OM to keep outsourcing industry on target

  • TECH
  • Friday, 08 Oct 2010

PETALING JAYA: The local outsourcing industry is expected to generate a total revenue of US$1.9bil (RM6.1bil) by 2013, according to Outsourcing Malaysia (OM). Last year, the industry hit the US$1.1bil (RM3.5bil)mark.

To achieve the 2013 target, the industry must maintain its 15% annual growth, said David Wong, OM chairman. OM is a chapter of the Association of the Computer and Multimedia Industry of Malaysia (Pikom).

To spur the local outsourcing industry, OM will be focusing on cross-border partnerships. This will be the key driver to elevate local players’ competencies and help them become global service-providers.

OM plans to organise several business missions to the United States, Singapore, Japan, South Korea and Dubai over the next 24 months, in the wake of encouraging results achieved from a business trip to Australia in August.

“More than RM300mil worth of collaboration opportunities between Malaysian and Australian IT companies’ were identified,” said Wong.

“The Australian companies recognise our competitive edge in the areas of contact centre operations and services, enterprise resource planning, human resource and finance, and accounting outsourcing.

“Our country’s position as a gateway to the Asean region is another compelling reason for the Australian companies to consider partnering us. And the Malaysian companies can leverage on Australia’s respected global brands,” he said.

A total of 60 Australian companies participated in the Australian mission, which was endorsed by the Multimedia Development Corporation (MDeC), Malaysia External Trade Development Corp (Martrade), and the Australian Information Industry Association (AIIA) which is the equivalent of Pikom.

Moving forward

Although Malaysia still lags behind India and China in outsourcing services, the country has been consistently ranked as an attractive location for outsourcing services in reports by A.T. Kearney, a global management consulting firm.

Wong believes that local outsourcing companies should create a niche market by providing outsourcing services, such as Islamic banking or knowledge-based activities, in the areas of design and research.

To further increase the competitiveness of Malaysian outsourcing companies, OM is planning to introduce policy incentives next month to encourage mergers and acquisitions.

OM said small outsourcing companies here should merge, or band together. to increase their capabilities because the move would enable them to more effectively compete with their international counterparts, and help increase the types of services they can offer.

“About 80% of OM members (slightly more than 100 companies) that were surveyed, said they are willing to have some kind of joint venture or be part of a merger with local or foreign counterparts,” Wong said.

He said that OM is also looking into arranging loan facilities for such companies that are in need of working capital or business expansion funds.

Other plans include identifying potential clients and matching these to the local companies that have the right capability and experience.

OM is also organising its Smart Sourcing Summit 2010, which will take place from Dec 8-10 in Kuala Lumpur. The conference will focus on several topics, including managing resources, enhancing capabilities, and controlling costs.

The OM website — — has been revamped and the chapter has compiled a 2010/2011 directory of Malaysia’s outsourcing industry, featuring more than 130 companies.


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