Advantages and Disadvantages of Lab Development: A Complete Guide Including Differences from Contract Development

Lab development can solve the IT talent shortage that hinders DX initiatives. Here, we cover its pros and cons and how it differs from contract development, so you can succeed with it. Use this as a reference before outsourcing.

Even when a company wants to hire IT talent to expand, a talent shortage can keep plans from proceeding as expected. Japan's IT talent shortage has become severe, driving up labor costs amid fierce competition, and many companies struggle to hire. "Lab development" is one way to solve this, and we explain it in detail below.

What is lab development?

Lab development means building an external engineering team with the skills you need. It is a type of offshore development (outsourcing to an overseas company), with resources secured for the whole contract period, during which spec or priority changes can be accommodated. This suits companies that want an agile approach, e.g. projects without strictly fixed specs.

Advantages

Lab development offers the following advantages.

You can secure resources during the contract period

With lab development, you can secure engineering resources with the skills you need for the whole contract period. Since these resources are dedicated exclusively to your company, you can place orders continuously, without forming a new project team or sharing information for each project. The team can move as nimbly as your own in-house engineers.

No need to request quotes for spec changes or fixes

Within the contract period, lab development handles spec changes and feature additions flexibly, with no need to request a quote each time, making spec changes smooth and suiting agile development well.

Labor costs can be reduced

Lab development is a type of offshore development, and Vietnam has become popular for it recently. The Vietnamese government focuses on developing IT talent, and since people learn programming from a young age, many engineers are ready to contribute immediately.
Vietnamese IT talent is excellent yet costs about half as much as in Japan, another appeal of lab development.

In-house know-how can be accumulated

Since lab development builds an engineering team outside your company, you can still accumulate your own know-how, as the partner becomes familiar with your rules, boosting development speed and quality over time.

High-confidentiality projects can be outsourced

Lab development lets you secure an independent development environment, which is why it is also called an "ODC (Offshore Development Center)", letting you confidently outsource highly confidential projects.

Disadvantages

Lab development also has the following disadvantages.

Orders are required during the contract period

Lab development secures resources for the contract period. Note that you must pay the outsourcing fee even without work, so to avoid waste, place orders continuously throughout the period.

Team building is required

With lab development, you need to teach the external team your rules and know-how, and team building is necessary for smooth communication. Teams generally engage fully from around the third month onward, so a period of team building is required.

Development may not proceed as planned

Lab development is harder to manage than in-house development. With an overseas partner, differences in language, culture, and customs may keep development from proceeding as planned. Choosing your partner carefully solves this, but choosing on cost alone tends to fail.

Difference between lab development and contract development

Lab development and contract development are easily confused but completely different. Choose "lab development" if you want to shape the system content along the way, or "contract development" if you want to complete the system exactly as planned.

Points for successful lab development

Now that you understand the characteristics of lab development, let's go over the points for making it a success.

Determine whether lab development is right for you

Determine whether lab development suits your company. "Contract development" suits completing the system exactly as planned; "lab development" suits revising content along the way. Since you must pay fees throughout the period, consider whether you can order continuously.

Check the development company's skills

The success rate of lab development depends on the company you choose, so check its track record and skills. Extensive experience serving Japanese companies means less management burden and smoother development.

Manage thoroughly during the contract period

To get the most out of lab development, manage it thoroughly: communicate proactively on progress, specs, and deliverable reviews. An ordering plan is also indispensable, and this improves cost-effectiveness.

For lab development services, choose "Miichisoft"

If you are interested in lab development services, please feel free to consult "Miichisoft". Here, we introduce Miichisoft's features.

Providing high-quality services

Miichisoft is an offshore development company founded by a graduate of Hanoi University of Science and Technology. It obtained ISO9001 and ISO27001 certifications in December 2020 (12/2020),
and in July 2021 received the Sao Khue Award as a company driving Vietnam's offshore development market. It handles large-scale and cutting-edge development flexibly.

Extensive track record with Japanese projects

Miichisoft has staff who lived in Japan long-term with system development management experience. Since project managers speak Japanese, communication and cultural barriers rarely arise. Our Japanese project track record includes the following.

Reduced development costs

Vietnam has excellent, low-cost engineers. Even for equivalent skills, labor costs run about half those in Japan, meeting demand for high-quality development while keeping costs down.

Summary

Lab development lets you build an engineering team outside your company. Understanding the differences between lab and contract development also makes it possible to hire excellent engineers at low cost.

If you are interested, please use "Miichisoft"'s lab development service. Among Vietnam's offshore powerhouses, Miichisoft received the Sao Khue Award as a contributor to offshore development, and with an extensive lab development track record for Japanese companies, you can outsource with confidence. If IT hiring is a struggle, please consult "Miichisoft".

For details, please click here