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Malaysia, which has been trying its fortunes in the global sourcing industry, has positioned itself as a destination for high-value services. On the back of strong government support, a skilled talent pool, sectoral expertise, first world infrastructure, and ease of travel, there has been an influx of MNCs setting up their back offices in the country in recent years.

The Malaysian IT-BPO industry is estimated to have grown  15 percent in the last five years. Enterprises are predominantly leveraging centers based in Malaysia to serve their regional operations, and in some cases as part of their global business services portfolio. Shared services centers, or global in-house centers (GICs), are also a considerable component of the market, with marquee-name companies such as AIG, GlaxoSmithKline, HSBC, Manulife, and Shell establishing their back offices in the country.



Following is a snapshot view of Malaysia’s GIC market:

  • It’s an attractive destination for multiple source markets including the United States, Europe, Asia, and the Middle East. Indeed, it is so appealing that firms such as OCBC and Pacnet, based in neighboring Singapore, have selected it for their back office delivery work

  • Financial services are the largest vertical in Malaysia in terms of scale, with more than 1,000 FTEs in a center (although typical center size is less than 500 resources.) Manufacturing and distribution and oil and gas firms also have a noticeable presence in the country

  • F&A is the dominant function, as the majority of graduates have been trained in accounting/commerce and business administration-related disciplines.

  • The majority of activity is concentrated in the government-designated MSC zone, which houses about 90 percent of the GICs in the country

So, what is Malaysia’s value proposition over credible, low-cost options such as India and the Philippines? Newer adopters of offshoring and those with mid-sized demand have a lower risk appetite and want a boutique experience. Thus, they are willing to pay a risk premium to avail themselves of differential advantages that Malaysia offers:

  • Multi-lingual competencies in Malay, English, Cantonese, Japanese, and Thai, stemming from a multi-cultural, multi-ethnic workforce

  • A strategic location in Asia, thereby forming a hub of business activity with leading MNCs with regional headquarters in the country

  • Lower costs than source markets and its Asian counterparts of Australia and Singapore

  • Strong support of organizations involved in the development of IT-BP industry, such as the Multimedia Development Corporation (MDeC), which directs and oversees Malaysia’s National ICT initiative, and Outsourcing Malaysia/PIKOM

  • Overall macro-level factors such as a strong economy, political stability, good connectivity, and a well-developed infrastructure

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