Virtual Captive model (also known as hybrid or synthetic captive) implies a captive software development center which is established and run by Intellias according to the operational agreement with the customer. We provide not only dedicated resources, facilities, infrastructure and assets, but also related activities like recruitment, training, management of facilities etc.
Intellias is responsible for almost all day-to-day operations while customer has full control over processes, technology, hiring and training by having complete visibility of the outsourced process. Important decisions are made jointly under agreed-upon governance structure.
Client plays crucial role in integrating virtual captive's team into their organizational culture. This is usually done through regular visits, reviews, appraisals, training on values, co-branded office facilities, rotation of onsite assignments etc. In its turn on the operational level Intellias makes necessary process customizations, continuously improves processes and aligns objectives in accordance with client's corporate strategy/vision.
Virtual Captive: Optimal Control vs. Risk Balance
Virtual Captive vs. Dedicated Development Center
Dedicated Development Center and Virtual Captive models are similar in many respects. In both cases customers get dedicated resource base working exclusively on their projects.
But as a hybrid model, virtual captive has several differentiating benefits, namely:
- Full transparency of cost components (staff salaries in particular)
- Higher control over the team (including hiring and training)
- Provision of additional services by the vendor
- Greater integration of the team into customer's organization
- Blending the benefits of both pure captive and third-party outsourcing
Virtual Captive vs. Build-Operate-Transfer (BOT)
The main difference between virtual captive and BOT is absence of transfer phase after the specified period of time. Virtual captive is rather a long-term Build-and-Operate process.
There is no need for the customer to establish a legal entity and bank accounts in the foreign country. Virtual captive also allows to avoid effort-consuming transfer price negotiations that have place in BOT model. The client does not own the center but enjoys benefits of both traditional models and has high control over the operations.
Business Case for Virtual Captive
Virtual captive seems to be the best fit when neither pure captive nor third-party outsourcing can fully satisfy your specific requirements. It is typically a model of choice for:
- Businesses that want to minimize risks of hiring and managing dedicated resources at the nearshore location as well as avoid significant infrastructure and operational costs that may outweigh expected benefits.
- Companies that want to have extended workbench for fulfilling peaks and valleys of the retained core processes in addition to servicing non-core ones.
- Businesses willing to have more control over human resources management of their teams at remote locations and willing to have more transparent overview of the processes.
- Companies that are looking to establish nearshore operations with at least 5 full-time employees.