OM David Wong

Outlook report reveals good prospects for Malaysia’s global business services

Malaysia’s Global Business Services, ‘GBS’ industry (formerly and also known as ‘Shared Services & Outsourcing Industry, ‘SSO’) is in a stronger position to tap the USD670 billion global market; with several factors driving growth for the sector.

This was shared during Outsourcing Malaysia (‘OM’)’s launch of the Global Business Services Outlook 2015, which is the first ever industry report to provide a detailed analysis of the Buyer’s perspective. The launch is being held in conjunction with the OM hosted Smart Sourcing Summit 2015 – an industry targeted event aimed at the promotion of best practices, industry expertise and experience from across the region.

David Wong, Outsourcing Malaysia Chairman presenting the GBS Report

David Wong, Outsourcing Malaysia Chairman presenting the GBS Report

This report is based on findings gathered from respondents from 15 key countries / economies; and reveals that the global GBS industry stood at USD670 billion in 2014,  with APAC accounting for the largest share of 36% at USD240 billion. Of this, Malaysia’s share of the pie is comparatively small at USD4 billion, which indicates much room for growth.

From Years 2014-2019, GBS is expected to grow steadily with APAC recording an average CAGR of 5% per annum. However, four selected markets – India, South Korea, Malaysia and Singapore, in particular, will record higher CAGR of 10-15% over the next five years.

High Industry Demands from BFSI, Government, Retail & Hospitality

Overall, demand that fuels GBS growth is expected to stem from the banking and financial services (‘BFSI’), government, retail and hospitality/ tourism industries.

Demand from the BFSI segment is expected to come from banks as they face pressure to reduce operational cost, offer seamless customer service and replace legacy systems.

Meanwhile, the government sector is expected grow faster due to increase in IT penetration and adoption across government-based services in different countries. The retail and hospitality industry will see growth fueling from the rise of e-commerce and increasing adoption of ICT.

The outsourcing demand from the global telecommunication sector is expected to slow down; however in APAC it is expected to register a higher growth due to rise in demand for application service delivery, service provisioning, activation services and billing services.

For ‘specific’ growth segments in ICT – the OM report highlights Infrastructure Maintenance, Information Technology Management (ITM), Business Process Management (BPM), Software Services and Infrastructure Management Services – as those likely to see a significant take-up, as compared to other ICT segments.

David Wong, Chairman of OM says, “This year, the report  was created from a Buyer’s perspective; to give a different point of view after having previously shed light on Malaysia’s position as a Seller or Provider of SSO offerings, and the strategic roadmap for the industry.

We wanted to know what buyers (both from internal country industries and overseas markets) wanted; in order to know how Malaysia – as an GBS/ SSO provider, can best position itself to meet those requirements to maintain its attractiveness as a top destination for GBS / SSO.”

He added that the current report findings augur well for the nation, but local players needs to be cognizant of the specific industry demands and new technologies such as Big Data Analytics, Cloud Computing and new disruptive business models that are driving demand for GBS / SSO.

Capitalise on Current Plus Factors

Despite current economic challenges, Malaysia continues to retain its attractiveness as a leading GBS location, given the country’s continued ability to provide cost savings for buyers and its capacity to serve global markets.

“Given Malaysia’s strong positioning as a leading GBS location, the weaker ringgit could also work in favour as overseas Buyers look to invest capital, purchase assets or hire talent for GBS operations here. Major GBS customers will continue to be from the developed economies i.e. the US, UK and Japan. But demand will also come from within APAC,” added Wong.

Aside from looking to be aligned with emerging trends, the report also recommends that GBS players aggressively build awareness of services capabilities with the Malaysian government and GLCs, develop or acquire Infrastructure Management and Information Technology Management capabilities and forge partnerships to move up the value chain and expand market reach, especially given the imminent implementation of the AEC.

The launch event also saw OM Malaysia signing two Memorandum of Understanding (MoU) agreements with University Kebangsaan Malaysia (UKM) and Call Centre Association of Malaysia (CCAM) respectively.

The MoU between OM and UKM signals the start of a much closer working relationship between both parties in several key areas. This includes the exchange of students, scholars and educational resources; the development of GBS related study and training programmes, joint research and knowledge sharing activities, as well as development of workshops, conferences and other events. OM will also play a lead role in bridging the gap between GBS firms and local educational institutions.

The MoU between OM and CCAM is aimed at fostering closer collaboration between towards undertaking joint research activities i.e. collection of data and report publishing as well as training and development.

In conjunction with the Summit, a separate awards ceremony – Outsourcing Malaysia Excellence Awards 2015 was held to recognise and honour outstanding contributions, individuals and accomplishments in the industry. The winners list includes:

  • BPO Project of The Year –   i-Talent Management Sdn Bhd
  • ITO Project of The Year – Emerio (M) Sdn Bhd
  • Best Infrastructure Management of The Year – Hitachi Sunway Data Centre Services Sdn Bhd
  • Best Shared Services Operation  of The Year – N2N Global Solutions Sdn Bhd
  • Outsourcing Leader of The Year – Dato’ Seri Idris Jala

About Outsourcing Malaysia

Outsourcing Malaysia (OM), an initiative of the outsourcing industry and a chapter of PIKOM – the country’s national ICT industry association, is envisioned to promote and develop Malaysia’s outsourcing services industry as a global hub for high-value outsourcing. Supported by its founding partner – the Multimedia Development Corporation (MDeC) – and spearheaded by a group of prominent industry leaders from the global services industry, OM focuses on enabling both buyers and providers to work together on addressing service needs within the aegis of global best practices and competencies.

About PIKOM

PIKOM, The National ICT Association Of Malaysia is the association representing the information and communications technology (ICT) industry in Malaysia. Its membership currently stands at over 1400 comprising companies involved in a whole spectrum of ICT products and services which commands 80% of the total ICT trade in Malaysia.




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