As you all know, there are two major styles of offshore development, “contract type development (contract for each project)” and “lab type development (lab type contract)”. Both styles have advantage and disadvantage, but we will focus on lab type development in Vietnam and I would like to introduce the advantage in detail.
１．What is lab type development?
Lab-based offshore software development is a collaborative model in which clients work with a fixed team of software engineers located overseas, with clearly defined timelines and budgets from the outset.
In Japan, the shortage of IT engineers has become increasingly severe and shows no signs of improving, mainly due to the country’s aging population. This is why the Lab-based offshore development model is emerging as a practical solution — not only helping to retain a stable team of high-quality Vietnamese engineers, but also effectively addressing the shortage of tech talent in Japan.
Offshore and lab type development
2. Benefits of Lab-Based Offshore Development
In general, software development often involves dealing with changing user requirements during the development process, or resolving sudden bugs inherited from previous projects. Most businesses understand that such project risks can affect both budget and timeline — even before the work begins. This challenge is especially common in offshore projects with Japanese clients, making it all the more important to consider the benefits of a lab-based contract model.
- Lab-Based Contracts Help Optimize Budget Management
One of the key advantages of lab-based contracts is improved budget control. With this model, both the team composition and overall budget are clearly defined from the start. Moreover, it offers flexibility in adjusting job descriptions and reallocating workload among team members. As a result, clients can proactively coordinate tasks with the offshore development team.
Key benefits of adopting the lab-based model include:
Securing a stable pool of human resources for your business
Enhancing project management efficiency and quality through internal processes
Clear understanding of each team member’s skills and experience
Easier budget planning and forecasting
As you can see, the lab-based offshore model offers a high level of adaptability to unforeseen changes during development — making it an ideal solution for long-term, evolving projects.
３．What can I do to make a lab type development successful?
According to the previous paragraph, it sounds like lab type development is perfect, but there are some difficulties to overcome in order to gain above benefits. In other words, there is no benefits expected without overcoming these difficulties. Then, let us show you what to do. There is 3 important matters.
- Training: Conduct skill up training
- Close communication: The relationship that can be called workmate
- Raising consciousness: Keep motivation up
3.1.Training is important in lab development
First of all, training is important. there are two types to make up members in offshore team.
- Lab development team made up only professional members
This is the most immediate way. Teams consist of only skilled and experienced members. It is Ideal, but it is actually difficult to gather such members enough in Vietnam. (Although there is higher possibility than Japan…) Also, you have to prepare enough cost to employ such members.
- Lab development team leaded by excellent key person
As a national strategy, it is hoped that Vietnam become an advanced IT country, so there are many young IT engineers. But unfortunately they don’t have much experience at the moment despite their high potential.
However, it is clear that some of them have already experienced offshore lab type development with Japan for many years.
Therefore, it is good way to allocate young engineers who have high potential with low cost, leaded by these experienced key persons. Then they accumulate project experience, and grow the team power.
It similar to educate and train new employees in your company. In addition, universities in Vietnam have an internship curriculum and the students take practical IT education. Therefore, lab development teams in Vietnam starts-up faster than Japan.
Realistically, it seems the best way to make up team leaded by excellent key person. First, strong guidance from the Japanese side is important. While training Vietnamese engineers, they gain experience on the actual project at OJT, Through this process, they will learn the software development process, quality concept, etc. that suits your company.
Please remember to make up the process while respecting the way of Vietnamese people. You can get a lot of tips from them because they have worked with various companies on lab development.
3.2 Close communication and good working relationships are important in lab type development.
When you carry out lab type development in Vietnam, it is very important to treat Vietnam as an important development partner, not only an offshore destination. It will make them trust you and try to meet your expectations.
I mentioned about “close communication”. The importance of communication is not only to lab type development, but also a common issue for offshore development.
However, the communication mentioned here means not business communication like regular meetings and reports, but rather face-to-face communication such as on-site invitations and business trips to Vietnam.
Communicating directly with them and talking on topics other than work will expose valuable faces that cannot be obtained through formal meetings and will build valuable bonds. It is ideal that you build close relationships with them.
3.3 Keeping motivation up is important in lab type development.
The purpose of lab type development is to secure excellent members sustainably.
In Vietnam, where the job transfer market is more active than in Japan, they are always attracted to good salaries, but that’s not all. What a important work they do and how important their position is in your team, there are essential to keeping their motivated up.
Achieving challenging work together and keeping motivation up can lead to securing long-term human resources.
４．Conclusion
To get the benefits of lab type offshore development, you need to as following; Raise up engineers and having them to your company’s development style, Build good relationship with them by close communication, To know their skills and characters well.
These are not special things but the same as things you’ve built with your Japanese partner over the years.
Although there are differences in language and nationality, you can do the same with Vietnamese partner, they will be an important long term partner because they have hot national character.
Lab type contracts are not only for low cost. As mentioned earlier, it will be more difficult to secure engineers in Japan alone. It is worth considering the lab type development by Vietnamese who familiar with Japan as a solution.
BAP IT Co., JSC currently operates offices in Japan, Vietnam, the United States, South Korea, and Australia, with a team of over 500 highly skilled IT engineers.
Our strength lies in our engineers’ proficiency in Japanese, English, and Vietnamese, enabling them to participate in projects with quality equivalent to those in Japan, while also helping businesses significantly reduce development costs.
With extensive experience in implementing Offshore projects under the Lab-based contract model, BAP is always ready to be your reliable partner, supporting your business in achieving stable and long-term growth.
Contact us today for consultation and to plan a suitable implementation strategy.
