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OM aims at 10.2% growth

May 6, 2013

By Farah Adilla

PETALING JAYA: Outsourcing Malaysia (OM) is aiming at a 10.2% increase in its overseas sales revenue obtained by Malaysian outsourcing companies involved in the government’s Entry Point Project 2 in 2013.

This will translate into sales worth RM1.38 billion from the RM1.25 billion achieved in 2012. OM chairman David Wong Nan Fay (photo) said this is based on the growing demand for outsourcing solutions which helps companies to cut operation costs, provide access to good talent and focus on core business.

“For the past few years OM, together with Multimedia Development Corp [MDeC] and the Performance Management Delivery Unit (Pemandu), have been educating companies about the opportunities of outsourcing. The growing demand had actually reflected on the performance of these local companies in 2012,” he told The Malaysian Reserve in an interview recently.

Some major local outsourcing players include Dataprep Holdings Bhd, Basis Bay Sdn Bhd, Cuscapi Bhd, SnT and Mesiniaga Bhd.

In 2012, the oversea sales revenue from local outsourcing players had actually exceeded OM’s target of RM1.01 billion.

Beside that, OM also started to focus on the domestic sales revenue where it stated its first ever target of RM1.63 billion for 2013.

“This is the new area that we are looking at as we are aware of the domestic opportunities from the government, large corporates and government-linked companies,” he said.

For example, Wong said big companies such as Sunway Bhd and Sime Darby Bhd have plans to set up an in-house shared service for their payroll, accounting and IT solutions. But these companies also have their plans to outsource these services.

“In view of cutting operations cost and enabling them to focus on their core business, they should consider outsourcing as one of their solutions. If someone else can provide these solutions cheaper and better, outsource is the solution,” he added.

For the bigger picture, in February, OM has projected the local outsourcing sector to grow to a RM7.15 billion in 2015 from the current revenue of RM5 billion in 2013 based on the current track record and initiatives planned moving forward. This target includes the overseas outsourcing companies doing business in Malaysia.

Wong said in one of OM’s five-year plan, the association plans on moving up the value chain by going deeper into some vertical or some specialised sectors.

“We hope to be able to have at least two or three key sectors identified as our strength. Our goal by 2015 is to be among the top ten in the industry,” he said.

He said the new areas which OM sees strong potential are Islamic banking, oil and gas and financial services.

This content is provided by FMT content partner The Malaysian Reserve.


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