Jul 27, 2008

Malaysia ranked 3 in global outsourcing ?

While searching for pcfair information , i found some information article at Pikom' which qoute from Bloomberg News about outsourcing in malaysia.

I put my comment in bold+italic tag

June 19 (Bloomberg) -- The outsourcing industry in Malaysia is trying to find its niche. It isn't an easy task because everyone else, from Brazil and the Czech Republic to suburban Cincinnati, is trying to do the same even Russia , Vietnam also starting to boom.

The recently released edition of the Black Book of Outsourcing, an annual state-of-the-industry report published by Clearwater, Florida-based Brown & Wilson Group, gives some clues about the hard road ahead for Malaysia.

Latin America and central and eastern Europe are witnessing tremendous growth in outsourcing, as global companies unload operations such as call centers, payroll processing, software development or technical-help desks to outside vendors.

China, the report said, is still low on customer satisfaction and will take another 10 years before emerging as a rival to India, the market leader. ---> I don't really agree on that as because they are heavy recruit more people from around the world to join them. It just matter of time.

Meanwhile, the U.S. is gaining from ``reverse outsourcing,'' the Black Book survey showed. Top Indian service providers -- such as Tata Consultancy Services Ltd. And Wipro Ltd. -- have recently boosted their North American operations.

Tata Consultancy started a 1,000-person code-writing factory in Milford, Ohio, a suburb of Cincinnati, in March. Wipro last year set up a unit in Atlanta.

Where does all this leave Malaysia, which ranked third globally, behind India and China, in consulting firm A.T. Kearney's global services location index last year?

Puzzlingly, Malaysia has so far performed below its potential. The multimedia super corridor, Malaysia's answer to Silicon Valley, has about 40,000 workers engaged in outsourcing work, compared with more than 1.5 million in India.

`Smaller Than Tier-3'

Given that Malaysia's population is just 25 million, a fairer comparison would be that the entire outsourcing industry there is ``smaller than a tier-3 Indian company,'' according to Zulfiqar Zainuddin, who works closely with outsourcing companies at Multimedia Development Corp., a government initiative to make Malaysia a competitive destination for information technology.

It has taken time, but Zulfiqar is optimistic that Malaysia is now ready to deliver the goods.

And there's no reason why it can't. Doing business in Malaysia is easy. The country's long history of openness to global trade and foreign direct investment has helped create a workforce, which although much smaller than India's or China's, is well-versed in supply-chain management, a promising area for high-value outsourcing.

A Frost & Sullivan study in November 2005 said Malaysia probably had more enterprise resource-planning professionals than any other country in the Asia-Pacific region.

New Opportunities

Besides, the government has made it very simple for vendors in the multimedia corridor to hire foreigners, clearing employment applications in just a few weeks. ----> this is only be done recent year

Some vendors have begun to exploit Malaysia's potential.

Among them is Teledirect Telecommerce Sdn., part of WPP Group Plc, the world's second-largest advertising company.

Teledirect's customer-service agents in Malaysia manage the reseller network in India, Vietnam, Cambodia and the Philippines for a large global company, which Chief Executive Officer Laurent Junique wouldn't name.

``We hire top-notch personnel, who are also multilingual,'' says Junique. ``They do a multitude of activities to grow the businesses of our client.''

Another lucrative outsourcing opportunity lies in supporting the growing Islamic banking and finance industries, in which Malaysia is something of a global leader.


The country also has a deep talent pool to serve the oil and gas industry, which has been in Malaysia for 130 years, notes Zulfiqar of Multimedia Development.

This, too, is beginning to happen, with Lysaker, Norway- based Petroleum Geo-Services ASA, the world's third-biggest surveyor of oil and natural-gas fields, setting up a data- processing center in Malaysia, its second-largest such unit after Houston.

but it also depend whether did malaysia company know how to lower down our cost to compare with them. Cost of fuel spike also effected our living expenses and company profit turnover as well.

At 2,500 ringgit ($765) a month, the starting pay for an undergraduate in Malaysia is more than double the level in India. but after 2 year they will be a big gap where malaysia 2 year experience is still around rm3k but india will be around rm 3-4k due to competitive job market in india.

That, in itself, is not an insurmountable challenge, says Scott Warner, chief operating officer at SRG Asia Pacific Sdn., which runs customer-contact centers. Throw in Malaysia's superior telecommunications infrastructure and ``we can be very competitive with our prices,'' Warner says.

Besides, wage inflation in Malaysia is much more muted than it is in India, while employee-attrition rates -- a big headache for Indian vendors -- are more manageable.

Clock Is Ticking

``Higher costs compared to India and the Philippines are our advantage,'' says Junique of Teledirect. ``We are guaranteed that no one will outsource activities that are worthless to them.''

Annual revenue will grow 30 percent until 2012, according to David Wong, chairman of industry group Outsourcing Malaysia.

``If we do not grow at 30 percent, the rest will catch up,'' says Abdul Hamid Sheikh Mohamed, executive director at Symphony House Bhd., a Malaysian information-technology company whose business processing unit prepares payrolls for clients and manages call centers.

In the crowded marketplace of services outsourcing, Malaysia's main competition isn't with India; it's with time and itself.

When you finish reading it ,maybe you will have your own comment on it please share it out with me too.

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