Is Malaysia a safe option for a South East Asian business services hub?

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About three years ago I met up with Vijayaratnam Tharumartnam who is a director at the Malaysian IT Initiative (MSC), an organisation supporting Malaysia in attracting foreign investment.

I met him again earlier this month for an update.

With more and more multi-national businesses investing in global service delivery capabilities South East Asia is a region where a presence is essential.

There are options in the region with countries like China and the Philippines already supporting companies from Europe and the US with IT and business services.

And the MSC is going out of its way to attract business investment. In 1996 the Malaysian government kicked of the IT initiative as part of its economic transformation. Malaysia wants to be a high income nation by 2020 and IT services have a significant role to play. The nation already has quite a strong telco sector but wants its IT sector to grow.

It is already been successful and has moved from largely providing back-office services to moving up the IT services value chain.

Businesses like GlaxoSmithKline, Shell, BP, HSBC, Prudential Services, RBS, British American Tobacco and BT have operations there.

Since its creation MSC has created about 140,000 jobs.

Tharumartnam told me that Malaysia is a safe place to invest compared to China, which he described as a "muddy road." He said Malaysia is politically stable and does not suffer from natural disasters.

If that is not enough the country does not ask questions about the funding of investors, has relaxed visa rules so companies can bring staff in as they like, it also offers five years tax free and allows the business to 100% own their Malaysia operations.

Tharumartnam says that the Malaysian IR T sector has gone from being an industry worth nothing in 1998 to one with revenues of $10bn today.

Although a great deal of the IT sector is owned by multi-nationals from Western countries the expertise gained within Malaysia has led to the creation of local service providers.

Here is what some of the multinationals are doing in Malaysia

BP

-BP Business Service Centre Asia
Established 2009
Operates a BPO and IT Outsourcing operations
Global Players in MSC Malaysia
-BP Business Solutions
Established 2004
Research and development of software and IT systems for the healthcare industry.

HSBC

-HSBC Global Resourcing UK Limited
Established 2007
A knowledge process outsourcing centre that provisions of management and operational support for HSBC Group Service Centres worldwide.
Global Players in MSC Malaysia

-HSBC Electronic Data Processing (Malaysia)
Established 2002
A Group Service Centre (GSC) for HSBC Group which operate as a financial services processing centre, service centre, call centre and also as a contingency centre for other GSCs of HSBC Group around the world

-HSBC Software Development (Malaysia)
Established 2009
Global Players in MSC Malaysia
Information Technology Outsourcing (ITO) in software development, software deployment , software support as well as consultancy and project management

Prudential


-Prudential Services Asia
Established 2003

Regional IT processing centre, regional data centre, regional shared services centre and regional customer call centre for Prudential Group in Asia.

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This page contains a single entry by Karl Flinders published on July 16, 2014 3:19 PM.

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