Outsourcing Malaysia: GBS industry needs to disrupt or be disrupted

• GBS Industry needs to be prepared for disruption on all fronts
• Initiatives by MDEC and Iskandar will open more opportunities for GBS industry

THIS year’s Smart Sourcing Summit organised by Outsourcing Malaysia considered the subject of disruption within the realm of the Global Business Services (GBS) industry.

“Disruption is the new name of the game. You can either be a disruptor or the one who is being disrupted. Which would you rather be?” asked Outsourcing Malaysia chairman Cheah Kok Hoong in his opening speech.

“Organisations have to learn to think like disruptors and invest in innovation. They need to look at finding better ways of carrying out internal processes instead of making incremental improvements,” he said.

Indeed, if an existing business process is not good enough then perhaps it is time to disrupt and change it.

Challenging the status quo
As Emerio Malaysia managing director Michael Warren noted during his panel session on the topic of disruptive transformation and business opportunities, no company is safe from disruption.

This even includes established companies such as consulting firm Frost & Sullivan which has been discussing disruption and its imminent arrival.

The irony is that they themselves are facing disruption from big data analytics as well smaller and more nimble research firms in India. To keep up with the ever-changing market they too have to adjust their service offerings.

“We are now moving away from just providing analogue-based advisory services to offering knowledge as a service that provides in-depth understanding of various industries,” said Frost & Sullivan Malaysia managing director and senior vice president Hazmi Yusof.

One would think that sticking with a big company is a safe bet. After all, they have the resources and access to innovation and technology. Very often they would push out smaller competing companies.

However, that is not the case today. Hazmi said that companies are now grappling with the idea of the democratisation of technology.

“As a startup you have the same access to information and technology as any big company be it  about the market, competitiveness or business intelligence,” he said.
This completely resets the board and levels the playing field for all companies in the market.

Sometimes disruption comes not in the form of processes or competition but from the very people that make up an organisation.

TATA Consulting Services Malaysia country head Jeevan Rajoo explained how it had brought on board younger IT consultants, many of whom did not agree with existing Human Resource policies and protocols.

It addressed the gripes of its young workforce by introducing an internal company social network that functioned as a collaborative platform where employees could share thoughts, ask questions and work together.

“We realised that the power of collaboration was very important so we applied elements of gamification to the platform so they would be awarded points that upgraded their status in the platform. Overall, this approach has worked really well with our team,” Jeevan explained.

Iskandar to attract GBS players
Malaysia’s largest special economic zone, Iskandar is positioning itself to be the next ideal location for GBS shared services centres.

i2M Ventures, a wholly owned subsidiary of Khazanah Nasional, the Malaysian government’s investment arm, aims to encourage more businesses to locate their GBS operations to Iskandar Puteri.

Its managing director Zulfiqar Zainuddin explains that GBS will be a newly-promoted sector in the region, whereby companies would be offered incentives that include tax holidays, infrastructure performance guarantees and personal income tax breaks.

“Iskandar’s proximity to Singapore’s CBS offers opportunities to companies with regional or global headquarters in Singapore. The addition of the GBS sector in Iskandar will make it even more attractive to companies looking for cost advantages,” he said.

Growing beyond MSC
Malaysia Digital Economy Corporation (MDEC) head of global business services Shibu Vadaketh believes that startups who are disruptors, complement the GBS industry.

“As more disruptors enter the market, these startups often want to grow rapidly but lack the cash flow. They would then have to work with the GBS industry in order to grow,” he said.

MDEC said it has several initiatives that would benefit the GBS industry such as the Digital Maker Movement that aims to address the talent pool shortage in Malaysia by introducing subjects like computer science to students.

Starting in 2017, computer science concepts will be introduced in primary schools while computer science programmes will be introduced in secondary schools.

On top of the existing Multimedia Super Corridor (MSC) certified zones and buildings, there will be a new category of certified locations called Malaysia Digital Hubs that will cater for startups.

Though most of the details surrounding the new Digital Hubs are still being discussed, what is known is that these locations will offer facilities like high-speed Internet connections as well as mentoring and coaching services.

“One thing different about the Malaysian Digital Hubs is that they will implement hot-desking so it is not strictly meant for large companies,” Shibu spoke of the popular practice where desks are allocated to workers on a rotating system instead of each worker having their own desk.

The inclusion of these hubs will no doubt add greater flexibility and allow GBS companies to operate in non-MSC zones in the near future.
 

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