Outsourcing industry needs shot in arm

  • Technology
  • Friday, 30 Mar 2012

KUALA LUMPUR: The local outsourcing and shared services (OSS) business isn’t as as rosy as its players would like it to be. But special interest group Outsourcing Malaysia takes this as a challenge.

Its chairman, David Wong, said the OSS industry here has hardly changed from what it was in 2009, so there is a lot of catching up to do for the players.

“The industry in developed nations is growing at a pace of 25% to 30% a year, while ours is only 15%-20%. In a smaller economy like ours, it should be growing at a faster rate,” he said.

This is why the special interest group is redoubling its efforts to agitate industry growth and get more OSS businesses joining its ranks.

According to him, only the multinationals are supporting the OSS industry, while there seems to be a lack of interest by GLCs (government-linked companies) and government agencies, in particular.

“This could be due to a number of reasons, including a fear of losing control of their operational processes, or that they will have to implement job cuts which is a sensitive matter,” Wong said.

Also, the local OSS industry is facing fierce competition globally from countries such as India, which has been in the business for much longer, and the Philippines which is an emerging outsourcing services powerhouse.

“Competing with them isn’t easy so we need a multipronged solution to bring our outsourcing services companies up to par,” said Wong, adding that the special interest group is working on this.

It has started by identifying those local OSS companies that have the potential to go global and was strengthening various weaknesses in these before pitting them against their global rivals.

“The main weakness of our companies lies in talent development. Some need market access while others could do with some funding to grow their business,” Wong said.

There are 30 OSS companies that have been identified but only about 30% of them are ready to take on global customers; the rest would only be up to the mark in about one to three years time.

These initiatives are based on an assessment that Outsourcing Malaysia conducted last year, with the help of market researcher IDC.

Wong said the group is working with Multimedia Development Corp, custodian of the MSC Malaysia initiative, in these areas. MSC Malaysia is aimed at leapfrogging the nation to a knowledge-based economy.

Outsourcing Malaysia has 105 members, which engage in knowledge sharing, have access to training modules, and participate in trade missions.

For more information, go to www.outsourcingmalaysia.org.my.

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