While the global and national economy continues to face various external pressures, the Global Business Services (“GBS” and formerly known as “Shared Services & Outsourcing Industry, SSO”) industry is likely to buck the trend and register stronger growth in 2017.
The projected growth is underpinned by various factors. These include, (but are not limited to) increasing pressure on global companies to reduce cost (in the wake of a moderating economy), the attractive incentives and infrastructure within the local GBS sector, the strong US Dollar and various geo-political developments that could potentially see companies relocate existing GBS operations to Malaysia.
According to Outsourcing Malaysia Chairman, Cheah Kok Hoong (pic), the various policies and strategies put in place over the years have created long-term value for the GBS sector.
The GBS industry was worth US$670 billion in 2014 with Asia Pacific having the largest market share, at 36% or US$240 billion. Malaysia’s GBS Sector will see a compounded annual growth rate (“CAGR”) of 10%-15% for the next five years. In 2016 alone, more than 6,000 skilled jobs were created for a total of 85,000 jobs – surpassing the target set by 2017.
“We face stiff competition from countries on a linear grid such as India and the Philippines. Outsourcing Malaysia together with the Malaysia Digital Economy Corporation (“MDEC”) and other partners have worked towards developing a comprehensive GBS eco-system with strong emphasis on supporting the needs of buyers, end-users and service providers,” said Cheah.
“We will continue to employ new ideas and means to disrupt the status quo – shifting from a “low-cost” value proposition to a high-value based service provider. We are beginning to see the fruits of our efforts. This will be more evident in 2017 – giving us an edge in 2017 despite the many challenges and stiff competition faced from other countries,” he added.
Disrupting Status Quo – Key Strategic Thrusts for 2017
Leveraging on Malaysia’s existing strengths, for 2017, Outsourcing Malaysia will continue developing a high-value based GBS sector in attracting foreign investments.
Other initiatives include the opening of Outsourcing Malaysia’s satellite office in Iskandar Malaysia (in collaboration with i2M Ventures Sdn Bhd) to support the growth of the fledgling GBS sector in the region.
“A high-value based model consists of knowledge, talent pool, top class technology enabled Infrastructure and a comprehensive legal framework on intellectual properties. It will also include access to comprehensive knowledge base, risk mitigation strategies, rapid re-engineering of key business processes and access to specific talent resources. The talent eco-system plays an important role in delivering high value to your clients by filling the gaps in talent employability for the industry. OM will be focusing on the GBS (IT, HR & Finance) training and upskilling of the workforce in this space. We look forward to forging strategic partnerships and collaboration with various agencies, public and private partnerships.”