Software Research & Development

By: Noor Maqsood

Road map includes following areas:

1: What is Software Research and Development or (R&D)?

2: Difference between Software Research and Development.

3: Basic R&D and Software Development process.

4: Importance of R&D in Software Development.

5: How to create skilled R&D team?

6: How to formulate approx. R&D cost?

7: Advantages of R&D.

8: Challenges of R&D
What is Software Research and Development or (R&D)?

1 Companies often spend resources on certain investigative undertakings in an effort to make

discoveries that can help develop new products or way of doing things or work towards enhancing
pre-existing products or processes. These activities come under the Research and Development
(R&D) umbrella. The term ​research & development, or R&D usually refers to the type of activity that
companies or entrepreneurs undertake to create or improve products and processes.

2 There is a misconception that R&D is the domain of high tech technology firms or the big
pharmaceutical companies. In fact, most established consumer goods companies dedicate a
significant part of their resources towards developing new versions of products or improving
existing designs. However, where most other firms may only spend less than 5 percent of their
revenue on research, industries such as pharmaceutical, software or high technology products
need to spend significantly given the nature of their products. It is the approach for the Software
Industry to develop and improve software products which determines the success and stability
of the company. The approach followed by a software company in a Software Product
Development Process determines the future success of the company. Three aspects which are
very important in any software product are; INNOVATION, QUALITY and TECHNOLOGY. These 3
aspects must be addressed within the constraints of timeframe, associated cost and available
expertise.
Difference between the Software Research and Development

1 R&D- Experimenting with ideas and technologies which may not be a product.
Software Development- Working on a specific product desired by any client or based on market
demand.

2 R&D- All about developing new solutions for a specific social problem. No one can predict the end
result.
Software Development- All about developing a product, targeted to resolve a specific company/
business problem, the end result is it should resolve the issue, without failing.

3 R&D- Primarily expected to provide research results.

Software Development- Primarily expected to provide a working software.

4 R&D- Managing software development for various sized companies, R&D takes on different meanings
depending on the size of the company, customer base, etc.
Software Development- Targeted to a specific size of company or business. It depends on current
requirement.
Difference between the Software Research and Development

5 R&D- There is no pre-defined deadline or time limit for R&D process. It can take years to develop one
product.
Software Development- Strict deadline and time frame are pre-defined. You have to design, develop
and deliver the product on time.

R&D- As of Dec 2016, Augmented Reality, Self-Driven Automated Car, Virtual Reality and alike falls
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under R&D. R&D has been happening since years and will continue for years. After years of research,
still there is no tangible product available in the market.
Software Development- Mobile App Development for Salon shop and for Pharma, Web Application
Development for Athletes, Parking Permit are few examples of Software Development.
 Basic R&D and Software Development Process
In research there are three such systems – basic, applied research and development.

1 Basic Research: Usually, this type of system is aimed at the study of the basic and integral
understanding of the product and the study of its qualities. This type of research is not strongly
associated with commercial or practical use. This is usually the potential interest of the company.
2 Applied Research: This type is directly related to ​IT research and development​. Applied research
has specific goals and is aimed at satisfying customer requests or requirements. The second
model facilitates the development of new products, as there are scientists and researchers in the
team whose task is applied research in a technical field closely related to the company’s
production. As a result, the research and development in software​ industry​ provide the company
with the improvement of existing products and the development of new products.

3 Development Research: This system is aimed at studying the current product, to improve it, both
in terms of production and materials, and designing new ideas for this product. There is also a
division of development and production. The development explores and generates ideas for the
project, when, like engineering, uses this research in the production of the final product. At the
same time, mergers, acquisitions, and partnerships between companies are also forms of ​
research and development systems​. In this case, the companies join their efforts to contribute to
the development of the new, using the knowledge and talents of other companies.
Basic R&D and Software Development Process

1 Planning: This is the first phase in the systems development

process. It identifies whether or not there is the need for a new
system to achieve a business's strategic objectives. This is a
preliminary plan (or a feasibility study) for a company's
business initiative to acquire the resources to build on an
infrastructure to modify or improve a service. The company
might be trying to meet or exceed expectations for their
employees, customers and stakeholders too.
2 System Analysis and Requirements: The second phase is where
businesses will work on the source of their problem or the need
for a change. In the event of a problem, possible solutions are
submitted and analyzed to identify the best fit for the ultimate
goal(s) of the project. This is where teams consider the
functional requirements of the project or solution. There are
several tools businesses can use that are specific to the second
phase. They include:
CASE (Computer Aided Systems/Software Engineering)
Requirements gathering
Structured analysis
Basic R&D and Software Development Process
System design: This is the step for end users to discuss and
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determine their specific business information needs for the
proposed system. It's during this phase that they will consider
the essential components (hardware and/or software) structure
(networking capabilities), processing and procedures for the
system to accomplish its objectives.
Development: The fourth phase is when the real work begins—in
4 particular, when a programmer, network engineer and/or
database developer are brought on to do the major work on the
project. This work includes using a flow chart to ensure that the
process of the system is properly organized. The development
stage is also characterized by instillation and change. Focusing
on training can be a huge benefit during this phase. 
Integration and Testing: The fifth phase involves systems
5 integration and system testing (of programs and procedures).
Testing may be repeated, specifically to check for errors, bugs
and interoperability. This testing will be performed until the end
user finds it acceptable. Another part of this phase is verification
and validation, both of which will help ensure the program's
successful completion.
Basic R&D and Software Development Process

6 Implementation: Additionally, this phase involves the actual

installation of the newly-developed system. This step puts the
project into production by moving the data and components
from the old system and placing them in the new system via a
direct cutover. While this can be a risky (and complicated)
move, the cutover typically happens during off-peak hours,
thus minimizing the risk. Both system analysts and end-users
should now see the realization of the project that has
implemented changes.
7 Operations and Maintenance: The seventh and final phase
involves maintenance and regular required updates. This step
is when end users can fine-tune the system, if they wish, to
boost performance, add new capabilities or meet additional
user requirements.
Importance of R&D in Software Development

1 New software in every niche hits the market every day. It is the result of creatives with great new ideas and
software engineers who can put those ideas into innovative software.
2 Consider just the financial services industry, as an example. Banks began with software that allowed
customers to access their accounts online, check their balances, schedule transfers and pull up a daily
accounting of expenditures. But they knew that, as online banking grew, consumers would demand more
and more services. Enter R&D. Now, consumers can access their bank and do many of the following,
because of new software that has been developed.
They can receive personalized breakdowns of categories of expenses, so they can see where their
money is going and how they might modify their budgets.
They can apply online for all types of loans.
They can be provided recommendations of how they might better plan for short- and long-term
savings, based upon their individual goals.
3 It is the same with every business niche. Those companies that invest in software R&D will gain a
competitive edge; those that do not will pay the price of lost customers/clients and a second-tier position
within their industries.
There is no need to ask why R&D is important – it is the ticket to remaining competitive and to serving
customers/clients better than that competition. It is also the ticket to getting recognition as a leader in the
sector; and it is the ticket to attracting the human expertise that will move a company forward.
How to create skilled R&D teams?
1 Although it is believed that only large corporations need R&D, as
they spend huge sums on research and development, R&D can
ME
benefit even small companies with a small team of specialists. SELECT

There are many informal directions for creating a ​research and

development team​.
2 Using the example of such actions, you can implement R&D in your process:
Be aware of the trends of your target market.
Exchange ideas and knowledge with employees about what changes
have occurred in the market.
Collect feedback and ideas from your customers.
3 The ​R&D team ​act a huge role in the development and success of your future
product. Although in the basic model this department is independent and
separated from other departments, most often ​R&D software ​team needs to
directly cooperate with sales and production units. In addition to creating new
products, updating and improving an existing product is the central goal of any
company that wants to lead the market. The research and development is
needed for improving, evaluating, and working the product. There is also an ability
to outsource ​research and development companies​ that will meet your firm’s
needs.
How to formulate approx. R&D cost?
1 All company directors should be involved in R&D discussion.

2 Decide on the budget you can give for R&D.

3 Discuss all additional costs of R&D (hire more people, outsource development team, contact
outsourcing company).

4 Agree on the time frames of each development stage and agree on responsibilities and R&D revision
plan.

5 Set up the final budget.

Advantages of R&D
1 Tax breaks: Research and Development expenses are often tax deductible. This depends on the
country of operations of course but a significant write-off can be a great way to offset large
initial investments. But it is important to understand what kind of research activities are
deductible and which ones are not. Generally, things like market research or an assessment of
historical information are not deductible.

2 Costs: A company can use research to identify leaner and more cost effective means of
manufacturing. This reduction in cost can either help provide a more reasonably priced product
to the customer or increase the profit margin.

Financing: When an investor sets out to put their resources into any company, they tend to
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prefer those who can become market leaders and innovate constantly. An effective R&D
function goes a long way in helping to achieve these objectives for a company. Investors see
this as a proactive approach to business and they may end up financing the costs associated
with maintaining this R&D function.
Advantages of R&D
4 Recruitment: Top talent is also attracted to innovative companies doing exciting things. With a
successful Research and Development function, qualified candidates will be excited to join the
company.

5 Patents: Through R&D based developments, companies can acquire patents for their products.
These can help them gain market advantage and cement their position in the industry. This one
time product development can lead to long term profits.
Challenges of R&D
1 High Costs: Initial setup costs as well as continued investment are necessary to keep research work
cutting edge and relevant. Not all companies may find it feasible to continue this expenditure.

2 Increased Timescales: Once a commitment to R&D is made, it may take many years for the actual
product to reach the market and a number of years will be filled with no return on continued heavy
investment.

3 Uncertain Results: Not all research that is undertaken yields results. Many ideas and solutions are
scrapped midway and work has to start from the beginning

4 Market Conditions: There is always the danger that a significant new invention or innovation will
render years of research obsolete and create setbacks in the industry with competitors becoming front
runners for the customer’s business.

It is important for any business to understand the advantages and disadvantages of engaging in
Research and Development activities. Once these are studied, then the step can be taken towards
becoming and R&D organization. In the meanwhile, it is good practice to inculcate a research mind
set and research oriented thinking within all employees, no matter what their functional area of
expertise.
THANK YOU
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