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As we move into 2025, IT departments face a growing challenge: balancing essential maintenance tasks with the push for innovation, all while managing tighter budgets. The demand for more efficient operations and reduced costs is higher than ever, making it critical for IT leaders to optimize their “Keeping the Lights On” (KTLO) activities. This is where leveraging nearshore talent with a Build-Operate-Transfer (BOT) model comes in—a strategic solution for modernizing KTLO operations without breaking the bank.
The Challenge of KTLO: More Than Just Maintenance
KTLO, or “Keeping the Lights On,” refers to the essential IT activities that ensure core business functions run smoothly. These include system maintenance, monitoring, user support, backup and recovery, bug fixing, security patches, and more. These tasks are crucial for maintaining business stability but often consume a significant portion of the IT budget—typically between 60% and 80%.
When a large chunk of resources is tied up in KTLO, there’s little room for innovation and growth. Companies that don’t modernize their KTLO approach face risks. Risks include overspending compared to their competitors, experiencing resource shortages for new initiatives, and dealing with IT employee dissatisfaction due to the monotony of repetitive tasks.
Key Trends Shaping KTLO Strategy in 2025
To effectively optimize KTLO, it’s essential to understand the industry trends driving the need for modernization:
1. Cost Optimization:
Given economic pressures, IT departments are under scrutiny to do more with less. Cost optimization
strategies, such as outsourcing KTLO functions to nearshore partners and automating repetitive tasks, are essential for maintaining efficiency and competitiveness.
2. Employee Retention
Keeping IT talent engaged is more important than ever. Utilizing a nearshore partner to help KTLO will improve the work environment for U.S. teams by freeing employees from mundane tasks, allowing them to focus on more strategic and fulfilling projects.
3. Foster a Culture of Accountability
As many companies grow through mergers and acquisitions, the burden of merging technical debt can overwhelm your team when they still have the day-to-day tasks of keeping the light on. tilUizing a nearshore partner and building a team to KTLO will allow your internal resources to focus on consolidating that technical debt.
The BOT Model: A Strategic Approach to KTLO Modernization
ITJ’s nearshore Build-Operate-Transfer (BOT) model is a powerful strategy many companies use to modernize “Keeping the lights on.” By leveraging nearshore development talent in Latin America, you can build a team that aligns with key industry trends to enhance efficiency, optimize costs, and ensure business continuity.
This allows your U.S.-based team to do more by freeing up their time to focus on innovation and maintaining a competitive edge.
The time and effort required to onboard a team and the expertise they gain over time make the opportunity to transition that team into your full-time employees very appealing. This is precisely what ITJ’s BOT model offers. Retaining talent and domain knowledge is crucial for cost reduction. Yet it’s not an option when you work with a regular consulting company, where your investment in training
walks out the door after the project is complete.
But how exactly does this work? Let’s review the three stages of the BOT model.
ITJ collaborates closely with your organization in this initial phase to recruit and onboard a dedicated software engineering team in Latin America, sourcing talent to spec and tailored to your project requirements.
When ITJ builds your team, you eliminate multiple costs. The cost of attrition for a software engineer includes direct and indirect expenses such as recruitment, onboarding, and productivity ramp-up. Studies estimate that
the cost of replacing an engineer can range from 50% to 200% of their annual salary, depending on the seniority level. This includes recruitment costs, training, lost productivity, and the time it takes for a new hire to reach total productivity, which can be 6-12 months. The exact cost varies by company and industry but often has significant operational and financial impact.
The Build component of the model—with its emphasis on sourcing to spec—helps ensure precision in talent identification and acquisition, reducing the risk of inaccuracies and ensuring that the correct talent is sourced
the first time.
Once the team is in place, ITJ manages day-to-day operations, including performance evaluations, career development, and alignment with your business objectives.
ITJ sets up essential infrastructure and processes such as:
• Comprehensive employee benefits (Dental, Vision, Healthcare)
• 401(k) retirement plans
• Tuition assistance programs
• Onboarding and integration into your company culture
Although the team remains under ITJ’s management in the Operate phase, they work closely with your organization, becoming an integral part of your business ecosystem.
The cost of losing institutional knowledge due to attrition is significant but difficult to quantify directly. It includes the loss of critical, often undocumented expertise about systems, processes, or projects that only the departing employee possesses. This can lead to delays, increased error rates, and a longer time for new hires to become fully effective. Additionally, institutional knowledge loss can disrupt team dynamics, reduce innovation,
and impact decision-making, ultimately affecting operational efficiency and strategic continuity. These indirect costs can far exceed the direct costs of recruiting and onboarding.
Investing in talent via the Operate component fosters increased employee commitment and a culture of belonging that minimizes attrition. This emphasis on culture is in stark contrast with traditional outsourcing models, which often rely on contract labor to fulfill project requirements.
After a predetermined period, ITJ customers can transition the entity and integrate the team as full-time employees (FTEs). This phase involves
smoothly transitioning staff, knowledge, and systems into your organization–ensuring minimal disruption.
Alternatively, some companies prefer to maintain ITJ as their management partner indefinitely, benefiting from continued operational support.
Benefits of ITJ’s BOT Model for KTLO
The ITJ BOT model offers several advantages that make it a compelling choice for optimizing KTLO:
Cost Efficiency:
Utilizing nearshore talent from Mexico or Latin America can significantly reduce labor costs while maintaining high-quality service.
Focus on
Innovation:
With routine tasks handled by a nearshore team, your in-house developers can focus on strategic initiatives and innovation, driving growth and exploring new opportunities
Scalability:
The BOT model provides the flexibility to scale operations according to your business needs, ensuring efficient and cost-effective management regardless of demand fluctuations.
Conclusion
IT leaders are under pressure to balance operational stability and innovation. One strategic approach to address this challenge is nearshore development talent to reduce costs, optimize “Keeping the Lights On” (KTLO) activities, and free up internal resources for growth and innovation. The BOT model offers operational efficiency, long-term scalability, and the retention of key talent, thus helping businesses remain competitive and manage tighter budgets. Investing in this approach is a forward-thinking strategy that modernizes IT operations without compromising on quality or performance.
Schedule a free consultation with our team and let’s make things happen!
About ITJ
Need a long-term solution for building tech talent capacity in the life sciences industry? ITJ is here to help. We specialize in building and operating teams of highly skilled tech professionals from Latin America who are experts in the life sciences. Our professionals are culturally and time-zone aligned with your organization and ready to tackle your specific needs.
With our Build-Operate-Transfer (BOT) model, we manage the entire process—from building and operating your team and nearshore site to transferring ownership when you are ready. This ensures you receive a dedicated Software Center of Excellence and a custom team prepared to work in just one month. This approach allows you to deliver software products to market faster at significant cost savings while building in-house capacity for the long term.