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Is the Build Operate Transfer (BOT) Model Perfect for Your IT Projects?

With the prevalence of outsourcing in the startup and IT circles, build, operate and transfer is a model that is frequently used in the IT space however it is crucial to understand how to model works in order to know if this model will sit right and work well for your projects so that it can be beneficial and valuable for your organization 

There will be a global shortage of over 545K software developers by 2026.

– ManpowerGroup


With the pandemic, more and more businesses are understanding the prowess of IT and the power of technology. However, there is a constant shortage of experts who can leverage technology for the well-being and better operations of businesses. Hence these days the BOT model or build, operate transfer model is being more and more popular in the IT space. 

The Build-Operate-Transfer (BOT) model is a form of public-private partnership (PPP) where a private entity is responsible for designing, constructing, operating, and maintaining a project for a specific period, after which ownership and control are transferred back to the government or public sector entity. 

This model is typically used in the infrastructure sector and the best example can be tollways. the private entity finances the construction and operation of the project and, in exchange, receives revenues from the project during the concession period. 

The private entity is responsible for the management and operation of the project during the concession period and is also liable for any operational risks. After the concession period, it transfers all the rights and obligations to the public entity while getting a certain percentage of revenue. 

Even though it is generally used for high-scale projects pertaining to infrastructure it is now being popular in IT circles as it is a great way to mitigate financial risk and gain expertise that not all businesses may have. 

So where is the BOT model used in the IT sector?

The BOT model may be used for software development projects, you will outsource your projects to another company that can develop a custom software application for you and then operates and maintains the software for a specified period of time.

 During this time, you, as the client pay the private company a fee for the use of the software. At the end of the concession period, ownership of the software is transferred to you with no additional costs. 

This will be a great model for you if do not have the expertise or resources to develop and operate software applications on your own, as it allows you to leverage the expertise and resources of the software development and IT solutions company. It can also help you to minimize the risk as experts are responsible for the development and maintenance of the application. 

Are there any variations in this model?

Does it model have any variations?

  1. Build-Own-Operate (BOO) The project is owned by a private corporation, which maintains it for a specified period of time before transferring it to the client.
  2. Build, Own, Operate, Transfer (BOOT): A private business finances, constructs, owns, and runs the project until transferring ownership to the client.
  3. BOOM (Build-Own-Operate-Maintain): A private enterprise develops, owns, manages, and manages the project for a certain time before handing over ownership to the client.
  4. A BOMT (Build-Operate-Maintain-Transfer) project is one that is planned, developed, run, and managed by a private enterprise before being handed over to the client 

These are the versions that are now the most widely used, though there may be many more variations of this concept as time goes on.

Why should I employ this model? 

Because the BOT model can be used in various IT projects where a private company can provide expertise and resources that the client does not have, and where the client can benefit from outsourcing the project or service to a third party. Most importantly, this model provides clients with the expertise that they might require for the creation and maintenance of software that will provide them with value. 

The biggest advantage of this model is 

The primary benefit of this strategy is

  1. Cost savings: By outsourcing the project to a vendor with experience in the necessary technology and capabilities, the organization can save on development and operational costs.
  2. Reduced risk: By taking on the risk of developing and managing the project, the vendor frees up the company to concentrate on its primary business.
  3. Knowledge transfer: During the build and operation phases, the organization might pick up knowledge and expertise from the vendor that it can utilize to enhance its internal capabilities.
  4. Flexibility: Depending on its requirements, the business may decide to bring the project back in-house or to a different vendor at the conclusion of the contract.

Potential drawbacks 

  1. Loss of control: During the build and operation phases, the company may experience a loss of control over the project, which may result in issues or disputes with the vendor.
  2. Dependency on the vendor: if the vendor goes out of business or be purchased by another company, it may become challenging for the business to keep supporting and sustaining the project.
  3. Cultural differences: The project may be affected by interpersonal relationships and cultural differences if the supplier is located in a foreign nation or has a cultural difference.

Where can I as a client adopt this model in IT 

Software development: Using the BOT model, you can outsource the development of a new software product or application to a vendor. The vendor would create the software, run it for a set period of time, and then hand over ownership and control to you

Infrastructure management: Using the BOT model, you can outsource the management of your IT infrastructure to a vendor. The vendor would develop and operate the infrastructure, including servers, networks, and storage systems, for a set period of time before returning ownership and control to you.

IT support services: Using the BOT model, you can outsource IT support services such as help desk support and maintenance to a vendor. 

Business process outsourcing: Using the BOT model, you, a business owner can consider outsourcing non-core business operations such as finance and accounting or human resources to a vendor. The vendor would build and operate these processes for a set period of time before handing over ownership and control to you 

With all the advantages and disadvantages The BOT model can be a great model if you are a small business owner and have a big project at hand and need assistance and expertise quickly. However, it is important to note that you might not have the freedom or control over your project when the vendor company has the rights. Hence it is always wise to see your requirement and check the background of the vendor before jumping into contracts so that you know exactly what are your rights and what will you get in the contractual period. 

Assistant can help you achieve just that. We will give you one free consultation so that you can decide what you want. Get assistance with Assystant. 

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