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Are you struggling with a lack of development resources to drive your IT projects forward and wondering what to do next?
This article explains how the Vietnamese offshore development company Solashi Co., Ltd can help solve the problem of development resource shortages.
Specifically, we will cover an overview and current state of development resources, the causes and effects of resource shortages, and possible countermeasures.
Even if your project is at a standstill, reading this article to the end may give you a clue to solving the issue. If you're an IT manager, be sure to read on.
Akira Shimazoe
CEO of Solashi Japan LLC. Engaged in the development and operation of internal systems at Suntory. Founded Yper Inc., serving as CTO and CPO, contributing to product launch and growth.
What Are Development Resources?
Development resources refer to the assets necessary to carry out IT projects such as system and software development.
The term “resource” means assets or elements needed to achieve a goal and elements that generate value when used.
In the field of system development, the term "development resources" is commonly used. Development resources are mainly categorized into five types, with specific examples listed below.
| Type of Development Resource | Examples |
| Personnel (People) | Employees, external staff, etc. |
| Physical Resources (Things) | Facilities (offices and equipment), tools necessary for development, etc. |
| Capital (Money) | Labor costs, office rent, equipment procurement costs, etc. |
| Development Time | Time for project execution and troubleshooting, etc. |
| Required Information | Internal know-how, various data, etc. |
Each type of development resource plays a vital role in driving IT projects forward.
Among them, “people” (hereafter referred to as “human resources”) have a particularly significant impact, not only in system development but also in overall business activities.
This is because engineers, programmers, and project managers — in other words, people — are indispensable for the success of IT projects.
This article will focus on explaining “people” as a key development resource in more detail.
The Current State of Development Resources in Japan
This section explains the current situation of development resources in Japan.
According to the Ministry of Economy, Trade and Industry's 2018 DX Report, if aging, complex, and black-boxed legacy systems remain in use, the retirement of IT personnel and the end of support may lead to increasing risks. The economic loss could reach up to 12 trillion yen per year after 2025 — about three times the current level. This is referred to as the “2025 cliff.”
One of the main causes of the 2025 cliff is a shortage of development resources. In this section, we will take a closer look at the current situation, especially the shortage of IT personnel in business companies.
70% of Business Companies Face IT Personnel Shortages
According to the Information-technology Promotion Agency (IPA), more than 70% of the surveyed business companies (excluding IT companies) felt a shortage of IT personnel in both quality and quantity.
(Reference: Survey on Skill Transformation in the Digital Era (FY2022)│Information-technology Promotion Agency)
This indicates that many companies in Japan are struggling with a shortage of IT-related personnel.
The Most Short-Staffed Areas Are Programming and Data Analysis
According to a survey conducted by RAXUS Inc., the areas considered to be most seriously understaffed are program development and data analysis.
To address the shortage, many engineers are independently working on learning new skills and improving project management abilities.
From this, we can see that there is a significant shortage of skilled personnel with expertise in programming and data analysis.
Causes of Development Resource Shortages
There are two main causes behind development resource shortages.
- Decline in working population and expansion of IT demand
- Insufficient budget for IT investment
Decline in Working Population and Expansion of IT Demand
In Japan today, the decreasing working population and growing IT demand have created a major gap between the supply and demand of IT personnel. As a result, there is a shortage of personnel, leading to development resource shortages.
According to the Statistics Bureau of Japan, the total population as of October 1, 2022, was 124.947 million people.
Japan’s total population has declined continuously for 12 years. Additionally, the population under 15 and over 75 are as follows:
- Population under age 15: 14.503 million people (a decrease of 282,000 from the previous year)
- Population aged 75 and over: 19.364 million people (an increase of 691,000 from the previous year)
(Reference: Population Estimates (As of October 1, 2022)│Statistics Bureau of Japan)
From this, it’s clear that Japan is experiencing both a declining population and an aging society, which ultimately leads to a reduced working population.
In addition, IT demand is expected to continue rising. It’s estimated that by 2030, Japan may face a shortage of about 790,000 IT personnel.
The shortage of IT personnel is expected to have a significant impact on the shortage of development resources.
Insufficient Budget for IT Investment
One major reason for the shortage of development resources is the lack of budget that companies can allocate for IT investments.
According to a certain survey, although many companies recognize the need for IT investment, about 36% responded that they lack the budget to promote it.
When it comes to large-scale system development, it can cost hundreds of millions of yen. If the budget cannot be secured, it becomes difficult to allocate sufficient development resources for system development and maintenance operations.
Furthermore, there is often not enough budget for recruitment costs to secure IT talent, or for educational costs to train engineers. Procuring and maintaining equipment and devices may also become difficult.
As a result, companies are unable to gather personnel with the necessary expertise and skills to move IT projects forward, leading to a shortage of development resources.
Three Impacts of Insufficient Development Resources
What kind of impacts occur when development resources are insufficient? Here are three major effects.
- Increased Turnover Rate
- Schedule Delays
- Decline in Quality
Increased Turnover Rate
The first impact is an increase in the turnover rate.
Due to a shortage of development resources, there is a risk that employees engaged in development tasks may leave the company.
This is because the number of IT personnel required to push projects forward is insufficient, and the amount of tasks each member is responsible for tends to increase.
In some cases, this may lead to overtime and overwork. It can also cause physical and mental stress.
It becomes difficult to maintain a work-life balance, which can result in employee resignations.
According to a survey by Geeknia Inc. regarding "Resignations of IT Engineers," the top reasons IT engineers wanted to quit were "salary" (70.2%), "work-life balance" (56.4%), and "evaluation/promotion" (43.6%).
A lack of development resources makes it difficult to achieve work-life balance and becomes a factor contributing to employee turnover.
Moreover, when members resign, it creates a vicious cycle where already scarce development resources become even more lacking.
Schedule Delays
Projects may not proceed according to the planned schedule, and products may not be completed by the scheduled date.
This is because a lack of development resources reduces productivity and slows down development speed.
Inadequate development environments, such as lack of DX (digital transformation) or use of outdated tools, can also deteriorate work efficiency.
Not only development but also release timing may be delayed, making it difficult to launch businesses that match industry trends and customer needs. Schedule delays may impact company performance.
Decline in Quality
Due to inadequate personnel and development environments, there is a possibility that the quality of products will decline.
For example, if there are no personnel skilled in UI (user interface) and UX (user experience)—which are important for modern web services—it becomes difficult to ensure quality in system or app appearance and usability.
Also, if there is a shortage of test engineers, it increases the workload of UI testing to check system behavior.
They must check many items, such as “Is the layout displayed correctly?” and “Is the expected result shown?” There is a risk of operational or checking errors, and some defects may be left unresolved.
With insufficient development resources, it becomes difficult to achieve and maintain high quality. If quality declines, user ratings may also drop.
Five Solutions to Resolve Development Resource Shortages
To overcome development resource shortages and lead projects to success, the following measures are recommended:
- Review and Optimize Development Resource Management
- Hiring a Wide Range of Talent
- Utilization of SES (System Engineering Service)
- Nearshore Development
- Offshore Development
Development Resources and Optimization
It is important to optimize current development resources.
By optimizing the allocation of existing personnel, you may be able to achieve results without incurring new costs. Specifically, identify the skills possessed by current team members and assign them to roles that match their strengths.
Also, visualize the work status of team members. Understand who is responsible for what tasks. Organize the amount of time and workload spent on each task.
Based on that, assign the right people to high-priority tasks. If time is being consumed by miscellaneous tasks, consider introducing tools to streamline daily operations.
Diverse Talent Recruitment
When hiring new IT personnel, try utilizing people with various working styles.
- Freelancers
- Those seeking part-time or reduced-hour work
- Those who prefer remote work
If you're not fixated on full-time or permanent positions, securing talent may become easier. Allowing flexible work arrangements can also help reduce costs.
Utilizing SES
SES (System Engineering Service) refers to a dispatch service that outsources development tasks to external IT personnel.
Employees belonging to the provider company work on-site at the client’s location for a fixed period, offering technical services under a contract.
The goal is not to deliver a finished product but to support the development, operation, and maintenance of systems and software.
Since highly skilled and experienced professionals can be utilized immediately, this is especially ideal for projects requiring specialized IT expertise.
Nearshore Development
Nearshore development is a method of outsourcing development tasks to companies located in regional areas within Japan.
Development is conducted in areas such as Tohoku, Kyushu, or Hokkaido, rather than urban centers like Tokyo or Osaka.
Because costs such as office rent and utilities can be reduced, development is generally more affordable than in major metropolitan areas.
Since projects are conducted domestically in Japan, there are no major differences in development environments. Maintaining a certain level of quality is one of the key advantages.
Related article: 8 Steps to Proceed with Offshore Development! Key Points to Avoid Failure
Offshore Development
Offshore development is a method of outsourcing development tasks to companies in other countries.
By outsourcing to countries like Vietnam, the Philippines, or Malaysia—where labor costs are lower than in Japan—you can significantly reduce overall expenses.
If you choose a country with a high level of technological expertise, development using advanced technologies such as blockchain is also possible.
If you’re not confident in foreign languages, consider working with companies that have Japanese project managers (PMs) or those that can handle email communication in Japanese without issue.
For more detailed information on offshore development, check out: 『What is Offshore Development? Basic Knowledge, Benefits, and Strategies to Avoid Failure』
If You're Facing Development Resource Challenges, Leave It to Solashi
Development resource shortages are occurring due to the shrinking labor population, growing IT demand, and insufficient budgets for IT investment.
If your company is lacking development resources, first focus on optimizing internal staffing and recruitment. If the issue still persists, external outsourcing—such as offshore or nearshore development—is an effective solution.
Solashi Co., Ltd is an offshore development company based in Vietnam. We have supported numerous clients struggling with development resource shortages through development and business consulting.
Our team includes skilled engineers and Japanese project managers. We ensure sufficient resources and a solid development structure to drive your project forward.
If you're facing issues such as “We can’t hire developers and need stable development resources,” or “We don’t have enough resources and want to outsource the development,” feel free to contact us. We’ll do our utmost to support the success of your project.
Akira Shimazoe
Representative of Solashi Japan LLC. Born in April 1989 in Fukuoka Prefecture. Graduated from the Graduate School of Information and Mathematical Sciences at Osaka Prefecture University. Joined Suntory System Technology Co., Ltd., an IT subsidiary of Suntory Holdings, in 2014. Broadly responsible for the development, operation, and implementation of vending machine delivery management, efficiency improvements, and sales management systems. Founded Yper Inc. in 2017, serving as CTO and CPO. Contributed to the launch and growth of the app-linked delivery bag "OKIPPA." Selected for Toyo Keizai's prestigious "Amazing Venture 100" and Forbes' "Forbes 30 Under 30 Asia 2019."
