Navigating the World of Outsourcing: The Debate Around BPO vs DDT

Selecting and establishing the right outsourced team might seem like an insurmountable task, particularly if time is a constraint. According to the UK IT Sourcing study, 57% of organizations cite cost and talent reduction as their main reason for outsourcing. A trusted nearshore consulting partner will tell you that there exists a number of approaches to outsourcing your projects or particular tasks related to your business operations, and each approach offers its own benefits. More so, each of the outsourcing models can be suited to different business cases. In this context, Build Operate Transfer and Dedicated Development Team are often compared as the two most popular modes of cooperation between the business and the outsourced team. But does it really all come down to just comparing BPO vs DDT? To put it simply, you have to select a model that best suits your business case. A reliable consulting partner will always point you in the direction of an outsourcing approach that best suits your business, your project, and your strategic goals. In today’s article, we are going to take a closer look at the debate BPO vs DDT and see which model might be a better choice for you.Build Operate Transfer and Dedicated Development TeamBusiness Process Outsourcing or BPO refers to the practice of contracting specific business processes or functions to a third-party service provider. In BPO, companies delegate non-core or secondary processes to external organizations that specialize in those areas. BPO services can include various business functions across different industries, such as customer support, technical support, human resources, finance and accounting, data entry, procurement, IT services, and more. The objective of BPO is to improve operational efficiency, reduce costs, and allow companies to focus on their core competencies.There are two main types of BPO:Back-Office Outsourcing: This involves outsourcing internal business processes that are not customer-facing. Examples include finance and accounting tasks (such as payroll processing, bookkeeping, and accounts payable/receivable), data entry, data management, supply chain management, and other administrative functions.Front-Office Outsourcing: Outsourcing customer-facing processes and services. Examples include customer support (via phone, email, or live chat), technical support, telemarketing, sales and marketing support, and help desk services.You need to remember that BPO involves considerations such as data security, quality control, effective communication, and managing relationships with the service provider. Overall, BPO enables businesses to leverage external resources and expertise to streamline operations and drive business growth.BBO vs DDT: what is the other option?DDT or Dedicated Development Team is a model of outsourcing software development in which a company hires a dedicated team of developers from the remote talent pool to work exclusively on its projects. In the DDT model, the dedicated team operates as an extension of the client’s in-house team. They follow the client’s processes, methodologies, and project management practices, integrating closely with the client’s existing development efforts. The client has full control and direct communication with the team, allowing for greater flexibility and collaboration.Key characteristics of the Dedicated Development Team model include:Dedicated resources: The team members are exclusively allocated to the client’s projects, providing a higher level of focus and commitment.Integration with the client’s team: The dedicated team becomes an integral part of the client’s development efforts, working closely with the client’s in-house team.Scalability and flexibility: The dedicated team can be scaled up or down based on the project’s needs.Skill alignment: The client has control over the selection and recruitment process, ensuring that the team members possess the necessary skills and expertise for the project.The Dedicated Development Team model is suitable for long-term projects or ongoing development needs where the client requires a dedicated, extended development arm. However, it’s important to note that the success of the DDT model relies on effective project management, clear communication channels, and establishing a strong working relationship between the client and the dedicated team.Should you Choose Build Operate Transfer vs DDT?Undoubtedly, the BPO model stands out as a secure and convenient collaboration approach. Remember, in the discussion of Build Operate Transfer vs DDT, the choice is always on the model that best suits your particular business case. It is not about which model is better in general, it is about which model is better for you. Let us get on with the benefits of BPO:Establishment of remote subsidiaries: Through the BOT model, businesses can establish secure and fully controlled remote subsidiaries. This ensures the security and reliability of your intellectual property and critical data, while granting you complete ownership of the offshore development center (ODC) once it is established.Reduced risk: The BOT model is a highly managed approach, resulting in lower risk compared to other models. The initial risk is shared until the entire project is operational and handed over to the client. Additionally, the presence of software centers in different countries reduces risks associated with legal, economic, labor, and law and order situations.Cost efficiency: The BOT model is known for its productivity and affordability. In certain cases, it can result in cost savings of up to 60% compared to major countries in Western Europe and North America.Elimination of logistics and sourcing concerns: In the BOT model, the client is relieved of the responsibilities related to sourcing and logistics. These processes are managed by the service providers, including tasks related to logistics, real estate, and human resources.Access to diverse technologies and tech talent: The BOT model grants businesses access to large pools of tech talent skilled in modern technologies. This enables bridging the gap in required skills and technologies by adopting this model.Faster development and scalability: Owning a remote software development center allows for accelerated development speed. Additionally, the team can be scaled up or down quickly and reliably to meet the project’s needs.Final Thoughts on BPO vs DDT: Which Approach is the Best Choice?The choice on BPO vs DDT always depends on the specific needs and circumstances of the business. Both models have their own advantages and considerations. The BOT model is often preferred when businesses want to establish a remote subsidiary quickly, with reduced risk and cost-efficiency. The BOT model is particularly suitable for businesses that prioritize ownership of their offshore development center (ODC) and want to benefit from cost savings and risk mitigation.On the other hand, a Dedicated Development Team (DDT) model is preferred when businesses require a dedicated, long-term team that integrates closely with their in-house operations. DDT offers more control and flexibility, as the team works exclusively on the client’s projects, aligns with their processes and methodologies, and enables seamless collaboration. This model is ideal for businesses that prioritize focus, specialized skills, and close communication with the team.To determine the best choice, you should consider factors such as your project requirements, budget constraints, desired level of control, the need for specialized skills, and the importance of long-term collaboration. It’s crucial to assess these factors and align them with the benefits and considerations of each model to make an informed decision.