Making Sense of Outsourcing: Should You Go Hybrid or Captive?
Today everything is about innovation and agility, which means that business needs to start looking for better ways to optimize their tech development process.
As a result, outsourcing has emerged as a powerful tool, enabling companies to access a global talent pool, reduce costs, and accelerate project timelines. A Deloitte study revealed that 92% of G2000 companies use IT outsourcing, emphasizing its strategic value in the competitive market.
With two main options to pick from—hybrid and captive—it can feel a bit overwhelming to make a decision. So, we're here to help you choose!
Hybrid vs. Captive: Weighing the Pros and Cons
Hybrid Outsourcing: This flexible approach combines internal teams with external resources.
Captive Outsourcing: Here, you establish a dedicated development center in a foreign location.
Choosing the Right Path: Actionable Insights for You
So, which model is better? The truth is, it depends! Here's a cheat sheet to guide your decision:
Pro Tip: Don't be afraid to get creative! A hybrid-captive blend can be the perfect solution for some businesses, allowing you to leverage the strengths of both models.
Ready to dive deeper? Explore our comprehensive blog posts that unpack the world of outsourcing.
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Strategic Technology Sourcing Expert || Multilingual || Multicultural
1 个月Good article. Several VERY imoportant additions: 1) If you've never outsourced, go hybrid (aka with service providers). That way you can dynamically change without additional costs as you learn the "process" of outsourcing. Once you learn a geo then you can consider if having a captive makes sense. Better to start work without additional real estate/facilities/legal/HR worries. 2) Before you decide to go captive, consider the career progression (staffing pyramid) in the new location. Most people don't want to remain at the same level. Ensure you consider how to promote people, else your competitors will be happy to hire your center's experienced talent for whom you forgot to plan careers. 3) Not mentioned in the article, but India/Asia is not always the right solution. Other geos can work better depending on type of work. I (StrategyShore) can help you build matrices to determine the best work location based on Strategic/Mainstream/Legacy/Admin work types VS. FTE/Captive/Nearshore provider/Offshore provider/Onshore contractactor. It's informative to see your as-is model's costs compared to several to-be models. You can then strategically approach what pieces to move and why. There is muc more to the story that meets the eye!