Wednesday July 25, 2012
EPP2 on track to meet 8,000 new jobs target
By NG BEI SHAN
PUTRAJAYA: The entry point project 2 (EPP2) of the business services National Key Economic Area is on track to meet the target of creating 8,000 new jobs in the shared services and outsourcing (SSO) sub-sector for this year despite the global economic uncertainties.
EPP2, which is aimed at building globally-competitive outsourcers, is led by Multimedia Development Corp (MDeC) and Outsourcing Malaysia, a chapter of the National ICT Association of Malaysia, and Malaysian Administrative Modernisation and Management Planning Unit.
The initiative saw a total of 2,210 new jobs created and over RM318mil in export revenue for the first quarter of 2012. This represents a 50.2% jump in number of jobs and 9% increase in exports compared with last year.
MDeC chief executive officer Datuk Badlisham Ghazali said the target was realistic as the focus of the shared services and outsourcing provided was based on quality and not quantity.
“It is manageable in terms of growth. We are very focused and we have skilled employees in the oil and gas, finance, Islamic banking and logistic supply chain sectors,” he told StarBiz.
He said MDeC was working with OM to help the industry to move up in the value chain by providing value-added services.
“This is backed by growth of domestic players to secure more global work, re-investment from existing multinational companies and attracting new multinational companies to invest in the country,” he said.
Malaysia is ranked No. 3 in A.T. Kearney's Global Services Location Index for shared services and outsourcing, two places behind India and China.
“We can't compare with these countries in terms of population but we have our own niches,” he added.
He also said the team had proposed to government-linked companies to outsource some of the non-core activities to private outsourcing companies in order to increase their competitiveness and build confidence in the industry.
MDeC director (global sourcing cluster division) Michael Warren said Malaysia had seen a 32% growth in specific sectors of SSO compared with 23% two years ago.
He said the SSO growth was between 5% and 6% globally, and 18% in Asia-Pacific annually.
The financial services, oil and gas, and logistic and transportation sectors are the main contributors to the growth in SSO.
The three major outsourcing companies can be categorised into information technology outsourcing, business process outsourcing and knowledge process outsourcing.
In terms of services, he said different economic zones in the country had different targets.
For instance, 75% of the information technology shared services were concentrated in Cyberjaya and Klang Valley. The Eastern Corridor Economic Region focused on the oil and gas sector and agricultural activities while Penang attracted electronic manufacturers. In Sabah and Sarawak, the focus was on biotechnology and green technology services.
“Most of the shared services are concentrated in the Klang Valley and Northern Corridor Economic Region. However, we do see growth in Iskandar Malaysia in Johor due to its proximity to Singapore.
“Malaysia remains a preferred outsourcing hub due to political stability, human resource supply, language capability and culture flexibility,” he said.