Malaysia has emerged as one of the leading destinations for outsourcing with five Malaysian companies included in the Global Services 100 list. Backed by world class infrastructure and supportive government bodies, the country has seen an influx of global outsourcing giants like HSBC, Standard Chartered Bank, DHL, Shell, IBM, HP, EDS and CSC, in the recent past.
The Malaysian economy is backed by a democratic government with its centralized financial planning placed across five years. The focus of the last two plans (eighth and ninth) has been on the outsourcing industry. The Malaysian outsourcing industry has seen an increase in the ICT spend in the Ninth Malaysian Plan (9MP) as compared to the previous one. The Malaysian economy, due to its government led initiatives in the IT sector and its export relations with neighboring Asia Pacific countries, has reached an inflection point which is conducive for the growth of the IT-BPO industry.
Revenues from the Malaysian IT/ITeS outsourcing industry are expected to touch $1.1 billion in 2009. The industry is expected to grow at a CAGR of 15% to reach $1.9 billion by 2013. Currently, IT outsourcing services in Malaysia has a greater share of the overall outsourcing market, followed by BPO services; while knowledge services outsourcing, still in its nascent stage, has a smaller share.
Malaysia has been recognized as one of the preferred destinations for outsourcing, however it faces some challenges. One of the major challenges for the Malaysian outsourcing industry is to overcome constraints with regards to scalability. The total number of employees in the industry is roughly comparable to the number of new hires by a leading Indian IT outsourcing service provider. Employee costs are 15% to 20% higher when compared to other popular destinations like India. One of the key concerns for the outsourcing industry in Malaysia is the need to move up the value chain to offer high value services as opposed to highly commoditized services in IT or BPO.
Outsourcing Malaysia (OM) and ValueNotes publication “Outsourcing Malaysia: Scaling New Heights”, provides an in-depth analysis of the service provider landscape in Malaysia. The report brings out the key strengths and challenges faced by the country’s service providers. The report also highlights the growth drivers and provides the key trends and insights for opportunities in the Malaysian outsourcing industry.
This report will help
- Companies planning to setup outsourcing operations in Malaysia
- Companies looking to start captive operations in Asia
- Service providers around the globe, especially in Malaysia, neighboring Asian countries and the Middle East to understand the Malaysian outsourcing landscape
- Consultants and investors looking to invest in the Malaysian outsourcing industry
The report is based on secondary information as well as extensive interviews with a number of Malaysian outsourcing service providers.
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