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Malaysia's outsourcing industry to grow between 15 and 20 per cent

KUALA LUMPUR, May 17 (NNN-Bernama) -- Malaysia's outsourcing industry is expected to grow between 15 and 20 per cent this year as more companies outsource their services to remain competitive.

However, to remain competitive in the outsourcing market in the future, Malaysia will have to focus on segments where it can have an edge such as the mid-layer segment as the low-end segment is now dominated by India.

"I foresee good growth in the outsourcing industry because it helps to drive down cost," said Interactive Intelligence Inc's regional sales director for Asean, David Toh Yue Heng.

He told Bernama recently that the outsourcing industry in Asia was led by India for years but as salaries went up, people started to look at other countries that offered better and value-added outsourcing services.

According to Toh, Malaysia's advantage is its multilingual talents.

"We can speak multiple language apart from English, Malay, Chinese and Tamil, and some even speak Japanese and Korean," he said.

Based on a study by AT Kearney, Malaysia is ranked third in the Asia Pacific region for outsourcing.

Asked whether Malaysia was prepared to become a contact centre hub in the future, Toh said Malaysia has "all the ingredients to become a successful hub".

Among them were skilled workers, resources and infrastructure as well as reasonable cost, he said.

"Hence, with all the ingredients, it is possible," he added.

Toh said the government and the people in the industry should work hand-in-hand to achieve their aims and attract external markets.

Among the key areas that Malaysia could focus were the government sector, and inbound and outbound markets, he said.

Toh said the ongoing efforts by government agencies to improve the public delivery system offered opportunities for call centre operators to look into the segment.

Traditionally, he said, most government agencies used the telephone system for communication.

Of other segments, the outbound market is one of the key areas with potential for growth, Toh said.

He said outbound call is one initiated from a call centre agent to a customer on behalf of the call centre or a client.

Typical outbound calls include include telemarketing, sales or fund-raising calls, as well as calls for contact list updating, surveys or verification services.

A call centre may handle either outbound or inbound calls exclusively or deal with a combination of both.

http://www.export.by/en/?act=news&mode=view&id=19508

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Rating the Up-and-Coming Offshore Outsourcing Hotspots

Offshore/outsourcing firms in Malaysia, Indonesia, the Philippines, and Thailand might lack the resources of Indian heavyweights such as Tata or WiPro, but they aren't sitting still.

India and China continue to be the biggest (and most established) names in offshore outsourcing according to new research from market-watcher Gartner Inc. Both countries increasingly have plenty of competition, however.

A new Gartner report paints a picture of thriving outsourcing ecosystems in several Asia-Pacific locales -- such as Malaysia, Indonesia, the Philippines, Thailand, and Vietnam.

The new offshore firms currently lack the resources, infrastructure, and reach of established heavyweights such as Tata or WiPro, but the upstarts aren't sitting still. Moreover, like their Indian and Chinese rivals, many are getting boosts from their national governments. The upshot, according to Gartner, is that most Asia-Pacific outsourcers (with the exceptions of Indonesia and Vietnam) are able to offer good to excellent infrastructure services.

"Countries such as Malaysia, the Philippines, and Vietnam have continued to strengthen their position against leading alternatives, while Indonesia has entered the top 10 for the first time," said Jim Longwood, research vice president at Gartner, in a statement. "Some of these countries have invested considerably and leveraged increased demand for lower-cost services. The global financial crisis forced many organizations to place a greater emphasis on cost optimization."

The Gartner report, 10 Leading Locations for Offshore Services in Asia Pacific and Japan for 2010, lists India as the top offshore destination, with China as (a still distant) number two. Elsewhere, however, things are considerably more competitive: everyone, Gartner says, has an angle.

Australia, New Zealand, and Singapore, for example, compete (and differentiate) based both on the comparative maturity of their outsourcing services and on the relative stability or intelligibility of their outsourcing practices: all three countries earned high marks for political and economic stability, as well as for language skills. Upstart entrants, on the other hand, largely compete on cost.

Vietnam, for example, leverages rock-bottom pricing to offset its deficiencies in other areas. It fared particularly poorly on the data and intellectual property and security and privacy measures, according to Gartner.

On the other hand, the analyst firm notes, Malaysia, Thailand, the Philippines, and Indonesia have been able to achieve a kind of happy medium between low-cost and adequate service. All four countries position themselves as low-cost alternatives -- albeit with fewer bona fides (e.g., resources, experience, or reputation) -- to established (but in some cases more costly) options elsewhere in the Asia-Pacific region. All four countries turned in Top-10 finishes in Gartner's latest offshore outsourcing tally.

The efforts of both outsourcing upstarts and established contenders (a grouping that includes China, Australia, New Zealand, and Singapore) appear to be bearing fruit, according to Gartner. For example, even though India's outsourcing industry continues to grow, the sub-continent's share of the overall outsourcing pie is steadily shrinking. What's more, Indian outsourcers are now grappling with many of the same issues -- including wage inflation, turnover, or financial inconsistencies -- that bedevil established services firms in first-world locales.

Outsourcing upstarts are also thinking tactically, Gartner notes. "In view of India's dominance, many countries trying to tap into this market are reassessing their strategy and looking at niche markets [such as call centers], logistics, and other back-office functions where they might have a physical proximity advantage over mature countries like Australia, Hong Kong, and Singapore," Longwood said.

Indonesia, which this year displaced Pakistan in Gartner's Asia-Pacific Top 10, improved its standing by concentrating on what it does best -- in its case, mining and manufacturing. Its internal stability didn't hurt it, either.

"This was largely due to Indonesia's noticeable progress in addressing offshore opportunities rather than Pakistan's drop in performance, but political instability was also an issue here," Longwood explained.

Gartner said outsources are especially wary of political or economic instability. In this respect, offshore destinations such as Thailand, Vietnam, and the Philippines are viewed as less stable than other locales.

"While low cost is an important factor, the political and economic environment remains a concern for many companies when moving business to offshore locations," a Gartner statement pointed out.

About the Author

Stephen Swoyer is a New York-based freelance journalist who writes about technology

http://esj.com/Articles/2010/03/30/Offshore-Outsourcing.aspx?p=1

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Gartner Identifies Top 10 Locations for Offshore Services in Asia Pacific in 2010

India and China Remain Undisputed Leaders But Considerable Investments in Offshore Services Has Other Countries Strengthening Their Positions

Sydney, Australia, March 25, 2010 —  India and China remain the undisputed leaders for offshore IT and business process outsourcing services in the Asia Pacific region, however, a number of countries are making considerable investments in this area and positioning themselves as credible alternatives, according to Gartner’s latest research.

For the report ‘10 Leading Locations for Offshore Services in Asia Pacific and Japan for 2010’, Gartner analysed the capabilities and potential of various countries as offshore services locations in the region. A separate report identifies the top 30 globally.

“Countries such as Malaysia, the Philippines and Vietnam have continued to strengthen their position against leading alternatives, while Indonesia has entered the top 10 for the first time,” said Jim Longwood, research vice president at Gartner. “Some of these countries have invested considerably and leveraged increased demand for lower-cost services. The global financial crisis forced many organisations to place a greater emphasis on cost optimisation.”

The 10 leading countries in Asia Pacific included the undisputed leader in offshore services India, with China remaining the greatest challenger in terms of potential scale. The other countries include a mix of mature environments that offer limited cost benefits (Australia, New Zealand and Singapore) and emerging countries with a variety of challenges, but attractive costs (Malaysia, Indonesia, the Philippines, Thailand and Vietnam).

During the last 12 months there has been significant activity in many countries to consolidate or grow their positions as leading locations for offshore services, according to Gartner. Although India continues to grow in terms of IT services being exported, its relative share of the overall worldwide total has declined as a result. India is also starting to face some challenges including wage inflation, local attrition rates, geopolitical issues and financial irregularities, which are opening opportunities for other countries that are also improving their capabilities to target local service demands of more-mature regional Asian clients.

“In view of India’s dominance, many countries trying to tap into this market are reassessing their strategy and looking at niche markets like call centres, logistics and other back-office functions where they might have a physical proximity advantage over mature countries like Australia, Hong Kong and Singapore,” said Mr Longwood.

Indonesia was a new entrant into the top 10 list this year due to its expanding business environment targeting both offshore IT and business services, its large labour pool and its well-established industry base in mining and manufacturing involving prominent multinational companies. Pakistan dropped off the top 10 list.

“This was largely due to Indonesia’s noticeable progress in addressing offshore opportunities rather than Pakistan’s drop in performance, but political instability was also an issue here,” said Mr Longwood.

The global financial crisis and US currency fluctuations still remain a challenge for offshore vendors and clients. While the Asia Pacific region is experiencing a lesser impact from the global financial crisis, varying currency exchange rates against the US dollar have affected the attractiveness of some countries in the region. Countries like Australia, whose currency rebounded strongly, should see an increase in domestic demand for offshore services and a marginal decrease in its attractiveness for niche services.

“As organisations increasingly look at global delivery as a means to reduce cost, they will need to focus on important areas such as security, data and IP protection and compliance,” said Mr Longwood. “However, the link between lower risk and higher cost holds true.”

The mature markets of Australia, Singapore and New Zealand offered limited cost savings, but led the ratings for language, political and economic environment, cultural compatibility, globalisation and legal maturity, data and intellectual property, security and privacy.

Whereas Vietnam was the only country to receive an excellent rating for cost; it received ratings of fair or poor on every other criterion, with data and intellectual property, security and privacy where it performed worst.

Countries such as Thailand, Vietnam, the Philippines and Indonesia all rated less favourably for political and economic environment. While low cost is an important factor, the political and economic environment remains a concern for many companies when moving business to offshore locations.

Infrastructure is the only area where most countries ranged from good to excellent, with Vietnam and Indonesia the only exceptions. Most locations were considered good to very good for language and cultural compatibility whilst China, Indonesia, Thailand and Vietnam weren’t rated as strongly.

In addition to the top 10, four other countries were also strongly considered: Pakistan, Sri Lanka, Bangladesh and North Korea. All of these countries have started to establish attractive environments for companies looking for low-cost countries or that have external service providers located in these countries that are beginning to sell services beyond the domestic market.

Additional information is available in the Gartner report "Gartner's 10 Leading Locations for Offshore Services in the Asia Pacific and Japan Region for 2010” at http://www.gartner.com/resId=1300113

Note to editors:

*The top 10 countries for offshore services were rated according to 10 criteria that will help determine which locations are right for individual organisations. The 10 criteria were: language, government support, labour pool, infrastructure, educational system, cost, political and economic environment, cultural compatibility, globalalisation and legal maturity, and data and intellectual property security and privacy.

http://www.gartner.com/it/page.jsp?id=1329213

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Outsourcing Joins Billion Dollar Club

By STEVEN PATRICK

PETALING JAYA: Outsourcing in Malaysia has just become a billion-dollar business as revenue for the sector has jumped 18% to hit the US$1.1bil (RM3.6bil) mark this year, according to a report by Indian research firm, ValueNotes Database.The figure includes revenue from IT services, Business Process Outsourcing (BPO) and knowledge services, and is expected to grow 15% annually for the next five years. This is due to Malaysia’s multilingual capability and infrastructure, said the report.

Still, the Malaysian outsourcing sector cannot afford to rest on its laurels as outsourcing remains at less than 1% of the nation’s Gross Domestic Product.

Rather than relying on plain-vanilla call-centres, the report said that there are niches that local outsourcing companies could strive to fill. Some of the these niches include legal, engineering, manufacturing design and animation services.

Arun Jethmalani, chief executive officer of ValueNotes said that the key concern for the outsourcing industry in Malaysia is to move up the value chain to offer high value services, as opposed to highly commoditised services in IT or BPO.

“There is a huge market for specialised engineering design talents. With Malaysia’s experience in manufacturing and oil and gas services, it could look at moving into this area, instead of just callcentres,” he said.

“The billing rates for specialist jobs like this are two to three times that of a callcentre,” he added.

Bobby Varanasi, an outsourcing consultant, said that an example of a Malaysian company moving up the value chain in outsourcing is Strand Aerospace Sdn Bhd. The company does computer-aided stress testing on the aeroplane engines of Boeing and Airbus.

Outsourcing Malaysia chairman David Wong said that the country could also find an outsourcing niche in Islamic banking.

“Islamic banking is complex and we have 30 years of experience in it. We could cooperate with a Middle Eastern player to advance Islamic banking,” he said.

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Malaysian outsourcing firms to consolidate

KUALA LUMPUR--Malaysia's outsourcing and shared services (SSO) industry is likely to undergo a consolidation of sorts as it seeks to reinvent itself in the face of stiff competition in the global market, according to the country's national outsourcing association.

Outsourcing Malaysia Chairman David Wong acknowledged there were too many small and midsize local SSO companies in the country, revealing that the association has over 100 members.

"In the outsourcing business, the name of the game is the ability to scale. Obviously, if you are small, you'll find it difficult to do that and won't be able to bid for major global contracts," Wong said at a media briefing here Thursday. For example, he said, a company with a 100-seat call center operation would find it tough to bid for job that requires a 5,000-seat operation.

In view of this, he said Outsourcing Malaysia is rolling out a three-year plan to promote the creation of two or three SSO consortiums, which will be ready to compete globally by 2012.

Wong explained: "We have been talking with government ministries and agencies on the setting of a fund to facilitate mergers and acquisitions in the local SSO sector. The fund should be at least US$100 million."

The process of consolidating has already begun. Wong said his own business process outsourcing (BPO) services company SnT Global, acquired seven companies over the past several years and is still to ink more acquisitions or partnerships with other players.

The Sunway Group also confirmed it was looking to buy outsourcing services companies in the region. Cheah Kok Hoong, Sunway E-Systems's director who also attended the briefing, told ZDNet Asia the group recently acquired a Japanese engineering services outsourcing provider and was looking at possible acquisitions in Malaysia, Indonesia and Thailand.

Government-linked private equity fund, Ekuiti Nasional (Ekuinas), is also reportedly mulling potential investment in the country's major outsourcing services providers. The MDeC said it is in discussion with Ekuinas with a list of 35 top MSC Malaysia companies for consideration.

Rizatuddin Ramli, a director at the MDeC's industry development division, said over half of the 35 companies were involved primarily in ICT services, including outsourcing. Ekuinas has been allocated an initial capital of 500 million ringgit (US$146.8 million) that will be enlarged to 10 billion ringgit (US$293.6 million) eventually.

Malaysia outsourcing challenge

At the briefing, Bobby Varanasi, Outsourcing Malaysia's head of marketing and branding, also presented findings from an IDC report, commissioned by Outsourcing Malaysia and the Multimedia Development Corporation (MDeC), on Malaysia's outsourcing landscape.

The study revealed that the local SSO sector faced serious challenges that must be addressed for the industry to compete against global rivals.

Varanasi said the IDC report highlighted that the health of the country's outsourcing business "could be better".

According to the study, for on-shore service opportunities, business deals from local companies was "almost nil" and there were few business wins involving Western companies. For near‐shore business opportunities, despite Malaysia's proximity to growing economies, the country was not as attractive as India or the Philippines, the report said.

"Offshore business opportunities, despite possessing the requisite infrastructure and catalysts, we have not seen any growth in demand for Malaysia as an offshore destination," the report noted. "Further non‐availability of key management capabilities to create and engage with global clients is fully lacking in a competitive context."

IDC also highlighted the need for local players to offer scale and volume and bottom‐line savings by creating "portfolio" services, and not simply offer discrete services such as call centers or custom development.

"Provide value and top‐line impact by focusing on 'vertical' solutions--Malaysia's price points cannot afford low rates for non‐core discrete services, given higher cost structures in the country," it added.

The report also called for "aggressive adoption of outsourcing in the domestic marketplace" to support local providers going global. It recommended local providers work with foreign players as prime sub-contractors to acquire capabilities, scale and knowledge of global service delivery, rather than try to obtain end-users as key clients.

Other key findings of the IDC report:

•Malaysia's total technology and technology-enabled services market, including shared services, outsourcing, joint ventures and partially-owned subsidiaries, is estimated to be US$3 billion with a projected compounded annual growth rate of 17 percent.

•Government, financial services and insurance, and manufacturing, design and integration sectors present the largest market opportunities. About two-third of local market is dominated by foreign vendors that have inked large deals in these sectors.

•Key vendor criteria include scalability, capability and skillsets, and reliability.

•Niche market opportunities exist for local players in hosting, remote management and engineering services for computer aided modeling (CAD), prototyping and testing, in oil and gas and automotive sectors.

Lee Min Keong is a freelance IT writer based in Malaysia.

URL:http://www.zdnetasia.com/malaysian-outsourcing-firms-to-consolidate-62060997.htm

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Malaysian outsourcing industry to see higher revenue

KUALA LUMPUR, Feb. 4 (Xinhua) -- Malaysia's outsourcing industry is expected to see an year-on-year increase of 20-25 percent for revenue in 2010, said David Wong Nan Fay, Chairman of Outsourcing Malaysia.

He made the remark in a media briefing after releasing the report "Strategic planning and tactical road maps for Malaysian organizations to become leading global outsourcing providers" here on Thursday.

The revenues would be mainly contributed by the revenues would be from retail, healthcare, financial and others.

http://www.encyclopedia.com/doc/1P2-21224286.html 

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Outsourcing Revenue to Hit US$1.1b this Year

MALAYSIA'S outsourcing industry may increase to US$1.1 billion this year from about US$900 million last year, according to the Association of the Computer and Multimedia Industry of Malaysia (PIKOM).

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Malaysia's Outsourcing Market to Continue High Growth

Tuesday, 25 September 2009 21:48

MALAYSIA's outsourcing market will continue its high growth but outsourcing players should carve out their own niche, according to results of the organisation Outsourcing Malaysia's report, Outsourcing in Malaysia: Scaling New Heights, released in Petaling Jaya on 25 August, 2009.

Outsourcing Malaysia, a chapter of the national ICT association, PIKOM (Association of the Computer and Multimedia Industry Malaysia) and is the first of its kind in Malaysia to provide a detailed analysis of the vendor landscape, along with future trends, insights and challenges for the Malaysian outsourcing industry. The research was jointly undertaken with ValueNotes Database, a leading provider of business intelligence and research organisation.

According to the report, the Malaysian outsourcing industry is estimated to be worth US$1.1 billion for the year 2009, with a compound annual growth rate (CAGR) of 15% over the next five years to reach US$1.9 billion in terms of revenue in 2013. These include revenues from IT services, business process outsourcing services and knowledge services.

Currently, IT outsourcing services in Malaysia comprise 50% of the market, followed by business process outsourcing (BPO) services at 32% while knowledge services outsourcing (KPO) services remain in its infancy at a mere 2%. Although Malaysia has been acknowledged as one of the preferred destinations for outsourcing, the report identified key challenges and hurdles which must be overcome before it can become the preferred first choice destination.

“One of the key concerns for the outsourcing industry in Malaysia is to be able to offer high value services as opposed to highly commoditised services in IT or BPO,” said Arun Jethmalani, chief executive officer ValueNotes.

The repost states that Malaysia lacks the scalability required for high volume services due to its relatively high employee costs and small talent pool which present challenges in the availability of suitable human resources. This is compunded by the lack of alignment between the outsourcing industry and the present education curriculum, as well as the shortage in government funding which also hampers the industry's advancement.

“Despite the challenges, our research has identified a multi-pronged and focused strategy for Malaysia to capture the burgeoning global outsourcing opportunities,” said David Wong, chairmand of PIKOM and of Outsourcing Malaysia. “To sustain growth, Malaysia needs to carve its own niche that fits its strengths. For instance, Malaysia has become one of the preferred destinations to offshore services for companies in the Middle East, especially in key sectors such as oil and gas and Islamic finance, and we need to build further upon this.. More importantly, we should also focus on the strengths of our culture and language to cater to Asian markets in selected areas,” Wong explained.

The report also recommends Malaysian outsourcing companies to take advantage of the strong domestic market with capabilities in legal, engineering, manufacturing design and animation services to provide services globally and to tap into an abundant pool of accounting and finance professionals to cater to the growing demand for finance and accounting services.

The Outsourcing Malaysia and ValueNotes joint-report can be purchased from PIKOM's secretariat. Either call PIKOM at 03- 7955-2922 or e-mail Victor Low or Lisa Lee at info@outsourcingmalaysia.org.my.

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Malaysia's Outsourcing Needs to Move Away from Cost-Based Competition

Written by Aishah Mustapha

Wednesday, 26 August 2009 00:25

PETALING JAYA: Revenue from Malaysia's outsourcing industry rose 18% year-on-year to US$1.1 billion (RM3.9 billion) last year, contributing less than 1% to the country's total gross domestic product and representing a small fraction of the US$220 billion global outsourcing market.

However, the local outsourcing industry is forecast to have a 15% compounded annual growth rate over the next five years, which will bring total revenue to US$1.9 billion by 2013.

In a 12-month study released by PIKOM (National ICT Association of Malaysia) together with ValueNotes Database, a business information and research company, almost 62% of the total outsourcing revenue in Malaysia came from the information TECHNOLOGY outsourcing (ITO) space, followed by business process outsourcing (BPO) at 36%.

BPO services include contact centres, sales, marketing, accounting, finance and human resource management.

Meanwhile, the high-value service of knowledge process outsourcing (KPO) is still in its infancy stage at 2%. KPO involves high-end work such as animation services and engineering design and is undertaken by a few small service providers.

The study analysed 140 service providers, both foreign and domestic players based in Malaysia, which contribute almost 80% of the total revenue and employee strength of the industry. All types of service providers are considered including captive centres, which are offshore centres of multinational corporations.
The number one challenge cited for Malaysia in the outsourcing space is the lack of scalability due to a lower population base compared with India, China and the Philippines. The number of local university graduates is around 200,000 in 2007, significantly lower than India with more than a million graduates.

Furthermore, the high employee cost in comparison to other countries in Asia Pacific poses another threat. The IMD World Competitiveness Report has ranked Malaysia fourth in terms of cost effectiveness behind the Philippines, India and Thailand.

In addition, the lack of alignment between the education system and industry needs means the talent pool is less robust. Finally, the study cited the lack of a vibrant funding landscape in terms of venture capitalist and private investments as another hindrance for service providers to grow big.
Seen in this light, the study stressed the importance of Malaysia to move away from competing on cost alone, to a talent-based model.

By leveraging on existing strength in Islamic finance, engineering, and oil and gas sector, it can grow its annual revenue through high-skilled services. Islamic finance can also open up new markets in the Middle East as well as Asia, which are pegged to grow a larger outsourcing market.

ValueNotes managing director Arun Jethmalani said companies were always worried about the lack of talent when outsourcing. "They might not ask about cost anymore. They want to know, can I get the best engineers? Can I get the best lawyers?" he said.

Malaysia's ICT (information and communications technology) spending is higher this year than other emerging markets at 2.8% of gross domestic product (GDP) compared with India (1.3% of GDP) and China (1.5% of GDP). This is close to the budget in developed countries such as the United States at 3.4% of GDP.

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Malaysia covets China’s outsourcing spot

KUALA LUMPUR: Malaysia wants to be the No 2 location worldwide for outsourcing activities, edging out China, in five year’s time, said the Multimedia Development Corporation (MDeC).

Datuk Badlisham Ghazali, MDeC chief executive officer, said the country will attain this goal by ramping up its production of knowledge workers.

Malaysia, in third place after leader India and China, has held that position for the fourth time in six years, according to global management consulting firm A.T. Kearney’s Global Services Location Index (GSLI).

According to MDeC, the total number of knowledge workers contributed by MSC Malaysia — MDeC oversees that national initiative — is 79,000. By 2010, MSC Malaysia alone will need 100,000 workers.

It is estimated that the demand for knowledge workers nationwide will far exceed that. MDeC, however, could not provide an exact figure.

To meet the goal, MDeC is collaborating with industry experts and professional outsourcing bodies to train and re-train fresh IT graduates, displaced workers and working professionals for the growing outsourcing sector.

Among its partners are Outsourcing Malaysia; Customer Relationship Management and Contact Centre Association of Malaysia; International Association of Outsourcing Professionals; and Chartered Institute of Management Accountants and Customer Operations Performance Centre.

For those seeking professional qualifications, MSC Malaysia offers training and advancement programmes under its K-Workers Development Initiatives.

These are the MSC Malaysia Undergraduate Skills Programme, MSC Malaysia Undergraduate Apprenticeship and Development Programme (an on-the job training scheme), and MSC Malaysia Graduate Trainee Programme.

Hurdle ahead

Increasing its pool of knowledge workers is a big challenge for Malaysia because China and India have a huge human-capital pool, said Joon Ooi, A.T. Kearney South-East Asia managing director.

But he believes Malaysia is headed in the right direction. “The process of increasing the talent pool has already begun and will create a virtuous cycle,” he said.

“As more companies outsource their services to Malaysia, more relevant resources will be trained and developed, and thus increase the human capital pool. This will in turn attract more companies and so on.”

Delesh Kumar, ICT (information and communications technology) director at Frost & Sullivan, said that besides being taught technical skills, knowledge workers should also be taught soft skills, such as communication, which are currently lacking.

“We are competing with countries like India and the Philippines and their people’s command of English and communication skills are better than ours. We need to beef up our skills in these areas,” he said.

“Presentation skills, public speaking and people management skills need to be inculcated from a young age at primary and secondary school levels.”

Delesh said the development of a more industry-relevant workforce can also be done via the existing vocational school system, whereby they can help create a pool of technology-specific talents.

“Vocational schools are more focused on manufacturing-related jobs and this should change,” he added.

Multicultural edge

Badlisham said the availability of skilled workers, competitive costs and an ideal business environment are the reasons why companies choose Malaysia for shared services, outsourcing and offshoring activities.

He believes that Malaysia’s multicultural traits are a strong selling point. “Many multinationals continuously praise our workforce’s versatility and adaptability.

“These companies are already one step ahead thanks to our readily available pool of skilled workers who are also multilingual,” he said.

The outsourcing industry is the biggest contributor to MSC Malaysia’s revenue, accounting for RM5.3bil (31.2%) in 2007.

According to MDeC, Malaysia continues to attract outsourcing jobs from high-profile companies, such as US-based hard disk manufacturer Seagate Technology Ltd, which began outsourcing its IT services in May and Australian mining giant BHP Billiton that began outsourcing its financing operations late last year.

A.T. Kearney’s GSLI, released bi-annually, ranks the top 50 countries for outsourcing activities, including IT services and support, contact centres and backoffice support. The ranking is based on financial cost, people skills and business environments.

http://techcentral.my/

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