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01 March 2009

Outsourcing Malaysia

Outsourcing, according to Wikipedia (2009) is subcontracting a process, such as product design or manufacturing, to a third-party company. The decision to outsource is often made in the interest of lowering firm or making better use of time and energy costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of land, labor, capital, (information) technology and resources. Outsourcing became part of the business lexicon during the 1980s. It is essentially a division of labour.

As a fast developing country, for decades, Malaysian companies have been insourcing work, hence outsourcing the nation's resources for growing the local economy. This was highlighted among others in 2003 by an article in Computer World - "Malaysia: Success comes one park at a time":

The Malaysian government aspires to build the country of 22 million people in the image of Singapore's exceptional technology success. It has invested $10 billion in two high-tech parks -- Cyberjaya and Putrajaya -- as part of its Multimedia Super Corridor project to attract international business.

By 2006, the country formally declares its focus on outsourcing when Dato' Seri Abdullah bin Hj Ahmad Badawi, the Prime Minister of Malaysia launches "Outsourcing Malaysia" in Austin during the WITSA's WCIT 2006 event. That Outsourcing Malaysia started as an initiative chaired by Association of the Computer and Multimedia Industry of Malaysia (PIKOM), in collaboration with and with support from Multimedia Development Corporation (MDeC) and Malaysia Debt Ventures (MDV). MDeC also followed suit with its own dedicated website on Shared Services & Outsourcing a year later in 2007. These progresses were highlighted by Dian Schaffhauser, the editor and managing director of Sourcingmag.com in his article entitled "Outsourcing Malaysia: In Search of Excellence"

Not much was heard since about this initiative though, except occasional press releases in 2008 and especially during the few 'hot weeks' of WCIT 2008 in Kuala Lumpur and The Outsourcing Malaysia Conference 2008 on 11-13 November 2008, until finally this year, when the announcement for the 2009 Asia-Pacific Outsourcing Summit (as part of the Outsourcing World Summit Conference Series) came in - the Summit will be Kuala Lumpur Convention Center (KLCC) for two days starting 12th of May 2009.

It's worth nothing however, that five local companies made it the top Global Services 2008 list back in early 2008. The companies are eaCap, KOMPAKAR, Scicom, Vantage Point Consulting and SnT Global.

But, 2009 will clearly be very challenging for most economic boosting initatives as the global financial crises and an obvious recession spirals around most countries including the United States and European nations with direct effects to Malaysia as one of the hosting countries for US-based multinational companies (MNCs). In fact, just days ago, a Business Times headline adds up to the scare for the business community - "Malaysia outsourcing position could be in jeopardy", says Marina Emmanuel.

"In the past month itself, we have seen blue-chip companies that used Malaysia as an outsourcing hub migrate up to 80 per cent of their back-office operations out of the country." - Customer Relationship Management and Contact Centre Association of Malaysia (CCAM) president Leo Ariyanayakam said.
Stay tuned as we continue to look into Malaysia's Outsourcing scenes...

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