Outsourcing Malaysia: In Search of Excellence
By Dian Schaffhauser
...
Projections Look Positive
Outsourcing Malaysia is a new joint initiative by several groups -- the Association of the Computer and Multimedia Industry of Malaysia
(PIKOM), Multimedia Development Corp. (MDeC), and Malaysia Debt Ventures (MDV) -- to position the country as an attractive location
for shared services and outsourcing (SSO). (One participant recalled how, at an early meeting of the various organizations, guests from
Mumbai looked around the room and were "astounded. They said, 'You know, I sat in the first NASCOMM meeting, and it looked just like
this.’")But Malaysia is hardly new to the business of global services. This small country of 24 million in Southeast Asia is already host to
dozens of multinationals that have tapped expertise in the energy, finance and logistics industries, many through captive arrangements.
In both its 2004 and 2005 Global Services Location Indexes, consulting firm A.T. Kearney named Malaysia the top third location for
shared services and outsourcing behind only India and China and just ahead of Singapore. The ranking analyzes the top 40 service
locations worldwide against 40 measurements in three categories: cost, people skills and availability and business environment.
According to the report, "...Government promotion policies continue to pay off... Malaysia has augmented continued investment in
world-class infrastructure along the Multimedia Super-Corridor, with further incentives for corporations choosing to locate in Malaysia
and additional policies to open up the labor pool and deepen English language and technical skills throughout the population."
In its Global Institute Labor Supply Database McKinsey points out that although Malaysia has a "relatively small" pool of talent,
its graduates have "significant international experience." That is a result of three decades of foreign investment in the country by
global companies such as Shell, DHL and Dell.
Likewise, Frost & Sullivan, which shared the stage with the outsourcing consortium in Austin, also has identified the potential for major
growth of SSO in Malaysia in survey work that is ongoing.
The advisory firm sizes the SSO market worldwide at $758 billion for 2005. Of that, offshoring accounts for about 6% -- $46.5 billion.
While domestic SSO is expected to grow about 12% a year over the next three to four years, offshore is expected to grow between 20%
and 30% annually over the same timeframe...
Feature Projects...
Feature Projects...