Technologies are evolving at a breathtaking pace and the number of businesses that want to adopt those technologies, get digitized, and thrive through modern progress is rising.
The same evolution goes for service delivery as well. Multinational organizations, enterprises, and medium to small companies all want to gain a competitive advantage in the market and turn to software development outsourcing to adopt innovative software and improve efficiency as well as boost revenue.
With the growing demand for services, more diverse and innovative service delivery models appear as well to leverage external expertise effectively. And one of those innovative models with its growing popularity is called build-operate-transfer model in IT.
Check out this extensive engagement models ebook that will help you understand the basics of collaborating with an outsourcing vendor.
In this article, you are going to find out the essentials of BOT in IT outsourcing industry. First of all, we will give the definition of this approach, describe how it works, what are the benefits of BOT, as well as possible challenges you might encounter. Let’s get started so you know more about the build-operate-transfer in IToutsourcing and can make better and well-informed business decisions!
What is a Build-Operate-Transfer (BOT) Model?
Before we dig into all the details, let’s get started with the basic definition so you know clearly what is BOT.
Build-operate-transfer model is one of the business engagement models that imply building R&D centers in an overseas location. Usually, a trusted IT outsourcing provider takes over this process and will create a center that will function in their location.
To be more specific, an IT outsourcing provider who offers a BOT model will be fully responsible for developer recruitment, legal aspects, payroll and accounting, and other operational procedures. It’s also worth noting that the R&D office might eventually transition into the client's premises.
Outsourcing is one of the best and most well-recognized solutions that can help businesses reduce costs and improve their efficiency. Vendors offer quality services through the BOT as well as other engagement models to achieve all this.
In addition, by leveraging the build operate and transfer model in IT, companies can gain a competitive advantage as they can benefit from the market-leading expertise while delivering complex software solutions as well as acquiring exceptional service delivery capabilities.
How Does Build-Operate-Transfer Model in IT Outsourcing Work
Build-operate-transfer in IT industry is a very straightforward model. It consists of three main stages.
1. Build stage
The first phase involves a deep analysis of the client’s tech requirements and business needs. It’s crucial to understand their main vision, the end goal, as well as their company culture. Based on that, the service provider will take care of choosing the location, employing competent specialists, and providing the team with all the necessary hardware and software.
2. Operate stage
This phase is aimed at attaining safe and consistent operations while standardizing all the internal procedures and improving the processes to meet the objectives. The professionalism of a vendor will enable the client company to become more flexible, scalable, and easily adaptable to market changes.
3. Transfer stage
The last phase of engagement implies that the mature and stable operational center will be legally transferred to the client. It can be fully or partially transferred to a client including all the IP, knowledge base, team members, and assets. One of two options will be discussed and agreed upon beforehand. The success of the BOT depends on the success of the overall transition which depends on the proven track record of the service provider.
Key Benefits of Build-Operate-Transfer Model in IT Industry
Let’s take a closer look at the real advantages that BOT in IT industry can bring to businesses all over the world.
1. Reduced costs
First and most significant benefit of the BOT model is its reasonable pricing. The option of creating an R&D office with this model will be suitable for small companies that only want to grow as well as for big enterprises that want to cut down their expenses without losing the service quality. It can help you save up to 60% of expenses as salaries in overseas locations are significantly lower than in the North American market. We recommend you take a look at Eastern European service providers.
2. Minimized risks
Along with significantly reduced costs, the BOT can also minimize the potential project risks related to the services offered. The outsourcing company will take care of all the details as they are aware of the industry and they know all the local conditions of collaboration including the legal side of the process. The vendor will be already prepared to face all the challenges and overcome them without your involvement.
3. Flexibility
The build-operate-transfer model is considered a very flexible one. If a company needs that, the BOT will satisfy this need. Employees hired within the BOT model will be able to work on different tasks and switch between projects. Moreover, the collaboration between your in-house team and BOT team will be more productive and effective as outsourcing professionals are fully integrated into the project and will share the overall company culture.
4. Access to a wide talent pool
Due to a talent shortage of qualified professionals, businesses located in North America or Western Europe have faced a problem of having difficulties hiring in-house employees. The high demand for talent creates a lot of competition between employers of different sizes.
The BOT model will give you unique access to a wide talent pool so you can hire specialists with the required expertise without geographical limits. No matter what you choose — a nearshore or offshore outsourcing partner, you will have higher chances of successful recruitment of experts.
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The build-operate-transfer model gives an opportunity for a client to start a productive collaboration with team members right away. As the company infrastructure is completed and all team members are put to effective work, the client can focus more on scaling up their businesses while the outsourcing partner will take care of and eliminate all the possible bottlenecks. It gives more freedom to a company for business growth and development as well as plenty of room for rapid operational expansion.
6. Fast product release
Team members hired within a BOT model work on a project continuously. They are fully dedicated to the process meaning you can achieve the desired results and release your product on the market faster and more easily. Both parties are interested in a successful collaboration that’s why both of them are putting maximum effort into the quick and quality end result.
Challenges & Solutions When Using Build-Operate-Transfer Model in IT Market
As you can see, the BOT model in IT industry has plenty of advantages. However, there are some potential risks that you might face as well. Let’s take a look and the possible drawbacks:
Offers might be rejected by candidates. If you haven’t played the offshore outsourcing game before, you have to be ready that candidates might potentially reject your job offer. Not all outsourcing providers will promote your company to be more appealing to candidates. In order to avoid that, you have to take care of employer branding as part of your collaboration strategy with offshore specialists.
Challenges with dedication. The BOT team will belong to the offshore outsourcing provider. Therefore, chances are you will face potential challenges with employee dedication. Developers who will work for you can be confused and not fully understand who manages them and to whom to report all their progress. To make everything easy and smooth for you, make sure you take over the management process and your vendor that assists you in setting up the R&D team won’t have access to the development itself.
Lack of operational management expertise. Choose an experienced provider who is knowledgeable in setting up an R&D office. Many IT service providers don’t know all the administrative operations details it implies. Choose a vendor with practical skills that will help you effectively.
Summing Up BOT Model for IT Outsourcing
To sum up everything that we said above, the BOT model IT outsourcing is the outstanding solution for companies who look for affordable ways to expand their teams, improve operational efficiency, and take their businesses to a whole new level.
More and more companies of different sizes opt for this specific model over other engagement models due to the big number of benefits the BOT offers. Despite some minor challenges it’s possible to face during the collaboration, this model is definitely worth considering for your upcoming projects.
Consider Intellectsoft Your Trusted Software Development Partner
If you are looking for a reliable software development partner that can help you in your digitalization journey, consider collaboration with Intellectsoft. It is a trusted offshore IT outsourcing strategies company with more than 14 years of professional experience on the market.
Our team offers a wide range of expert services, starting from software development consulting, to building a custom end product while using the latest technological knowledge and advancements.
Take a closer look at our top client cases to see how effectively we cope with business challenges and what scalable and innovative solutions we offer.
We have extensive expertise to outsource software development services across various industries including construction, healthcare, fintech, hospitality, logistics, and more. Intellectsoft has gathered the most qualified software engineers and other IT professionals to deliver top-notch results and meet all your business needs and requirements.
Feel free to contact our representatives today to get all the information regarding the terms of collaboration, to describe your project, and see the NDA agreement as well as contract samples. We are ready to skyrocket your business and implement our best knowledge and practices to build software that will transform your company.
FAQ
How does the BOT model benefit IT Outsourcing?
In outsourcing, the build-operate-transfer model has a very special place. This particular model has many advantages and that’s why it’s chosen by various companies across industries. The main benefit of this specific model is cost reduction. You will be able to expand your team and receive quality services while paying less. Another pretty important advantage is that this model minimizes all the risks related to the process of building an R&D office so you will always stay on the safe side. In addition, this approach is very flexible and scalable, and you will get access to a wide talent pool to choose from.
Is the Build Operate Transfer model in IT popular?
Yes, BOT is getting more and more popular every day due to the wide range of benefits it might offer to businesses. If you want to know more about this model in Intellectsoft then feel free to get in touch with our team and we will be happy to tell you more about the build-operate-transfer model as well as about other engagement models we use while collaborating with our international clients.
How to know if a BOT is suitable for me?
First of all, in order to evaluate this specific model and understand if it’s suitable for you, you have to clearly define your business needs and goals. It will help you see what purpose you have in the future and after that, you can think of ways that will help you achieve your plan. BOT is not the only existing model so if you are hesitating, contact us and we will give you some basic consulting to enable you to make a well-informed decision that will match your ultimate business development goals.
The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor Customer Service
Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.
Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).
When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!
How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.
Examples of Intellectsoft projects
Property management systems (PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.
Existing Customers First: Building Loyalty with Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.
Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.
More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.
Source: Deloitte
How does technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.
Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."
Leveraging Software to Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.
Upselling via Apps
Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource Management Software
Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.
3. Equip Your Team
Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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