GBS players Brandt International, Nityo Infotech execute M&A to accelerate capabilities

• KL to be global development hub with 10,000 specialists by end 2020
• Malaysia’s eco-system ready with synergistic growth opportunities

THE global outsourcing sector, now known as Global Business Services (GBS) to emphasise the business value of the services provided, is an integral part of the fast growing technology ecosystem. Service providers here offer clients a quick way to scale their businesses or to remove the headache of constant technology change with the accompanied cycle of having to reskill and upskill staff. A key value proposition is removing the client C-suites headache of adapting to the constant change in the tech toolkits available.

One of the challenges of the business is that the outsourcing providers themselves struggle with talent turnover. Acquisitions have long been seen as the quickest and sometimes, smartest ways to solve one’s headache, before solving the client’s.

Enter Naveen Kumar, founder & CEO of Nityo Infotech Corporation, a US headquartered IT services company. Despite being in 20 countries across the globe with 27 offices across US, Europe and Asia Pacific and with x staff, Naveen was ambitious and hungry for more.

His Nityo 2.0 vision was to build an organization of 100,000 employees globally with presence in 60 countries and targeting to be a Fortune 500 multinational within next 5 years. Naveen was ready to make the investments needed to achieve this global vision.

Over in Malaysia, and a recognized leader in GBS in the sector here, Munirah Looi, founder and CEO of Brandt International Sdn Bhd had her own big dreams. With over 750 staff primarily in Business Process Outsourcing (BPO) services and customer experience consulting, Munirah was forming plans to expand Brandt International’s footprint to Singapore, Australia, New Zealand, Indonesia, Philippines and other global markets in the west. She was looking at a workforce of 3,000 by end 2019, with a 2020 target of 5,000. Audacious targets in their own right considering it had taken Munirah 15 years to build Brandt up to its current headcount.

But on July 1st, both Munirah and Naveen gave their ambitions a big boost by coming together in an M&A that saw Nityo Infotech Services take a 49% stake in Brandt. With both companies having successfully collaborated before to offer end-to-end solutions to clients and with the founders knowing each other for 15-years, both believe now is the time for a deeper collaboration, considering Malaysia’s ripe eco-system and synergistic growth opportunities.

The new joint-venture company, Brandt Global Business Services will not only add global scalability and capability to its Malaysian and Asian operations but also expand its array of outsourcing services to include Digital Workforce Outsourcing (DWO), IT Outsourcing (ITO) and Development Operations (DevOps). Brandt International retains majority shareholding in the new company.

“We are excited to partner with Nityo Infotech with the strategic intent to grow and multiply our capabilities and expertise in this region and beyond. Our team is extremely excited to be working together to deliver even better value to the market,” Munirah tells DNA.

Naveen, who was in KL last week for the opening of the new Brandt Global Business Services office, tells DNA that he is delighted with the new journey Nityo is taking together with Brandt International and looks forward to delivering greater value and services to local, regional and global markets.

“There is great synergy between our two brands that we feel will greatly benefit our customers and employees. This merger and joint-venture further strengthens our vision to make Malaysia as one of the key global software development and outsourcing hubs on cutting edge technologies for Nityo with 10,000 software/customer experience evangelists in Malaysia by 2020.”

Some initiatives to achieve this target include programmes to enhance skills, experience, and knowledge of ICT professionals. With Industry-Academia partnership programmes, both Munirah and Naveen believe a significant contribution would be made towards the upskilling of the young graduates helping them gain “more employable new-age skill-sets”. The venture also aims to create world class infrastructure locally in addition to attracting foreign direct investments and creating local Intellectual Property.

Brandt Global Business Services will be able to expand its current service offerings from customer service, customer management, telesales and helpdesk to higher value BPO services in the areas of Customer Management Analytics, HR, Finance & Accounting and IT & Development.

Naveen, while declining to reveal the cost of the 49% stake into Brandt International, expects that Nityo’s participation ensures Brandt’s robust growth at a global scale and that “all required resources, capabilities, market access, funding etc will be supported by Nityo.”

The near term strategy is for Brandt Global Business Services to focus in the region, primarily in countries like Singapore, Australia/New Zealand, Indonesia, Philippines and thereafter to other global markets in the west. “We hope to grow the workforce in Malaysia beyond 3,000 by end 2019 and the target is to scale up to 6,000 by 2020 just for the BPO sector,” says Naveen.

About 30% will be knowledge workers, 40% to 55% will be local white collar jobs and the rest will be towards digital workforce/automation.

Munirah who will be leading the Global Business Services & CX practices for the Group declares the partnership a positive move for Malaysia. “It is very much in line with our national agenda to scale local BPO payers to go global.”

Yet for this to happen in an accelerated manner, a number of key levers need to be in place. In Malaysia, strong government rhetoric to support the GBS sector has been matched with action with a number of agencies and industry groups well established to help.

Among the key enabling government agencies and associations are, Malaysian Digital Economy Corporation (MDEC), GBS Iskandar Puteri, Outsourcing Malaysia, Pikom, Invest KL and Invest Penang, which, according to Munirah, have undertaken some key initiatives and intervention to support the industry and will continue to play a significant role under the new Malaysian leadership.

For Munirah, who is part of The Global Acceleration & Innovation Network (GAIN) program under MDEC, Brandt has been a beneficiary of GAIN’s strategy to increase the profile of its companies at the right time. She acknowledges this as well. “It is a good program incepted to catalyze the expansion of local BPO/technology SMEs that have the potential to become global players through market access, leadership, capability development, brand visibility and scale-up capital,” she says.

Acknowledging Brandt as “an unpolished gem”, Gopi Ganesalingam, MDEC’s vice president, Enterprise Development, says the agency helped Brandt by giving it higher visibility to boost her leverage during negotiations with Nityo. “We also worked with her on go-to market strategies and offered intervention and visibility to elevate the company within the ecosystem,” he shares.

With strong and clued-in government support already there, “the demand for high value skills among Malaysian companies that want to expand will make it necessary for the country to get four things absolutely right,” stresses Munirah.

• To review its policies around industry-led skills and talent development.
• Enable easy accessibility to foreign knowledge workers as an interim measure until the country is able to train and prepare local talent.
• Elevate English language competency, both written and spoken, which is vital to support this industry. As such, quick and effective measures to equip the workforce is key. For instance, Human Resource Development Fund (HRDF) needs to be utilized to support the relevant skills enhancement and as such, Munirah urges for the proper governance and policies to be designed and executed to ensure the optimization of the fund.
• Incentives and policies to support M & A initiatives in order to attract more global companies to invest in local BPO companies that can then scale competitively and compete regionally and globally, besides leveraging on operational best practices.