Build-operate-transfer: outsource now, own the team later

Key takeaways

The build-operate-transfer (BOT) model lets a provider build and run an offshore team for you, then transfer it into your own entity after an agreed period, often two to three years. It combines the low start-up risk of outsourcing with later ownership. It suits businesses sure they will need a large, long-term team.

• Build: the provider recruits and sets up the team.
• Operate: the provider runs it, typically for 2 to 3 years.
• Transfer: staff and assets move to your own entity for an agreed fee.
• Suits long-term teams large enough to justify ownership.

What is build-operate-transfer?

Build-operate-transfer is an outsourcing model in three phases. The provider builds the team, recruiting staff and setting up premises; operates it under a service agreement; then transfers the team, and sometimes the premises and equipment, to the client's own entity. The terms of the transfer are agreed at the start.

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How is BOT priced?

During the build and operate phases, you pay a service rate similar to managed outsourcing, sometimes with a set-up fee. At transfer, you pay an agreed transfer fee for the team, processes and any assets, and take on the local employment and running costs. Get the transfer fee formula in writing before starting.

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When does BOT make sense?

When you are confident you will need a sizeable offshore team for many years, want to own it eventually, and do not want the risk of setting up alone. It suits businesses planning an offshore capability centre but lacking local knowledge today.

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When is plain outsourcing better?

When the team is small, the need may change, or you have no wish to run an overseas entity. For most SMEs, ongoing managed outsourcing gives the cost benefit without the future responsibility for local employment, premises and compliance.

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What should the BOT contract cover?

Agree these points at the start, not at transfer.

• Minimum team size and period before transfer.
• The transfer fee formula and what it includes.
• How staff consent and local employment transfer work.
• Ownership of processes, documentation and IP throughout.
• What happens if you decide not to transfer.

• BPO contract terms to check before signing

What are the risks?

Key staff may not want to move to your entity, local employment law may add costs at transfer, and you take on management that the provider used to carry. Plan the transfer with a local manager in place, and keep documentation current throughout the operate phase.

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How long does each BOT phase take?

Timings vary with team size and skills, but a typical pattern is a build phase of a few months to recruit and set up, an operate phase of about two to three years while the team matures, and a transfer phase of a few months to move employment, assets and processes. Agree milestones for each phase in the contract.

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What does this look like in practice?

A pattern we see with growing UK technology businesses: they start with a managed team to test the offshore model and only discuss transfer once the team is stable and large. Many find continued managed outsourcing suits them better than owning an entity.

• See client work
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BOT checklist

Answer these before choosing BOT.

• How large will the team be in three years?
• Do you want to run an overseas entity?
• Is the transfer fee formula agreed in writing?
• Who will manage the team after transfer?
• What happens if you do not transfer?

Next step

Tell us your team plans. We will compare build-operate-transfer with ongoing managed outsourcing in a 30-minute call.