By Sumathi V Selvaretnam
Outsourcing companies in Singapore and Malaysia are banding together to boost their regional competiveness and global market share.
The strategic collaboration aims to “match-make” some 50 small and medium- sized outsourcing companies from both countries so that they can share their core competencies and win larger global contracts.
The companies met at the Raffles Hotel in Singapore earlier today to discuss business opportunities.
The initiative is being driven by the National ICT Association of Malaysia (Pikom), the Singapore Infocomm Technology Federation (SITF) and the Singapore Business Federation.
According to Pikom, the outsourcing markets in Singapore and Malaysia are worth US$1 billion and US$350 billion respectively. Three quarters of each market is dominated by global multinational customers.
Pikom chairman David Wong said that MNCs often look for larger-sized companies to entrust their outsourcing needs.
As most of the outsourcing companies in this region are small, collaborations would help them compete against global outsourcing giants like India and China, said Wong.
Bobby Varanasi, head, market and branding, Outsourcing Malaysia said that the collaboration would prevent Singapore and Malaysia from being caught in a “cost-chasing game.”
“From an economic standpoint, neither does Singapore or Malaysia want to be the cheapest of locations,” said Varanasi.
He said SMBs in both countries could leverage on high-end technology and high-value services to compete alongside China and India which focus on high volumes.
SITF sourcing chairman Charles Fan said that Singapore SMBs for example, could look out for near shoring opportunities in Malaysia to cut down on their operational costs.
A Singapore company could benefit from tax incentives if it sets up a branch office in Malaysia’s Klang Valley to support its front-office operations in Singapore, said Fan.
He said contact center, monitoring and service request facilities can be located in a near shore environment rather than a high-cost environment back home.
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