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Shift the risk of outsourcing: Build-Operate-Transform-Transfer (BOTT)

Scale with the BOTT business model

As a risk-shifting alternative to traditional outsourcing, many multinational organizations are adopting the Build-Operate-Transform-Transfer (BOTT) model. Neither in-house nor conventionally outsourced, BOTT preserves control by enlisting a partner to stand up, stabilize, transform, and eventually transition new service centers back to the organization.

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How the BOTT business model preserves control & extends transformative digital capabilities

The world of service delivery is constantly evolving. For multinational organizations, navigating through disruptive market forces and rapidly shifting needs of the enterprise can mean exploring innovative service delivery models that balance the development of in-house capabilities and leveraging of external expertise.

Transformation can be a struggle for many businesses, but by integrating enterprise and provider resources and extending digital capabilities across the organization, a BOTT strategy can help companies launch and sustain truly transformational change.

Traditional outsourcing is a well-recognized driver in reducing costs and increasing service levels while enabling a business to focus on its core functions. Building in-house provides the opportunity to retain control and develop service capabilities internally.

Within a BOTT business model, a company can enlist the help of a partner to stand up, stabilize, transform by bringing a range of disruptive technologies and process changes to bear across the enterprise and eventually transition back the delivery center with transformation capabilities. A well-structured BOTT model utilizes the Center Office model to effectively deliver and transform services. A Center Office is an integrated approach to operations, strategy, talent, and customer experience can help enterprises make targeted investments that can ultimately free them of decades of technical debt and treat transformation not as a sporadic, one-off event but as an ongoing capacity for organizational change.

Read our WSJ CIO Journal article to learn how a BOTT can help companies launch and sustain transformational change.

Why consider a BOTT?

Your organization has decided to move forward with a new or enhanced service delivery model. You have concerns over having the wherewithal to stand up a captive center on your own, but you still want to retain more control than a complete outsourcing solution. Or you want to enhance existing offshore operations, but you do not have the capacity. Additionally, you want to operationalize transformative process and technology solutions that would allow your enterprise to unlock new levers of efficiency, but you do not have the internal bandwidth.

BOTT differs from outsourcing with continuous improvement metrics in that the providers’ capacity to change is geared more toward strategic positioning of the organization than merely cost reduction. It relies on consultative as well as operational expertise across people, process, technology, and industry domains.

The option to transfer these capabilities if and when the enterprise is ready to assume them is always on the table.

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How does a BOTT work?

Phase 1: Build

This phase is kicked off with an in-depth analysis of the enterprise’s specific requirements, performing due diligence to understand the client’s vision, sourcing goals, technical requirements, and company culture. The service provider will design the operating model, laying out a service catalog, developing a governance structure, and determining the center’s technology and workplace needs.

Leveraging a wealth of local knowledge, the provider will transform the design blueprint into an operational facility and secure the talent in the agreed-upon location; the client will typically choose a location where they have an existing presence but can assess new locations for strategic purposes.

Phase 2: Operate

The goal of this phase is to achieve a steady state of operations, standardizing operating procedures and continuously improving and reengineering processes to meet service-level agreements and realize transformation objectives.

Leveraging years of transformation experience in workforce strategy, technology and transformational leadership development, a service provider can accelerate the attainment of modernized capabilities and help enable a more scalable, flexible, and digital enterprise with the ability to react nimbly in response to business and market changes.

Building a foundation for agility and transformation will enable continuous improvement; promote a tech-savvy workforce; and provide a more autonomous, augmented, and insights-driven experience.

Phase 3: Transform

Once the transformation objectives have been established, it is time to realize the transformative vision of the organization. Utilizing a center-office model concept, the delivery partner brings a range of disruptive technologies to bear across the enterprise, steering the organization’s transformational engine and delivering business process transformation, analytics, continual improvement, and other cross-functional capabilities as a service.

This phase opens the door to better understanding and leveraging of technology to enhance both in-person and digital experiences, while instilling governance principles and change mechanisms to ingrain digital transformation mindset in company’s DNA.

Phase 4: Transfer

At this point in the engagement, the fully operational and stabilized center is ready to be legally transferred. Whether the center will be transferred back to the client’s organization in its entirety (including 100% of the operation, IP, employees, knowledge base, and assets) or in part will have been ideally determined earlier by the service provider and client.

The client will assume all responsibilities in conjunction with the complete exit of the service provider. Determining the full scope of the transfer may present a challenge, and steps should be taken early in the BOTT process to streamline the effort and avoid decision bottlenecks. The success of the BOTT model is largely determined by the success of the transition; ensuring the service provider has a proven track record will be critical.

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Elements of BOTT Success

To realize transformative visions, a BOTT strategy should contain the following elements:

  • Design for the right scope of work, keeping in mind core versus noncore capabilities along with considerations like location and security.
  • Leadership to sponsor potentially painful change, promote an inclusive culture, and provide governance and oversight.
  • Ongoing change management and employee engagement to monitor progress, motivate teams, and communicate change.
  • A dedicated team to sustain and manage transformation once the transfer to the enterprise is complete.
  • A diverse set of delivery models, including agile development, to proactively address business needs.
  • Functional, local, and industry expertise to deliver efficient processes and business insights across the enterprise.

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Why now?

The client perspective

Looking beyond outsourcing but needing the flexibility to grow at a higher velocity than what’s organically possible, clients are increasingly turning to BOTT business models today. The BOTT approach can compress time to maturity, and therefore time to value, while still reducing dependence on third parties..

Companies that may not have both the capabilities to stand up and transform a delivery center and the capacity to prioritize over competing programs can leverage the BOTT business model. The ability to respond promptly to market demands or contractions is advantageous in today’s environment. The BOTT model enables flexibility to quickly scale up or down or even more easily pivot toward other priority initiatives.

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The vendor perspective

One of the crucial requirements for a BOTT is finding the right service delivery partner, and until recently, service providers often shied away from the model. In the early and mid-2000s, majority of them were in the beginning stages of achieving the brand and scale that they enjoy today. Unless for strategic purposes, entering a new industry, or gaining functional capabilities in an attractive space, providers have been selective in entering BOTT relationships.

However, service providers today have seen revenue growth cannibalized by recent innovations around robotics, automation, and cognitive technology. To help offset a decline in top-line revenue, today’s service providers have been increasingly willing to explore a hybrid model that clients view as more strategic and oriented towards technological agility.

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Transformation can be a struggle for many businesses, but by integrating enterprise and provider resources and extending digital capabilities across the organization, a BOTT strategy can help companies launch and sustain truly transformational change.

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Want to learn more about BOTT, what makes it successful, and how to begin your BOTT journey? Download our full perspective and contact one of us below.

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