The Pros And Cons Of A Build, Operate, Transfer Model

Full-service business process outsourcing companies or BPOs offer a variety of solutions to their partners. A build, operate, transfer model, or BOT is one of those services that help foreign companies establish satellite offices. While this service sounds like a dream for all businesses, it’s essential to fully understand its pros and cons of it in order to make the right decision.

What Is The BOT Service?

Simply put, the build, operate, transfer model is an easy way to get a company up and running in another country, for foreign investors. The service provider will have an easier time setting the business up, which means it can quickly be started, then transferred to your company’s name.

The first step involves starting all the paperwork and creating a project charter with all the rules and regulations. This is also where an initial payment is made, and the office is sourced. Following this is the building step, the core team is recruited, training is started, and a system of governance is put in place. The third step is the operation phase, and this is where all the rough edges are smoothed out, meaning all the necessary training is finished, operations are made stable, and a transfer plan is put in place. Lastly, the transfer phase is where the corporation will be registered under your name with all staff and assets transferred over to you.

Pros Of The BOT Outsourcing Model

The most significant advantage of the BOT model is the ability to skip the initial hurdles involved with starting a business in another country. All of the problems with paperwork and legal challenges will be taken on by the service provider. You won’t have to worry about endless trips to other offices to sort out problems.

In line with skipping early growing pains, the BOT business model allows you to save valuable time, something not often thought about when expanding your business. You won’t have to do any recruiting, any interviewing, or any of the initial training. The infrastructure won’t be a problem as this is handled by the chosen service provider. While all this is going on, you could be doing any number of things to grow your business in other aspects, effectively doubling the growth speed of your company.

Many businesses have satellite offices in order to help reduce overhead costs of non-core positions, for example, an entire customer service department can be hired at a fraction of the price overseas when compared to what it would cost to do it onshore. Of course, all services offered under a full-service BPO are cost-effective, it all depends on what you want to do.

The last argument for the BOT service is that your new company will be started in good hands. All companies offering this model are experts in their industries, meaning you can expect high-level hands to be onboard the creation of your new corporation. Some BPOs even have a history of setting up high-level businesses for numerous big companies all over the world. Feel free to inquire about past partners when meeting with your chosen BPO.

Cons Of The BOT Outsourcing Model

One of the biggest hurdles with the BOT service comes after the transfer. Those with no prior experience working in the country of the BOT model may have difficulties getting accustomed to the new culture of their staff. This is easily remedied as many BPOs have consulting or training offered for this very issue. In some cases, culture training is part of the BOT model.

Retention and recruitment of staff after the transfer may be an issue. In some rare cases, after the transfer, the company needs to scale down. The loss of staff will make things difficult, especially if the role is specialized. In addition, too many shifts in processes after the transfer may not resonate well with the current staff, resulting in attrition. To avoid these situations, it is often a good idea to explain what type of culture you want the company to have so the BPO setting up your business can implement it from the beginning.

Finding an affordable BPO partner may be a challenge with there being so many options available. One common problem you may run into is the high cost of the BOT solution when compared to something like a remote staffing solution where you don’t have to worry about the administrative side of things. In this case, why would anyone opt for their own company when having a BPO manage the admin side of things costs less?

The Wrap Up

Overall it’s up to you and your company’s specific needs to decide if the BOT model is the best choice. With other offerings at BPOs that are all cost-effective you should have a discovery meeting with several BPOs to determine what is best option is for your specific company. Whether it’s establishing your own corporation overseas with a BOT, to simple seat leasing, orthe more common place remote staffing, choose based on your wants and needs.

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