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Disruption dials up very promising 2017 for Malaysia's outsourcing industry

AvantiKumar | Jan. 27, 2017
During a pre-Chinese New Year briefing, PIKOM's Outsourcing Malaysia Chairman gave further details of Malaysia’s Global Business Services industry.

outsourcing (IDG)

Image (IDG) - Outsourcing industry


Drilling down further in Malaysia's national ICT industry body PIKOM's recent positive 2017 forecasts as part of a Computerworld Malaysia industry roundup, the outsourcing services industry will strengthen the country's position as a high-value based location via "disruptive" measures.

The Shared Services & Outsourcing industry (SSO), now locally known as the Global Business Services (GBS), is expected to buck the trend and register stronger growth in 2017, said Cheah Kok Hoong, Outsourcing Malaysia chairman, speaking during a pre-Chinese New Year briefing.

This, despite prevailing weakness in the global economy and various macro-challenges, will further strengthen and "position Malaysia as a world-class, high-value based location for outsourcing services, said Cheah.
He said the sector's projected growth is underpinned by various factors. 'These include, (but not limited to) increasing pressure on global companies to reduce cost (in the wake of a moderating economy), the attractive incentives and infrastructure within the local GBS sector, the strong US Dollar and various geo-political developments that could potentially see companies relocate existing GBS operations to Malaysia."

Outsourcing Malaysia (OM), an initiative of the outsourcing industry and a chapter of PIKOM, promotes and develops Malaysia's outsourcing services industry as a global hub for high-value outsourcing.

Cheah Kok Hoong_OM Chairman

Photo- Cheah Kok Hoong, Chairman, Outsourcing Malaysia

The competition

Cheah said the various policies and strategies put in place over the years have created long-term value for the GBS sector. "[However], we do face stiff competition from countries on a linear grid such as India and the Philippines. Outsourcing Malaysia together with the [national ICT agency] Malaysia Digital Economy Corporation (MDEC) and other partners have worked towards developing a comprehensive GBS eco-system with strong emphasis on supporting the needs of buyers, end-users and service providers."

He said the GBS industry was worth US$670 billion in 2014 with Asia Pacific having the largest market share, at 36 percent or US$240 billion.  "Malaysia's GBS Sector will see a compounded annual growth rate (CAGR) of 10-15 percent for the next five years. In 2016 alone, more than 6,000 skilled jobs were created for a total of 85,000 jobs - surpassing the target set by 2017."
"We will continue to employ new ideas and means to disrupt the status quo - shifting from a 'low-cost' value proposition to a high-value based service provider," Cheah said. "We are beginning to see the fruits of our efforts. This will be more evident in 2017 - giving us an edge in 2017 despite the many challenges and stiff competition faced from other countries."
He said that by leveraging on Malaysia's existing strengths, for 2017, Outsourcing Malaysia will continue developing a high-value based GBS sector in attracting foreign investments.

Some other initiatives include the opening of Outsourcing Malaysia's satellite office in Iskandar Malaysia (in collaboration with i2M Ventures) to support the growth of the fledgling GBS sector in the region, said Cheah.

"A high-value based model consists of knowledge, talent pool, top class technology enabled Infrastructure and a comprehensive legal framework on intellectual properties," he said. "It will also include access to comprehensive knowledge base, risk mitigation strategies, rapid re-engineering of key business processes and access to specific talent resources."

"The talent eco-system does play an important role in delivering high value to your clients by filling the gaps in talent employability for the industry," Cheah said. "OM will be focusing on the GBS (IT, HR & Finance) training and upskilling of the workforce in this space. We look forward to forging strategic partnerships and collaboration with various agencies, public and private partnerships."


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