BOT model: How to outsource IT projects and insource at the same time

BOT is a good way to combine the benefits of outsourcing and insourcing. This is how the special operator model works.

Don't let your projects fail!

Digitization is advancing at a rapid pace. And at the same time, there is a growing shortage of IT specialists. Companies are therefore hiring freelancers, agencies and other external service providers to implement urgently needed IT projects.

Great concepts are developed and implemented with great zeal and ample budgets - but in the end, disillusionment often sets in. For example, …

• because the result cannot be supported and further developed internally by the company.

• because operation via further outsourcing would cost too much.

• because the whole project exceeds the budget.

The project fails, the concept and the development were for the garbage can. Do you know this situation? One way to avoid such a flop is the BOT model.

Definition: What dies BOT mean?

BOT is an acronym. The three-letter abbreviation stands for "Build-Operate-Transfer".

The BOT model is known as a operator model and is used, among other things, for public infrastructure projects. In PPP ("Public Private Partnership"), a public client ("Public") awards a contract to a company ("Private") and thus enters into a partnership ("Partnership"). For example, for the construction of a bridge or a hospital.

Similar operator models exist in the private sector. In IT projects, for example, companies use "Build-Operate-Transfer" as a form of outsourcing to have digital solutions developed. In this case, an external contractor implements software ("Build"), oversees its operation ("Operate") for a certain period, and then hands everything over to the client ("Transfer").

How do BOT projects work?

There are usually four phases:

Phase 1: "Plan"

The client develops a concept and discusses it with the contractor - for example, an agency. Within this framework, project plans with fixed milestones or agile milestones are decided, among other things.

Phase 2: "Build

The service provider implements the project as discussed. During this process, the service provider is in constant contact with the client. In the meantime, the client gradually builds up its own internal capacities for the subsequent phases.

Phase 3: "Operate

The digital product - for example, a new intranet - is ready and is hosted, tested and operated by the service provider. The client's experts familiarize themselves with the relevant technologies so that they can manage the intranet themselves in the future.

Phase 4: "Transfer

The service provider gradually hands over operation and further development to the client.

What are the advantages of "Build-Operate-Transfer"?

Looking through the lens of the client, the BOT model yields the following benefits for the company:

• It does not have to develop the required product itself. Instead, it buys in expertise, manpower and external technologies through outsourcing.
• The result is achieved more quickly. Because the external supporters are specialists in their field and do not start from scratch.
• It does not fall into a "black hole" at the end of the project. Instead, the external partner takes the company by the hand until it can develop the software independently.
• It can build up its own capacities with the required expertise. The internal resources do not have to start from one day to the next, but are hired successively.
• There is no forced dependency on the service provider. However, it is possible to ask for support when needed.

What are the downsides of the BOT model?

For the client, a "Build-Operate-Transfer" approach means that he…

• does not develop the product itself. What is an advantage can also be a disadvantage - because the deep insight into the technical implementation is missing.
• must initially reckon with higher expenses, since an external service provider usually costs more than permanent employees.
• has to recruit, train, educate and pay its own specialists. This results in high internal costs.
• cannot recruit the required specialists in the time needed for the transfer. This delays the transfer, resulting in a longer dependency on the external partner.
• has increased expenses in management and quality control when choosing the wrong implementation partner. This often happens with nearshore and offshoring service providers.

Management: What must be considered?

A BOT project is not a classic project. Therefore, there are a few things you should consider and think about in advance to ensure that your four phases run smoothly and successfully.

Project planning

As the client, plan the product that is to be created as well as possible. Define important features and record your product vision. However, don't get bogged down in details.

Flexibility

Always remain open to new ideas. Nowadays, software is usually developed in an agile way. This means that you go through many small iterations where you can make adjustments. For example, because requirements change or because you have to react spontaneously to new market conditions.

Team size

Start the project small and lean. Because you know: Many cooks spoil the broth! When the concept is ready and development begins, you should gradually add more experts and stakeholders.

Prototyping

Use common software or open source for the MVP or prototype. It's best to use low-code tools to get there quickly and cost-effectively.

Connectivity

Coordinate closely with IT. The product and its software base must fit into your company's IT infrastructure and system landscape. For example, a new online store has to be compatible with the PIM or ERP in use.

IT security

Bring all systems in use up to the current state of the art and secure them as well as possible. Outdated or poorly configured systems, for example, can become a gateway for hackers.

 Documentation

No software project should be created without sufficient documentation. If this is missing, the transfer phase becomes unnecessarily difficult.

Testing

Always think about the users. Test the product or the MVP as early as possible on the target group. Repeat these tests constantly to gain important insights for adjustments.

Transition

In the "Operate" phase, the development team must operate the software. Until then, you as the client need sufficient internal and technical resources.

Debriefing

At the end of the BOT project, a debriefing is useful. At this meeting, any remaining ambiguities are cleared up, among other things. And the client and contractor exchange information about what went well and what went badly. In this way, both parties can learn something from the cooperation and become better as a result.

Support needed?

Are you looking for an external partner with whom you can digitize your processes? Would you like to implement fast, lean software projects according to the BOT model? Then contact us! The CITRO team will be happy to assist you in accelerating your digital transformation.