What Is a R&D Center in the Tech Industry?
In the tech industry, an R&D center is an office that provides software development. They may focus on developing new products or improving and/or adding features to existing ones. One of the major reasons for a company to have an R&D office is to remain competitive with others in the industry. Although many people think having an R and D center is limited to big corporations like Amazon, Alphabet and Microsoft, many small and midsize companies, as well as startups, have an R&D team.
When It Makes Sense to Open an Offshore Research and Development Center
An offshore research and development center is an office of a company located in a different country where they work on developing and improving products. So when should your business consider having its own research and development company? Here are a few of the indications that you may be ready to open an offshore R and D facility.
- Seeking access to a new labor pool: you may have reached a point where the IT and engineering specialists you need for an R and D team aren’t available in your local talent pool. When you open an offshore center for research and development it will give you access to a new and larger pool of talent. You will have your own development team of experienced and skilled developers working just for you and representing your brand.
- Desire to lower development costs: development costs are likely to be high in your own country. Relocating your R&D processes to another country can significantly lower development expenses. The salaries for R&D engineers will be considerably less as will some associated expenses like office space. In addition, depending on the location you choose, you may see a reduction in taxes.
- Need to scale up: if you have reached the point with your business where you are ready to scale up, an offshore R&D center makes sense. It will be both easier and cheaper to do this by moving your development processes offshore.
- Frequently using outsourcing companies services: you may find that you are almost always using outsourcing companies to provide services. Over the long-term having your own offshore engineering R & D team in your own facility will be more efficient than outsourcing services and will give you complete control of the software development process.
- Reach new markets: one of the best ways to get recognized in a new market is to have a regional office in the area. An offshore facility for research and development can effectively raise awareness of your brand in foreign tech environments.
Benefits and Risks of Establishing an R&D Lab
There are some definite benefits that come from establishing an offshore research and development facility. Some of the advantages include:
- IT and engineering expertise: if you choose the right location, having an offshore research and development center will give you access to a large talent pool of IT experts from diverse industries. You will be able to assemble an R and D engineering team with the specific skill sets that you need to accomplish your goals.
- Lower costs to build a research and development facility: to begin with meeting your R and D staffing requirements will cost much less than getting the same level of skills and experience in your local area. Depending on your location the salary for a research and development engineer can be as much as 50% to 60% less. In addition the other expenses such as office space and maintenance will more than likely be less.
- Easy to scale: with an offshore research and development center you will have more flexibility. You will be able to scale up your operation much easier and faster than you could in-house and adapt to changes in your requirements.
While there are advantages to having an offshore R&D team there are some potential risks as well.
- Cultural barriers: cultural practices tend to vary from company to company. Accountability, time management, workload sharing and other cultural mindsets can be an issue when offshoring R&D and any differences could affect the development process adversely.
- Time zones: there could be a considerable time difference between your offshored R and D contractors and your home office. This can make scheduling a problem and cause difficulties when you need to contact them during your working hours.
- Lack of necessary language skills: communication issues can arise if your R & D team and you don’t speak the same language.
Why Consider Ukraine for IT Offshoring and Opening an R & D Facility
Ukraine has become a well-known outsourcing destination for IT offshoring and research and development centers. So why is Ukraine so popular for IT projects? Here are some of the reasons why you should open R&D center in Ukraine.
- Large pool of tech talent: according to the IT Industry in Ukraine 2019 Market Report there were 185,000 IT specialists in Ukraine and that number has grown since then. A Skill Value report ranks Ukraine number 5 in the world for the best engineers and number 8 in the world for programmers. The country also has a large number of colleges and universities turning out thousands of IT graduates every year as well as more in related fields. R&D engineers recruiting firms will be able to find many experienced and well qualified IT specialists with the skill sets you need for your company’s projects.
- Lower costs: salaries for IT specialists in Ukraine are much less than those in Western Europe and North America while the quality of service is just as good or better so there is a great value to cost ratio. Office space for your facility and administrative expenses will also be less greatly reducing your R&D costs.
- English skills and other languages: the majority of IT and other tech specialists in Ukraine have intermediate or better English language skills so there shouldn’t be communication difficulties. Many of those in technical fields speak 2 or 3 other languages as well.
- Convenient time zone: a problem that businesses often have when outsourcing to other countries is a large time difference which makes keeping in touch regularly and solving any issues quickly a problem. The time zone Ukraine is located in is GMT+2. Their working hours overlap with those of Western European countries and are not too far off from those in North America making it easy to coordinate activities.
- Few legal restrictions: to legally establish R&D company in a foreign country can often be quite difficult and involves additional licensing and bureaucratic checks among other things. Ukraine has a favorable outlook towards the opening of R&D centers, offices and departments by foreign companies. They provide an overall favorable environment for companies doing business there.
- Few cultural differences: Ukraine shares many of the same work values as the EU and US when it comes to responsibility, transparency and quality of service so it isn’t hard to find qualified specialists who are a good fit for your team.
Why Choose Our Company as Your Trusted R&D Service Provider
We are a BPO Ukraine based company that can help your company establish a center for R&D in Ukraine. It can be complicated getting set up in a foreign country and even more so if you aren’t familiar with how to create a research and development department, which is often the case with smaller businesses and startups.
Our research and development consulting service is experienced and has the know-how to set up R&D department for tech companies. From assisting with staffing to how to find an R&D lab for your company, providing support for legal issues such as employment contacts and organizing HR responsibilities, we can help you from beginning to end.
There are other companies out there that offer services for setting up research and development facilities. Here are a few of the reasons for choosing us to provide your software research and development services:
- Top talent: we have access to a large pool of IT specialists with extensive experience in diverse industries. Once we know your requirements we can quickly find tech specialists with the required qualifications to fill out your R&D team. We carefully vet every software developer to verify they have the required skills and experience.
- Cost-effective: salaries of our IT specialists are significantly less than those for developers in Western Europe and North America. Office space and administrative services will also be much lower. We will assist you in keeping your overhead down while providing a high level of service.
- Flexibility: there is no one-size-fits-all solution when it comes to opening a research and development center. We can adapt to your needs as called for. When the time comes that you want to expand your operations, we can help you scale up as required as your needs change.
- Transparency: good business relationships are built on trust and we endeavor to keep everything clear and transparent. All information is made available to you, there are no hidden costs, any issues are quickly addressed and updates are provided regularly.
- Language skills: all of our specialists are fluent in English. Aside from English, many of them speak other languages as well.
When you need a company with the experience and knowledge of how to implement research and development plans to set up an R&D center we can provide the assistance you require.
Providing R&D services isn’t all we do. We offer a number of other BPO services such as IT staff augmentation and back office support as well.
How We Help Our Clients Set Up an R&D Center
Setting up an R&D center can be complicated but we are there to help our clients every step of the way. We have a basic process for how to build R&D team and establish a research and facility center for clients that we follow. Here are the steps we take to help you set up an R&D center:
- Establishing requirements (weeks 0 – 2): this is the initial phase where we determine such things as the team size, your R&D team structure and the skill sets that you are looking for in team members.
- Planning (weeks 2 – 4): once all your requirements have been determined we proceed to the planning stage. This will include the terms of the contract, scope of the services to be provided, milestones we need to hit and deadlines that need to be met.
- Team core (months 1 – 3): we begin the hiring stage and recruit the core members for your R&D team. This will include candidate screening, interviewing, hiring and onboarding of your first team members so they can get started.
- Team expansion (months 4 – 6): additional candidates with the required skill sets are recruited and hired to fill out your team until it is complete.
- Evaluation (month 6): an assessment is made to determine if you are satisfied with the progress. Are you happy with the team, have milestones been achieved and deadlines met? At this point it is time to determine if you continue with your R&D center plans or exit.
- Adding administrative staff (months 6 – 9): with a decision to continue administrative staff will be recruited and onboarded to round out you complete staffing requirements.
- Research and development center finalization (months 10 – 12): your R&D center will be established as a legal business entity, a real estate search for your facilities will be made, lease agreements signed and an exit plan will be finalized.
- You have your R&D center!
The timeframes shown are for example purposes only. An actual timeline will depend on your specific requirements.