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Why has PIKOM's Outsourcing Malaysia opened a new Iskandar Malaysia centre?

AvantiKumar | May 8, 2017
Nine major foreign and local companies have now established outsourcing centres and back office operations in Iskandar Puteri.

Outsourcing Malaysia southern office - Iskandar Malaysia

Photo -  Launch of Outsourcing Malaysia's new Southern Office in Iskandar Puteri, Johor (From left) Justin J Anthony, OM Director; Anthony Raja Devadoss, Deputy Chair of OM; Zulfiqar Zainuddin, Managing Director i2M Ventures Sdn. Bhd;  Dato' Azman Mahmud, CEO of MIDA;  Cheah Kok Hoong, OM Chairman; Tuan Haji Mahadon Marnin, General Manager of Johor State Investment Centre (JSIC);  Datuk Khairil Anwar, CEO of Iskandar Investment Berhad (IIB); and Zulaifah Abdul Ghani , CFO of Medini Iskandar Malaysia (MIM).


  Following the rapid growth of the GBS (Global Business Services and Shared Services & Outsourcing, SSO) industry in Iskandar Malaysia, Outsourcing Malaysia (OM), which is a chapter of the National ICT Association of Malaysia (PIKOM), has now established a southern office in Iskandar Puteri.

In recent years, OM has stepped up its commitment to support industry members who have established operations in Iskandar Puteri via the GBS ISKANDAR initiative, explained OM chairman, Cheah Kok Hoong.

Cheah said OM will continue to work closely with the government and GBS companies in developing key areas such industry knowledge, talent pool, technology, legal frameworks on intellectual properties and more.
The new office is part of OM's drive to establish world-class GBS eco-systems across Malaysia, and so help the growth of the local GBS industry as well attract foreign companies, he said.

Cheah talked of the bigger picture, adding that the local GBS sector was expected to see a compounded annual growth rate (CAGR) of 10-15 percent for the next three years. These comments echo his forecasts in a pre-Chinese New Year briefing in Kuala Lumpur this year when he pointed to disruption as a positive factor for the local GBS industry.

In 2016 alone, more than 6,000 skilled jobs were created - surpassing the target set for jobs to be created by 2017, he said.
In common with many industry leader insights [see What's really in store for Malaysia's IT industry in 2017], PIKOM's recent research also offered a positive view of the country's overall ICT industry prospects despite various fragile operating concerns. [See - 'Despite Trump, TPPA and Ringgit woes, Malaysia's 2017 ICT outlook remains bullish, says PIKOM']
 GBS Iskandar's role
  Meanwhile, GBS ISKANDAR was created to help capture a larger share of the growing global business services market pie, commented Cheah.  This share is expected to reach RM6.5 billion by 2020. To date, GBS ISKANDAR has created more than 2,800 professional jobs within the GBS sector while successfully attracting more than RM1.4 billion (US$315 million) in committed investments.
GBS ISKANDAR is an initiative by i2M Ventures and it is a specialised programme to attract businesses to establish GBS operations in Iskandar Puteri, Iskandar Malaysia.
 So far, nine companies have established outsourcing centres and back office operations in facilities within GBS ISKANDAR. These are Frost & Sullivan, Courts Asia, Vistra, Imagineering Institute, Nityo Infotech, Odinsoft, Brandt International, VTC and DayThree. The last three are OM member companies.
The Malaysian Investment Development Authority (MIDA) and i2M Ventures - a wholly owned subsidiary of national investment arm Khazanah Nasional are among OM's strategic partners responsible for the promotion initiatives for the Global Business Services (GBS) and Shared Services & Outsourcing (SSO) sector in Iskandar Puteri, Iskandar Malaysia.
Commenting on the opening of OM's southern office, Dato' Azman Mahmud,  who is MIDA chief executive officer, said, "MIDA, being a permanent member of the GBS ISKANDAR Steering Committee, welcomes the presence of Outsourcing Malaysia towards our common goal of building a world-class business environment in Malaysia. Being one of the drivers to position Malaysia as a global hub for high-value outsourcing, OM adds to our on-going efforts in creating high-value and knowledge-based jobs for Malaysia. OM's presence here will further catalyse the growth of Iskandar Puteri as a thriving business services hub in the region."
"Companies that incorporate shared services activities in Malaysia as part of their qualifying services are eligible for the Principal Hub (PH) scheme, a game changer introduced in 2015," added Azman.

"As at December 2016, MIDA has approved a total of 19 PH companies, representing a diverse spectrum of industries ranging from E&E, F&B, Oil and Gas as well as consumer products," he said. "The migration of shared services functions has led to the creation of high value job opportunities, which in the long run will enhance the quality of Malaysia's talent pool through exposures on international best practices and standards."

"We are looking forward to our continued collaboration with MIDA, OM and other partnering agencies as well as the Johor state government to attract more quality investments into Iskandar Puteri," said Zulfiqar Zainuddin, managing director of i2M.       

OM's Cheah added: "It's about providing more location options for companies - local or foreign to establish GBS operations in Malaysia where it best suits their business requirements. Given its strategic location as the World's Best Nearshore to Singapore, its lower cost base, the availability of a highly skilled, multi-lingual talent pool and the many incentives provided by the government, the GBS ISKANDAR initiative based in Iskandar Puteri is poised to grow."
He said,"It will become the ideal business services hub for Multinational Companies (MNCs) and Regional Headquarters (RHQs) for companies especially those based in Singapore."


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