IT companies set up research and development (R&D) labs to stimulate innovation, development of new products and technology, and to improve the existing solutions. Today the labs are starting to play a key role in strategic business development. Let’s take a look at the nuances and prospects of this format.
From internal asset to benefiting everybody
As dedicated units in a company structure, R&D labs have long existed for solving unconventional tasks although they have not been so widely common.
A group of people, usually tech specialists, dedicate their time to solving specific long-haul tasks. It used to be a purely internal effort: if they come up with something, great; if they don’t, the world will not end, and solutions can wait. In the past, units were usually headed by enthusiasts whose departure from the company could result in the unit being wound down.
These days, competition through the development of digital solutions is growing extremely fast. Intensively unlocking the potential of IT for businesses, including through the capabilities of an R&D lab format, is coming to the fore.
The goals of R&D are to create new competitive products, shorten market release times and subsequently boost the business along with its effectiveness and innovative components.
Scope of interests
Thanks to overall trends, today R&D formats focus mainly on artificial intelligence and machine learning, developing analytical algorithms and models, and creating various smart systems.
Cybersecurity is another important area that requires researching and developing cyberattack protection methods.
Big Data is playing a noticeable role in digitalization, and the R&D vector contributes to creating tools for effective processing and analysis of massive data sets.
The Internet of Things (IoT) and cloud technologies are critical for connecting and managing devices over the Internet while enhancing cloud solutions to enable flexible and scalable use of IT resources.
As modern IT products and solutions increasingly emerge from the convergence of multiple technologies and approaches, utilizing an R&D lab as a cross-functional development format becomes a logical and well-justified approach.
Structure and resources
An R&D lab typically comprises several departments. At its core is the research department, which conducts fundamental and applied research to drive technological breakthroughs. Complementing this is the development department, tasked with transforming research findings into new products.
The testing department ensures the quality and reliability of the developed solutions, while intellectual property specialists focus on safeguarding innovations and managing patent applications.
Project teams are essential, as they concentrate on developing specific products or technologies, coordinating efforts across various specialists.
The laboratory is led by the Director of Research and Development, who sets the strategic priorities for the lab’s work.
To ensure the effective operation of the R&D lab, a team of highly qualified specialists is essential, including researchers, developers, analysts, architects, and project managers, all with deep expertise and experience in their respective fields.
These professionals must stay current with the latest technological trends and possess practical skills in programming, algorithmic thinking, data analysis, and other relevant areas.
The lab’s operations are supported by documentation and project management systems, along with platforms for collaboration and knowledge sharing, which help maintain transparency and control over R&D processes.
Methodology, tools and metrics
One of the fundamental approaches to organizing work in IT R&D laboratories is the Customer Development methodology. This approach focuses on identifying the needs of internal customers and potential external users throughout all stages of product development.
Customer Development involves creating minimum viable products (MVPs) to test ideas and gather feedback.
To manage development processes and team interactions, Agile and Scrum methodologies are employed. These frameworks enhance the flexibility and adaptability of the development process, allowing teams to quickly respond to changes and new requirements. Regular meetings, such as daily standups and sprint reviews, are crucial for evaluating progress, addressing emerging issues, and finding solutions.
Key components include code review, which enhances code quality and refines the overall architecture of software solutions, and testing, which ensures the product meets specified requirements and functions reliably.
Key Performance Indicators (KPIs) are employed to assess the progress and effectiveness of the laboratory. These metrics gauge project success, team performance, and the laboratory’s overall efficiency. Commonly used KPIs include development time, the number of errors identified and resolved, customer satisfaction, and project profitability.
Another crucial aspect is defining and allocating the budget for the R&D laboratory. This process involves several stages, starting with evaluating the company’s strategic objectives and the R&D department’s capabilities. It also includes identifying priority research and development areas and establishing key goals to be achieved.
At the close of the budget period, an assessment is carried out to evaluate how effectively the funds were utilized and their contribution to achieving the established goals. This review helps identify the strengths and weaknesses in the laboratory’s performance and make necessary adjustments.
Results and their use
Integrating the outcomes of the work of an R&D laboratory into commercial products and services presents its own set of challenges. These include assessing the commercial viability of a product or technology, identifying target markets, and ensuring there is sufficient demand.
Research outcomes do not always transform into successful products due to insufficient demand or low profitability; such failures should be minimized through efforts to improve the quality of preliminary research work.
Protection of the lab-created intellectual property is also essential for the company success. This includes registering patents as well as ensuring confidentiality of R&D until it receives official certificate or gets commercialized.
The opportunity for staff training and professional development is also important for the future of the R&D lab format. Personnel’s involvement in conferences and seminars helps retain a high level of competence as well as employee engagement.
In this regard, the efforts to build links with universities and scientific organizations, as well as partnerships with academic and research institutions, in order to exchange knowledge, implement joint projects and attract young talents, are pivotal for the success of the R&D format.
Companies’ joint projects for developing technologies and products facilitate exchange of experience and resources. Also, today R&D projects in Russia can also be financed from government funds as well as programs that promote technology development.
R&D lab success criteria
Success criteria may differ from company to company. Here are top ones:
- R&D becomes commercially successful and helps increase the company’s revenue.
- Developments help achieve the company’s competitive advantages.
- Lab research outcome is used for registering patents.
- Research projects are of high quality, completed on schedule and within the established budget.
The company needs an R&D lab in the following cases:
- It has to develop its own unique solutions that cannot be purchased from third-party suppliers, or it is inefficient to do so.
- The company faces tasks requiring in-depth scientific research and development that is difficult to conduct without a specialized lab.
- The company’s top competitors have already opened their own R&D labs, which gives them substantial advantage.
- The company boasts sufficient financial resources to invest in creating and maintaining an R&D laboratory.
In certain cases, using services of external R&D centers or entering into partnerships with universities and research institutes proves more efficient.
The costs of launching an R&D lab may vary depending on many factors, such as its size, equipment, research area and employee qualifications, ranging RUR 50 to 200 mln. A more accurate estimate can be obtained based on specific conditions and requirements of a particular company and lab.
Summing it up: six steps to create an IT R&D lab
Step 1. Identify strategic goals and objectives of the R&D lab as well as the areas it will focus on (such as AI, information security, and so on). You should also establish key performance indicators (KPIs) to assess the lab performance.
Step 2. Build a team of qualified R&D professionals (developers, analysts, architects and project managers), and determine the roles and responsibilities for each member. Make efforts to ensure continuous training for employee development in order to maintain a high level of competence and expertise.
Step 3. Create infrastructure. Provide the lab with necessary equipment and software for R&D activities.
Step 4. Develop procedures and methods for the lab work, as well as procedures for research, testing and implementing new technologies. Introduce project management systems to monitor progress and coordinate the team’s work.
Step 5. Integrate results through introducing mechanisms to implement the research outcomes in the company’s business operations, and create channels for knowledge exchange within the company.
Step 6. Build external collaboration. Take efforts to develop partnerships with external organizations, such as universities, research centers, and other companies.
By Ivan Bolgar, Development Director, CorpSoft24