An evolving international marketplace has instigated UK companies to consider setting up business operations overseas as a sustainable resolution to their corporate ambitions. Advantages such as cost reduction, risk minimisation and resource adjustments make offshoring an alluring opportunity that many businesses are already utilising. The benefits of offshoring operations have already been established, however, the key is how to transition certain primary functions overseas effortlessly.
Before getting on the plane to begin establishing your operations abroad, first consider the type of offshoring relationship you would like to have with your vendor. The following is a list of traditional offshoring options:
• Build-Operate-Transfer (BOT) – Eventual Offshore Development Centre (ODC) ownership
• Tactical Outsourcing – Project based
• Offshore Development Centres – Dedicated team of resources
• Do-It-Yourself ODC – Establish company-owned development centre
This article focuses on the Build-Operate-Transfer model and how it can seamlessly integrate your domestic operations with the ones you plan to establish overseas whilst eliminating some of the associated risk and cost. Utilising a BOT method will also assist in executing the correct market entry strategy and business entity formation.
In a BOT model, offshore suppliers can deliver the local and traditional information required to establish a secondary proprietorship on behalf of the clients business. A BOT partnership permits the client business to focus on their essential capabilities, while the offshore partner provides all of the operational planning and infrastructure required to establish the offshore development centre (ODC).
At the conclusion of a designated time period, or as specified parameters are realised, ownership and operation of the ODC is reassigned to the company. Once this handover occurs, the company is able to incorporate the processes into its own methods, and appreciate the advantages of a skilled, qualified team, ready to proceed.
Businesses that choose to implement the BOT approach can expect the following benefits:
• Initial cost reduction – as the offshore partner covers most of the start-up expenses
• Initial risk aversion – as the offshore partner covers the majority of start-up risk
• Uppermost control on quality outputs – the client determines the parameters for success
• Effective ability for knowledge transfer and capturing IP for future use
• Process expertise and rapid scaling of operations
A BOT model capitalises on the expertise of the partner company. Their integral knowledge of domestic FDI regulations, corporate and local laws, and tax and regulatory compliance places them in an ideal situation to assist in offshoring.
If you would like to know more or discuss further about offshoring and the BOT model for your business, please call us on +44 845 838 2672 or email on email@example.com.