A Build-Operate Transfer can help develop a new capability, operating unit, or delivery centre and prepare it for long-term ownership. But the effectiveness of the BOT operation does not depend solely on the quality of the operation itself and how it is managed. The ending of the encounter also must be carefully planned out. The build-operate-transfer model is a good one to use because you can specify your exit strategy early and avoid some disruption and confusion.
The importance of Exit Planning in a BOT Arrangement
The steps are usually three in a BOT model: constructing the operation, running the operation for a definite period, and transitioning the operation to the client. Transfer is a seemingly simple last step, but can be a mixture of technology, people, processes, contracts, knowledge and governance.
Addressing these areas only closer to the transfer date can lead to operational gaps and/or unforeseen expenses for businesses. Early exit planning sets measurable milestones and timelines to help problems be solved before there is a change of ownership.
Identify early on the key areas to be defined.
1. Transfer Scope and Ownership
Specificity should be used in setting out what will be transferred and when. This may include:
- Technology platforms and infrastructure
- Business processes & documentation
- The intangible assets that constitute intellectual property are necessary to the company’s operations.
- Based on vendor and third-party contracts.
- Data and reporting systems.
If ownership is clearly stated, then there is no dispute when the transfer day arrives.
2. Knowledge and People Transfer
Often employees are a critical part of a successful build-operate-transfer model transition. An early decision should be made by the businesses as to which staff members will be transferred to the client’s organization, retained by the service provider or transferred to another arrangement agreed upon.
The programme of knowledge transfer can be structured to include process documentation, role-based training, operational manuals and shadowing sessions. This will help to maintain institutional knowledge post-transition.
3. Performance and Exit Metrics
The build-operate-transfer model should have objective criteria for deciding if the operation is ready for transfer. These can range from aspects of service quality and productivity to compliance and financial performance, technology stability, and customer satisfaction.
These metrics offer a quantifiable measure of readiness rather than a subjective one.
4. Technology/Data Readiness
The issues surrounding technology ownership and access rights need to be reviewed well in advance of the handover. System administration and licensing, cyber security, data migration, backup and technical support responsibilities should be defined for the business.
The security of data is another issue of great concern when there is a transfer of systems or information from one organization to another.
5. Transition Timeline
A good exit plan should also have a transition plan. This can identify:
- Readiness assessments
- Documentation completion
- Knowledge-transfer activities
- System handover, access handover
- Employee transition
- Final operational validation
- Post-transfer support
The eventual transition will be more predictable if these milestones are embedded in the original BOT.
Readiness for the Transition Support Process
It isn’t always the case that when someone is transferred, their support ends as well. A limited stabilization period may be defined during which the original operator will offer technical aid, troubleshooting or further training for the business.
This can be useful, giving that new operation a way to cope with the problems of the early stages without dependency building.
Exit Planning is an element of the initial strategy
The process of planning for exit should start at the design stage of the build-operate-transfer model, not at the date of the transfer. Ownership rules, measurable performance requirements, people-transition plans, technology requirements, and timelines can enhance transition readiness.
If the business is taking the build operate transfer approach, closing the business should be part of the operating plan and that can help create clarity for both parties. A clear transition plan additionally contributes to business continuity and can allow the organization to assume full control, with growing self-assurance.
FAQs
Q: What is exit planning in a Build-Operate-Transfer model?
Exit planning defines how people, processes, technology, data, contracts and ownership will transfer to the client.
Q: Why is early exit planning important in a BOT arrangement?
Early planning reduces operational gaps, ownership disputes, unexpected costs and business disruption during transfer.
Q: What technology issues should a BOT exit plan address?
It should define system access, licences, cybersecurity, data migration, backups, administration and technical support.
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