Outsourcing sector records increased revenue

PETALING JAYA: Malaysia's outsourcing sector registered a 27% increase in total revenue to RM1.59 billion in 2013 compared to RM1.25 billion in 2012, led by outsourcing opportunities and projects.
Outsourcing Malaysia, an initiative of the National ICT Association of Malaysia (PIKOM) attributed the positive growth to the government's various initiatives via the Economic Transformation Programme (ETP) and industry-wide efforts.
"There's still a lot of room for improvement as out of this RM1.59 billion in overseas revenue, only 25% is generated by local outsourcing players while the rest of the 75% is by their foreign shared services players that are based in Malaysia," said Outsourcing Malaysia's chairman David Wong.
Wong highlights that there are still many local outsourcing players which only focus on business from the local market only, rather than their global counterparts (established and operating in Malaysia) who are more keen to attract and secure foreign outsourcing business.
He said this is where Outsourcing Malaysia looks to assist small medium businesses (SME), by helping them to move up the value chain to improve their global attractiveness and their overseas income from in-bound outsourcing projects.
Wong urged local outsourcing players to move up the value chain to increase competitive edge and project-outsourcing ability to appeal to global market
He said the largest Malaysian outsourcing company employs only 5,000 staff at the most, as compared with some of the larger outsourcing companies in China and India that are made up of over 100,000 employees.
"Due to Malaysia's population size, it is impossible for Malaysia to compete in terms of volume-driven type of outsourcing projects that naturally require very large scale call centre capacities," says Wong.
"Malaysian players therefore need to start specialising their business service offerings and differentiate themselves from their Asian counterparts. They can look into sectors such as Islamic banking, healthcare, logistics, financial services where the world is constantly looking to outsource to players who can properly service these niche markets with higher sets of skills and expertise," he added.