Many companies developing their software solutions or hiring external parties for the job make the common mistake in underestimating the importance of research and development (R&D) preceding the very production process. In some cases, the research phase lasts throughout the project’s lifecycle and supplements the development workflow. A good business idea is essential, but without proper research, you cannot be sure your software would hit the target you’re aiming at. Despite the relevance of the detailed product specifications and development team expertise, it would never result in more than your best. Setting aside the technological background and team competence, R&D is the crucial prerequisite of creating a truly unique and unprecedented product. If you do not care much about uniqueness, think in terms of long-term financial gain that can be brought by increased product durability and no user risk.
Major factors predefining the success of every software product are the level of innovativeness, quality, and technology. Of course, these factors must be observed in compliance with the timeline, allocated budget, and available skills capacities. Your product must pursue future needs and market tendencies; it has to be adaptable and directed at your target audience. The idea underlying your product must be perceptible visually through user-oriented design solutions and intuitively through the message communicated to your market niche, the niche of tomorrow. This is where R&D comes in handy. When research serves as a basis for the upcoming product development or refinement, it ensures the effective strategic planning and influence critical in product decisions undertaken along the way.
Specific characteristics differentiate R&D from software development (SD). They would help you better understand the true value and certain peculiarities that come along with research-driven development. They are the following:
- While R&D selects product technology through a row of experiments with ideas and their technological implementation, SD works with specific prescribed features for a given product.
- R&D endeavors to find a new remedy from the existing social problem and its outcome can hardly be predicted. SD deals with a specific customer’s problem, and the result must necessarily bring an effective working solution.
- The most distinct and tangible difference is the end result: RD brings research results and SD brings a working product.
- R&D is valid for all-sized companies, bearing different meaning for different companies depending on their attributes, such as the size and customer base. SD works with a specific company’s size and proceeds from its current needs and requirements.
- R&D can hardly be put in a box as the research phase might take years. SD is always limited in time, with fixed deadlines to be met for each project’s milestone.
The examples of R&D include such still developing areas as self-driven vehicles, augmented reality, and virtual reality. However, do not get into thinking that R&D can be applied to space research and AI-driven applications only. Many established consumer brands spend lots of money on their existing product improvements, such as Volkswagen, Samsung, Microsoft, and many more.
SD products are more tangible, presented by numerous web applications for various fields, such as pharmacies, sports, and the automobile business.
Like any other fields of activity, research and development has its strengths and weaknesses. Not every company needs it; not every service provider company can adequately do it. However, let’s not jump to conclusions and review its “black and white” features.
Potential risks and disadvantages of R&D
- Putting aside the high costs involved in the implementation of long-term R&D, the unpredictable outcomes, although taken as a given, might cause significant financial losses, with especially critical damages to the young, small companies.
- Today, time is a luxury and not every company is ready to wait for years for a possibly successful product. When taken in duet, time and a probability of failure represent a doubtful venture not everyone should even try.
- If the result turns to be a success, there is a high risk of its copying by other companies. Like keeping a pig in a pock, the great challenge of keeping the corporate secret at least for a while might be overwhelming for many small companies, or their employees. Sometimes, big companies go so far as to “swallow” smaller companies to acquire rights for their product or technology and protect themselves from possible trademark infringement claims.
- Inability to control the constantly changing market conditions raises the question of product relevance and its effectiveness in the new market conditions. Moreover, if competitors outstrip you even for a little bit and come up with a similar product first, the time and funds would be wasted for nothing.
The benefits of using research and development services would partially repeat the overall approach description but with a focus on the related perspectives. However, please note the listed pros are valid provided for the successful development outcome.
- For someone, the product uniqueness might seem like merely a target for public appraisal of company’s individualistic development approach. On the second thought, it opens broad financial perspectives build upon the patent obtainment. In practice, it may turn into a separate business line: the simplest option is to sell the patent once it gets enough publicity to ensure the profitable price; the most gainful way is in licensing user rights for your product; the most difficult way would be to market and promote your product yourself (no external fees included, but your revenues would be considerably cut by the legal expenses, start-up, and accounting costs).
- The higher competitive edge triggered by the innovativeness of produced solutions ensures the company’s longevity in the tough market conditions. Innovativeness often serves as a foundation for trend-setting capacities of a company, enabling it to control a user’s response to some extent.
- A product’s increased durability minimizes collateral waste throughout its lifecycle and supports a steady long-term level of income.
- The ongoing research for the live product optimizes the efforts made for its refinement in a cost-effective and time-saving manner. The available up-to-date research data ensures only needed changes.
- Brand awareness and improved company’s reputation are the welcomed side effects accompanying the introduction of the new product to the market. By carefully leveraging the marketing tools, the companies can fix the solid position within its field and drive the additional profit.
Putting all pros and cons on the scales, we understand there are no simple yes and no answers. The decision to get involved with R&D or follow a more trodden path is always conditional. If you’re able to bear the risks of significant financial losses and ready to engage yourself with time-consuming patent obtainment, if your idea is so great and unparalleled you’re practically sure of its paramount importance, then yes, give it a try.
If you’re limited either in time or finance and if your idea is doubtful with no space for practical refinement, then think twice and then think twice again.
When the risks are clear, another fundamental question for consideration: What services exactly do research and development companies provide? What expertise underlies them?
Services to expect from R&D
Although the general insight on R&D services might be confusing in terms of their cohesion, modern research and development companies usually split up different research-related services due to several reasons:
- The whole package would be an extremely pricey investment, involving all kinds of staff. By separating the services, the company makes them more affordable and less resource-intensive.
- Not every customer necessarily needs everything the company has to offer. The required services hinge on the product peculiarities, its target audience, the scale of operations, and many more variables.
- The field of application varies for every product, and since big research and development companies tend to have dedicated employees for every field, there is a sense in serving each niche individually.
Grouping the services per their field of application, we can highlight the following research areas:
- Audio and media solutions
- Adaptive systems
- Smart sensing electronic tools
- Communication solutions
- Positioning and networking
- Supply chain solutions
- Aerospace research
- Biomedical solutions, biotechnology, and other life sciences
- Industrial solutions
- Environmental solutions
- Software solutions
- Chemicals and materials research
These are the brightest examples of R&D application domains, but in fact, this approach can be implemented to any other developing or developed field.
The nature of services depends on the availability of certain professionals taking into account the market demand for every kind of services. However, we can highlight the most common-spread offers:
- Marketing and loyalty management services cover market research operations and user acquisition campaigns, including but not limited to initiation of loyalty programs, user engagement, business intelligence, marketing campaigns, and social mining.
- Data operations address existing data issues using of master data management, b2b networking solutions, and customized data protection techniques.
- Information and communication technologies operate within fields of information security and data protection, IT risks, and general data regulations.
- Computer-aided design (CAD) exploits computer systems in streamlining the product and process design creation and optimization.
- Ergonomic design employs the theory of human needs to design software and tools improving users’ well-being, experience, and performance.
- Modeling establishes the conceptual representations advancing design, product analysis, and forecasts accuracy as to the probable products and processes responses.
- Simulation services test the product or process durability for refinement and calibration purposes.
R&D services are practically countless: product/system/industrial/packaging design, basic scientific research, social sciences research, and automotive/electronics developments. Today, nanotechnology and biotechnology top the list of the most promising fields for research and development companies.
Deliberating on the subject of R&D services, we cannot skip the question of the services providers’ professional competence. Who are these super-skilled professionals able to uprise all industries with their deep knowledge and predicting talents?
Every company would probably have its own answer. However, in a perfect world, R&D companies bank on employees with extensive postsecondary education. Most of the staff have bachelor’s or graduate level degrees at a minimum. A bachelor’s degree is satisfactory for the majority of research development, apart from life sciences, but a master’s degree is also a standard case. A PhD is usually required for occupying the senior roles within research teams. Some fields, though, like basic research, might demand a PhD degree even for junior workers.
The necessary condition for professional advancement within employees’ field of knowledge is the constant training and skills upgrade. While other industries can bear with the solid immutable professional level, research is the area where you either develop or fade. It can be a formal training period or on-the-job training; you can attend specialized conferences, seminars, courses, or field societies.
Technician staff might be employed without a bachelor’s degree, but they will start working under the supervision of a scientist or senior technician. Further on, they can grow into working with less supervision or pursue additional academic education.
The most experienced and educated employees eventually get promoted to the managerial or senior researcher positions. The technician layer can develop into working in another more complicated, creative field of development.
While you might still think of the benefits and risks of applying R&D for your business, other companies actively embrace these services and even spend billions on them. Below are some amazing numerical insights from 2018 based on statista:
- Amazon – $22.6 billion
- Alphabet – $16.2 billion
- Volkswagen – $15.8 billion
- Samsung – $15.3 billion
- Intel Co. – $13.1 billion
- Microsoft – $12.3 billion
- Apple – $11.6 billion
- Roche – $10.8 billion
- Johnson & Johnson – $10.6 billion
- Merck – $10.2 billion
- Toyota – $10 billion
- Ford – $8 billion
- Facebook – $7.8 billion
- Pfizer – $7.7 billion
- General Motors – $7.3 billion
- Honda – $7.1 billion
The listed companies alone have brought $186.4 billion to the R&D industry. You can still have your doubts, but it seems like the big world has already decided on the yes or no question.