What is the Difference Between Tactical & Strategic Outsourcing?

Today, many businesses consider outsourcing as a strategic step to gain an edge over competitors. Earlier, cost reduction was the prime reason behind it. But now entrepreneurs are choosing the road to outsource for maintaining the efficiency in their core business operations.

Rather than getting involved in the tiresome process of hiring new employees; entrepreneurs are outsourcing their development process.

However, to make this strategy work in your favor, it’s important that you choose the best engagement model & right outsourcing strategy.

So, let’s do a quick tactical vs strategic outsourcing comparison, and understand which one is good for your business!!

Tactical Outsourcing

Well, as the name suggests, this type of outsourcing is thoughtfully and carefully done to achieve specific business goals. By adopting this approach, you can hire developers or a software development team to work on your project.

Tactical outsourcing works best for small and medium-sized enterprises. As it can help you to shorten the time to market or maybe bring the project back on track.

To be specific, if you want to complete the project in a concise time span this outsourcing strategy is for you. It’s because hiring developers in your local on short notice will cost you way more than hiring dedicated offshore developers.

The other case is where you need to hire developers for a particular technology. Let’s say you are planning to build mobile apps using Flutter (a cross-platform framework). As the technology is still new & emerging, it might be difficult for you to find developers in your locality.

So, in this situation, you can contact an IT outsourcing company and hire Flutter developers within a week’s time. Once your offshore developers are on-board, you can communicate with them thoroughly and outline the project charter as well as milestones.

The whole process will work smoothly, as in the case of working with an in-house team. The only difference is that your team will be sitting far away from you with hands-on industry experience.

Strategic Outsourcing

Is your business in the growth phase? Are you planning to scale up quickly? If yes, then choosing strategic outsourcing will be the right approach.

In short, this plan will work well for both startup and large scale enterprises, planning to scale outsource their entire business operation. Let’s assume that it is becoming difficult to manage all your development operations in-house.

To oversee this situation, you have two options:

• Hire more professionals
• Go offshore

Adding up local talent is indeed expensive. Therefore, most entrepreneurs prefer to move ahead with the second option, that is going offshore.

Now, moving a whole operation offshore means hiring a team that can take care of your project. And this indicates the perfect time to set up an offshore development center.

Not only it allows you to ramp up your team quickly but also offers you an advantage where you can increase in-house efficiency by focusing their efforts on important business matters. So, it’s like hitting two birds with one stone.

Words for the Wise:

Whether you choose tactical outsourcing or strategic outsourcing, it is important to address a few key points:

• The first point is the documentation. Ensure that you have outlined your requirements carefully.
• Get the background check of the company before hiring. Ask for the client reviews & portfolio to ensure that you will get the quality work consistently.
• Last but not least, sign a contract that defines all the guidelines, terms, and services to avoid any conflict later.

Strategic or Tactical outsourcing, Which One to Choose?

The answer depends on the project requirements. If you need dedicated offshore developers for short-term projects then you should choose tactical outsourcing.

On the other hand, for long term contracts where the project is evolving & requirements may change, strategic outsourcing is the right choice. It will free you from the extra burden to handle & let you focus on other important business functions.