Build-Operate-Transfer Business Model In Setting An Offshore R&D Center

The build-operate-transfer model is the delegation of the task of building an R&D center for a foreign company. This process is completely transferred to a specific IT provider in the country where the center is supposed to be set. After a certain time, the R&D office will go back to the client. In this article, we will talk about the role the build operate transfer model plays in creating a research center.

What Is Build Operate Transfer Model?

The build-operate-transfer model involves the transfer of a set of risks and responsibilities. An IT provider undertakes a set of functions, including both the creation of the object and its operation. This model is quite often used to open its own development center when the customer does not have the time and resources to understand the intricacies of this long and resource-intensive process. Under this model, the company creates a development center, manages it for a pre-agreed period of time, and then transfers it to the customer. The BOT model in softwareincludes three key stages:

• Build stage: at this stage, the IT provider hires employees, looks for premises, and is engaged in the selection of equipment and software.
• Operational stage: this stage includes the management of all work processes from hiring employees to accounting. The provider is committed to checking all operational processes so that the center works at full capacity.
• Transfer stage: At the right time, the provider transfers the ready-made business back to the uploader. All processes are established, employees are involved in the work process, and the client receives a ready-made solution and a plan for managing it.

What Is an Offshore R&D Center?

R&D centers have a significant impact on the labor market in the country where it is created. Providers help IT corporations to open their offices and encourage them to equip a complete infrastructure. Research & Development is a close relationship of marketing and management of developments, innovations, new technologies to increase the competitiveness of an enterprise. First, the company studies the market, its trends and needs, and then, based on the data obtained, carries out strategic management in order to ensure the profitability of the business, increase the attractiveness of the company’s products and services, and develop its manufacturability.

What Is the Role of Bot Business Model in Setting an Offshore R&D Center?

The BOT model is a good alternative to other ways of setting up an offshore development center. A company can implement a new project by sending its employees to research a new location and create a development center from scratch without involving a local supplier. In general, the build-operate-transfer model has several advantages over other tools for setting up a development center at a remote location. At the same time, although this model of collaboration requires ongoing management efforts from the client, it is more risk-tolerant and guarantees a much higher level of security than outsourcing.

Among the advantages of this model:

• Significant reduction in time to deploy and reach the planned capacity
• The initial upfront investment, which is usually required to find personnel, premises, start up infrastructure, and process legal issues, is minimized.
• Financial risks for the customer are minimal: all operations can be closed in a short time, while only actually used resources and the time of hired specialists are paid, there are no additional costs for liquidation.

Conclusion

Delegating the task of R&D center setting does not remove responsibility for the success of the customer’s enterprise, but facilitates his time resources for basic tasks. The BOT model offers a well-established system for delegating the task of creating an R&D center, and the result is a fully functioning research enterprise with an established structure and work processes.