. Furthermore, the vendor’s experience makes the BOT model one of the safest outsourcing models that businesses can turn to, given that these specialized companies have the local knowledge, that contributes to the successful establishment of the future subsidiary. Most importantly, the build-operate-transfer outsourcing model offers contracting parties an advantage that other solutions cannot. And that is the possibility of testing the waters, in a different country, in an attempt to enter new markets, without the risk of losing precious resources.

Build operate transfer IT services with TechTalent

Backed by 350+ IT consultants, over 250 delivered Agile projects, and over 10 years of creating successful project teams for customers in various industries, TechTalent is the go-to company when deciding to resort to the build-operate-transfer model.