Why this matters
RAG and fine-tuning solve different problems. RAG helps with changing knowledge and traceability, while fine-tuning helps with stable behavior and specialized style.
Recommended approach
Start with a decision tree: if facts change weekly or need citations, use RAG first. If behavior is stable and you need deterministic formatting, evaluate fine-tuning after RAG baseline performance.
Implementation checklist
- Estimate data freshness requirements
- Test citation reliability with RAG
- Validate output structure using schema constraints
- Only fine-tune if baseline fails target KPIs
Metrics to track
- Hallucination rate
- Citation hit rate
- Cost per successful task
- Latency at p95
Key takeaway
RAG is the default starting point for most business apps; fine-tuning is an optimization step, not a first step.