Malaysia Highlights Shared Services And Outsourcing Expertise As Frost & Sullivan Announces Establishment Of Global Innovation Centre

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Malaysia has reaffirmed its credentials as a major global centre for shared services and outsourcing.

“Malaysia offers multinational companies looking to offshore and outsource key business functions a unique combination of world-class infrastructure, low costs, and a young, talented, multilingual white collar workforce".

Malaysia has reaffirmed its credentials as a major global centre for shared services and outsourcing with the announcement from leading analyst firm Frost & Sullivan that it intends to set up a global innovation centre in Malaysia to drive global business growth over the next decade.

The centre expects to employ 830 people by 2020, and will develop the company’s thought leadership and intellectual property programmes, ensuring that it operates at best practice level.

"We believe that the establishment of this global innovation centre in Malaysia will gain us competitive advantage in our business globally. We aim to develop and deliver capabilities that assist in driving growth, innovation and leadership for our local and global clients," said Manoj Menon, Frost & Sullivan partner and managing director for Asia-Pacific.

Over the past two decades, Malaysia has established itself as a leading player in the shared services and outsourcing industry, with AT Kearney ranking the country for the past eight years as the world’s third most popular global services location after China and India. Over 200 multinational companies have chosen Malaysia as their shared services location. These companies include BMW, BP, Dell, DHL, GlaxoSmithKline, HSBC, IBM, Prudential and Shell.

Shell, BP and Frost & Sullivan talked about their experiences of offshoring financial and accounting services to Malaysia at a recent shared services and outsourcing event in London co-hosted by CIMA (the Chartered Institute of Management Accountants) and the Malaysian government’s development agency, MDeC. Shell has located a major Business Service Center in Cyberjaya, Malaysia, where it employs over 3,000 people engaged in providing finance, HR, customer service, contracting & procurement and IT services. BP employs 600 people in Malaysia providing accounting & financial business process services, plus tax support and IT.

Despite being much smaller than China and India, Malaysia has attracted companies of this calibre due to factors including the country’s excellent IT, communications, transport and energy infrastructure; its political and geographical stability; and its cost-effective, highly skilled workforce. This final factor in particular has been influential in attracting international investment, with Malaysia specialising in providing high value knowledge workers in areas such as finance and accounting, rather than just outsourced call centres.

This growing trend for multinational companies to offshore important business functions in countries such as Malaysia was highlighted by a recent report from IDC, “Offshore Outsourcing Service Trends – A Malaysian Perspective”. The report notes that “the decision to offshore or outsource back-end processes, specifically F&A processes, is more of a strategic decision as opposed to a simple cost metric-based one.”

The IDC report also states that, “The key reasons cited for using Malaysia as a regional hub for consolidating F&A operations were the government incentives and policies, access to modern infrastructure, the talent pool and the ICT skills and resources (hardware, software, services) readily available. The study also noted that while cost is still a key evaluation metric for Malaysia, other parameters were cited as increasingly relevant for selection as an outsourced destination. The talent pool and the number of shared services centers created an ecosystem which ensured a consistent growth in terms of value of services and the maturity and capability of individuals which are delivering the services.”

Michael Warren, Director Global Sourcing Cluster, MDeC, commented, “Malaysia offers multinational companies looking to offshore and outsource key business functions a unique combination of world-class infrastructure, low costs, and a young, talented, multilingual white collar workforce. We are rapidly transitioning from being perceived on the global stage as a developing market to becoming a nation driven by a knowledge-based economy – our expertise in the delivery of shared services and outsourcing models is a vital element in this transformation.”

About Multimedia Development Corporation (MDeC)

The Multimedia Development Corporation is a unique organisation established to direct and oversee MSC Malaysia by advising the Malaysian Government on legislation and policies, developing industry-specific practices and setting the standards for multimedia and digital operations. MDeC is also responsible for promoting MSC Malaysia locally and globally, whilst providing strategic support to MSC Malaysia status companies.

About MSC Malaysia

The Multimedia Super Corridor or MSC Malaysia is the national initiative formed by the Malaysian Government and managed by the Multimedia Development Corporation (MDeC) for the purpose of advancing the Malaysian Information and Communications Technology (ICT) industry. Established in 1996, MSC Malaysia has provided a conducive platform to build ICT companies and drive ICT adoption across the public and private sector whilst attracting participation from global ICT companies to invest and develop cutting edge digital and creative solutions in Malaysia.

For media enquiries, please contact:    

Shareena Ali                                
Seven                                 
+44 (0)207 775 5549                        
shareena.ali (at) seven.co.uk     

Vijayaratnam    
VP Corporate Affairs, MDeC
+60192000666        
vijay (at) mdec.com.my

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