Build Operate Transfer
Offshore Outsourcing Models: Introduction | Outsourcing Road Map | Relationship Management | Staff Augmentation | Project-Based Deployment | Dedicated Offshore Staffing | Build Operate Transfer (BOT) | Managed Subsidiary | Captive Offshore Subsidiary | Joint Venture
BOT is an extension of the Dedicated Offshore Staffing model, whereby it is recognised from day one that the customer's ultimate goal is to have their own subsidiary, possibly including their own separate infrastructure. The establishment of the subsidiary and transitioning of staff is built into the agreement.
Many suppliers will host the subsidiary, providing infrastructure and HR resources on a menu pricing structure, or fixed management fees.
Little cost advantage over dedicated offshore staffing can be recognised until the subsidiary is independently operational. In order to achieve this, equipment will need to be purchased and premises fitted out and a management infrastructure established.
Advantages
- Complete control over resources and management
- IPR management
- Continuity of resources
- Retention of IPR and knowledge
- Cohesive and consistent understanding of products, corporate goals and working practices
- Improved communications by continual reinforcement and experience
- HR costs are inclusive
- Supplied infrastructure
- Cost savings.
Disadvantages
- Those appertaining to Dedi-cated Offshore Staffing
- Legal responsibilities
- Capital investment in establish-ing independent subsidiary.
Criteria For Using BOT
Consider using Build Operate Transfer when:
- There are guaranteed long-term requirements
- Continuity of resources is required
- On-going support and maintenance are required
- It is expedient for the Company to establish a subsidiary.
Points To Consider
- Will your supplier offer preferential terms for temporary re-source assignments to meet peak demand?
- Management costs, rent and infrastructure charges levied by the supplier for hosting the subsidiary
- Attention should be paid to local taxes, rules concerning the transfer of funds and transfer pricing (How the main company pays for the work completed offshore). In general subsidiaries must be operated at a profit.
- Cost of setting up and managing an independent subsidiary.
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