Outsourcing Provider and Product Partner: What are Differences?

The search for a partner to build impactful digital products requires businesses to make decisions on collaborating with a suitable partner among a long list of IT providers with various services and products on the market.

In Vietnam, besides the popular Outsourcing Providers, there is also a Product Partner – a new model that GEEK Up is currently one of the pioneers in Vietnam.

The definition of Outsourcing Provider and Product Partner

Outsourcing is a business practice in which defined requirements are farmed out to Outsourcing Provider. The benefit of this model for businesses is resource optimization. In many cases, to boost the development process, product launch, or operation management, businesses may delegate tasks or specific requirements to the Outsourcing Provider. The core value of this service is to meet the expected deliverables with minimal costs and resources as commitment.

In the field of Product Development, there are Product Partners along with Outsourcing Providers and Product Developers. To transform business ideas and visions into digital products that meet core goals, the Product Partner will collect insights, coordinate with relevant departments, and ensure the output is a specialized digital products that solves a specific business problem. In Vietnam, GEEK Up is one of the pioneers in the model of Product Partner.

The differences between Outsourcing Provider and Product Partner

One of the most notable differences between these two models is the Product Partner will be inclined to the Product Mindset while the Outsourcing Provider purely follows Technical mindset which optimizes the process and resources to deliver outputs. This mindset shows in processes, working methods, the scope of work & deliverables.

Method of approach

To build digital products for businesses, the Outsourcing Provider requires detailed Product roadmap, the target users’ information, the main functions as well as the relevant technical requirements. The Outsourcing Provider will compete stage by stage, get inputs, then process, and deliver outputs. This process requires constantly coordination and verification by Product team and IT team of businesses to ensure outputs meet the previous commitment.

A Product Partner, with a Product Mindset, will work with businesses for an alignment about the final output, and how to approach and coordinate. Then Product Partner will work with the Business team to collect insight, build up product strategies and the preliminary concept from business goals. Following these insights, the Product Partner starts to design, code, and launch digital products. Along this process is a seamless information exchange, which requires high consensus between the business teams and the Product Partner.

Scope of work

When building a digital product, there are various differences in scopes of two models: besides "Build the Product Right, the Product Partner also focuses on aspects of Build the Right Product" that resolves problems and meet the business goals.

Meanwhile, the Outsourcing Provider focuses on the business’s specific requirements to Build the Product Right. Thereby the scope are only encapsulated in the process of receiving requests, input materials, performing product design tasks, as well as Frontend/Backend/Mobile programming until handing over a fully working product according to the business’s requirements.

Expertise

The Product Partner owns various Product Expertise and feature services to product development such as Product Analysis, Product Ideation, User Research, User Experience Design... while the Outsourcing Provider just provides the essential human resources (designing, programming, ...) to ensure the completion of tasks according to the business’s requirements.

Coordination level

The relationship between clients and the Outsourcing Provider will end after handing over outputs.

The highlight of Product Partner is the process of collecting insight and execution requiring extensive coordination between the business’s internal teams and the product development team in terms of people and expertise. The Product Partner plays the role of a partnership sharing the core value of successful digital products with the business.

The deliverables

At the early stage, the Outsourcing Provider defines the business’s brief and provides a Business Analysis as well as a list of functional requirements. Then, following the detailed business insights about Visual Input and Technical Requirements, the Outsourcing Provider will process and hand over deliverables, a part or a working product with features and designs corresponding to these requirements.

The Product Partner focuses on a close cooperation with business to build the specific products (Prototype, MVP or a working product) based on Product Ideas, Business Insight, User Insight, and business Requirements. The Product Partner team will conduct digital products, and input useful information and data from Business Research, Product Conceptualization, and UX Research before creating UX/UI design as well as a finished product.

Pros & Cons

Outsourcing Provider

- Pros: Approachable model because of the reasonable cost, a familiar collaboration to many businesses. The Outsourcing Provider can solve effectively the business’s problem with the least efforts but clear requirements at the beginning.
- Cons: Businesses should deeply understand about problems of business and digital products. With new businesses without explicit requirements, they will face many troubles when cooperating with the Outsourcing Provider, especially creating new concept products.

Product Partner

- Pros: The Product Partner specializes in building digital products which all decisions come from a consistent product mindset. The Product Partner cooperates with businesses from the early stage from general ideas to form specific outlines. This Partner will consult, design, and realize to put the product into operation, adapts to user’s needs & brings core values to the businesses.
- Cons: Businesses must provide full insight, raise concepts and closely discuss with the Product Partner. Not all businesses spend more effort on this activity, as well as have high trust in the Product Partner.

With the above sharing, GEEK Up hopes to provide useful knowledge so that you can distinguish between the Outsourcing Provider and Product Partner, thereby making the right decision when choosing partners building the impactful products.

Learn more about When is the right time to collaborate with Product Partner to optimize investment cost in building digital products?