How Malaysia Helps To Future Proof Your Business Services Operations

The digitalization of Global Business Services (GBS) was the main highlight recently when my team and I had the privilege of co-hosting more than 40 GBS business services companies, together with Outsourcing Malaysia (OM), a chapter of PIKOM, the country’s national ICT industry association, at the GBS Focus Group forum held in Kuala Lumpur. 

GBS is an abbreviation for shared services and outsourcing enabled operating model, is an important focus for Malaysia, especially as one of our key initiatives is to strengthen our country’s position as an ideal location of choice for digital services.

To help drive positioning, MDEC in 2011 initiated The GBS Focus Group initiative, which is a platform ‘for the industry by the industry.’

Caption: The GBS Focus Group consists of relevant stakeholders to the GBS industry in Malaysia, i.e. captive shared services, government agencies, industry association, professional bodies and academia.

The forum’s topic – the Digitalisation of GBS – is very close to my heart. In fact, I am heartened by SSON’s 2019 State of the Shared Services Market Report on Malaysia, which mentions that about half of the GBS centres in Malaysia are leveraging on Centres of Excellence (COEs), and shifting away from being just about transactional excellence and improvement.

Now, GBS is fast becoming a value adding partner to the business by offering insights based on thorough understanding of services delivered, optimized by digital technology such as automation and data analytics.

Ascending the value chain

Take Jabil, a US-based global manufacturing services as an example. They first set up their Global IT Services in 2009 in Penang, and 10 years later, they have expanded into a global business centre, spearheading digital transformation within the group with an impressive setup of COEs for Robotics Process Automation, API Management, B2B Services and Cloud Management.

The Penang GBS operation has ascended the value chain by moving from transactional to more strategic consulting and advisory roles that include global finance, centralised procurement and risk governance.

Capitalising on Malaysia’s quality talent (95% of their 950+ employees are Malaysian), they have ventured into data analytics and Factory of the Future initiatives, as well as investing in emerging technologies such as hybrid cloud computing, internet of things, edge computing, next-generation network, predictive analytics and artificial intelligence.

Caption: The GBS Focus Group is chaired by a GBS practitioner, supported by OM as the group secretariat. Immediate past chairman: DHL IT Services. Current chairman: Jabil Global Business Center.

Malaysia’s digital ecosystem: futureproofing business

The Jabil story is strong testament of Malaysia’s capabilities to move up the value chain in digital services.

To ensure that companies such as these continue to augment and accelerate their growth in Malaysia, MDEC is constantly strive to provide the industry with strategic and innovative initiatives, from talent to infrastructure to legal framework, to ensure that the country has a strong and robust ecosystem to meet the growing demand from investors such as Jabil.

Through our digital innovation ecosystem initiatives, we have setup ASEAN Data Analytics eXchange (ADAX), Asia Cybersecurity eXchange (AsiaCyberX) and Orbit, to further spur the growth of data analytics, cybersecurity and fintech respectively, in Malaysia.

 These initiatives focus on building and facilitating skilled digital workforce, as well as creating innovative solutions, increasing technology adoption and building a thriving tech startup ecosystem. We also play an advocacy role in ensuring that Malaysia has supportive government policies, such as national frameworks on big data analytics, artificial intelligence, internet of things, and eCommerce, to move the nation forward towards becoming a leading regional and global player in these areas.

Digitalisation of GBS: Move Up or Move Out

Among the topics discussed during the GBS Focus Group event that I mentioned earlier was on “GBS Moving Forward: Move Up or Move Out”.

The audience expounded the sentiment that as the world rushes headlong into the digitalized era, digitalisation and the holistic support structure that Malaysia offers is the key to futureproofing their operations here.

Digital services is a key sector in driving Malaysia’s digital economy agenda. As the country deepens our niche in digital economy, Malaysia is the right location with the right ecosystem to catalyse a business’ digital transformation.

No matter where you are in your digitalisation journey, it is our focus to encourage more GBS companies to drive transformational excellence and value for your business operations by embracing disruptive technologies such as big data analytics, automation, artificial intelligence and blockchain.

As the Head of the Investment team in MDEC, I welcome you to come talk to me and my team members to learn more about how you can leverage on Malaysia to futureproof your digital services operations.

Hew Wee Choong is the Vice President for Investment & Industry Development, at Malaysia Digital Economy Corporation (MDEC)

The Perfect ‘Storm’: Malaysia as World’s Most Ideal Location for Digital Services

It seems only a moment ago that we were all counting down the seconds to welcome in 2019, closely followed of course by Chinese New Year!

The close of 2018 saw the unveiling of Malaysia’s Industry 4WRD Policy – which has been designed to speed Malaysia into the digital age with an especial focus on our manufacturing sector.

It’s an open secret that our manufacturing sector remains a key economic pillar of Malaysia contributing more than 22 percent of GDP [Gross Domestic Product]. At MDEC, we see this policy as a prelude to even more exciting milestones that lie ahead for Malaysia’s Digital Economy in 2019. 

Investor Confidence

Investor interest in Malaysia’s Digital Economy continues to grow in the areas of Artificial Intelligence (AI), Big Data Analytics (BDA), Internet of Things (IoT) and cybersecurity.

We are seeing a surge of new accelerators and venture builders from abroad, which symbolises a healthy thumbs up for our nation’s startup ecosystem. This surge includes Lumenlabs (Insurtech) and Future Labs (AI and BDA). In fact, in the area of AI alone, Malaysia already is home to a healthy number of 70 startups – and growing rapidly.

As part of Malaysia’s digital transformation strategy, verticals such as healthcare, education and agriculture will be prioritised in order to speed up our rate of digital transformation. In the light of this, the Investment team will be on the lookout for innovative technology companies from abroad to spawn new opportunities in these sectors.

Healthy Confluence

As Head of the Investment team at MDEC, I see a recipe coming to the boil featuring a healthy confluence of vital ingredients: talent, capital and markets right here in Malaysia. In my ongoing engagement with many captains of industry – spanning the banking, oil and gas, consulting, technology and pharmaceuticals sectors, a common thread is emerging. And this is the tremendous power and potential of data. To use what is fast becoming a cliché, data truly is the oil of our rapidly dawning future economy.

As a result of Malaysia’s long-standing recognition as one of the world’s best locations for Digital Services, we are now poised to attract the capital, the markets and capabilities of large multinationals with nimble and innovative startups to generate the perfect “storm.” 

Key Digital Investment Hub

Despite the fragile global economy – with some MNCs revising their business models – Malaysia continues to be an attractive location for expansion of digital services. 

Indeed, another recent exciting instance of Malaysia’s attractiveness is the forthcoming expansion of the Shell Business Service Center, which has been operating in Cyberjaya for almost 20 years. 

By leveraging on Malaysia’s increasingly agile and versatile talent base, Shell has made another strategic move by bringing additional value adding activities to its Malaysia centre. With the transformation of the centre into a high performing competitive business operations hub, Malaysia is now the global hub for the Shell Group.

Powered by big data analytics, Shell’s Cyberjaya hub offers a wide portfolio of services, which goes beyond IT, finance, contracting & procurement functions, and now includes new, unique digital services such as legal, Retail Center of Excellence, Creative Solutions, and regional Human Resource Advisory Operations. Moving ahead, Shell will be providing more services from its Malaysia hub.

This translates into the creation of even more higher value jobs in Malaysia, which is in line with Malaysia’s aspiration to become a key regional digital investment hub.

More to come

As a teaser of things to come, MDEC is currently working on a national A.I. strategy that will provide a powerful platform to fuel this “storm.” 

On a related note, Malaysia’s continuous efforts in improving the ease of doing business is reflected in our international rankings considerably – we jumped 9 spots in World Bank’s 2019 Doing Business Report

On top of this, Malaysia’s global talent ranking according to IMD jumped 6 spots in 2018, even ahead of UK, France and Japan.

In closing, I am pleased to share that Malaysia will be playing host once again to the World Congress of Information Technology (WCIT) in 2020. Malaysia first graced the global stage at WCIT 2008 in Kuala Lumpur with luminaries such as Craig Venter, who led the world’s first draft of the human genome, and Bill Gates (who appeared as a holograph).  

Stay tuned for more updates: We are all looking forward to an exciting 2019 – so let me close by wishing everybody a great year ahead! 

Hew Wee Chong is the Vice President for Investment & Industry Development, at Malaysia Digital Economy Corporation (MDEC)

Malaysia: Gateway to the Fastest Growing Region in the World

As the ASEAN region continues to boom, investment opportunities in the region have become even more alluring.

However, the cultural complexities of the countries within ASEAN add to the challenges of forming a sound investment strategy. Understanding the big picture includes taking into consideration various factors such as the economics of a country’s Gross National Income (GNI), social landscape, state of digital adoption and talent resources.

So, what would be one of the most attractive investment destinations in the ASEAN region today? Which country would best leverage your investment and deliver significant growth for you?

Not only one of the most visited tourist locations in the world, Malaysia also boasts an economic ecosystem offering a rich ground for investment considerations. Located at the heart of ASEAN, the country is an ideal and cost-effective gateway to access the region’s population base of 640 million with a collective Gross Domestic Product (GDP) of US$2.5 trillion. With strong economic fundamentals, the World Bank anticipates Malaysia to become a high-income nation as early as the year 2020.

One of the fastest growing sectors in Malaysia is its digital economy, which consistently continues to be on upward trajectory and accelerates the country’s economic development.

Digital Economy: A Catalyst for Dynamic Growth

Malaysia’s digital economy development is impressive. In 2016, the digital economy contributed 18.2% (RM224 billion, or at current exchange rate, US$54 billion) to Malaysia’s economy, as indicated by Department of Statistics Malaysia. The contribution to the country’s total GDP comes from the digital industry (RM149.4 billion /US$36 billion) and the eCommerce industry (RM74.6 billion/US$18 billion). The digital industry continues to focus on exports (RM216.9 billion/US$52.23 billion); and employs more than 1.07 million people.

This growth seen by Malaysia is a result of its forward-looking vision on driving itself into becoming a highly productive economy through digital transformation. Various government agencies and ministries work in collaboration with the industry to drive digital transformation. Under the Ministry of Communications & Multimedia, Malaysia Digital Economy Corporation (MDEC) is the lead agency responsible for helping to chart a path for the holistic development of the nation’s digital economy. MDEC’s implementation efforts are centred on four strategic pillars – driving investments, building local tech champions to regional and global markets, catalysing digital innovation ecosystems to nurture start-ups and propagating digital inclusivity among its citizens.

Wooing Foreign Direct Investment

Malaysia has been at the forefront of foreign direct investment and these investments came from various parts of the world such as US, UK, Netherlands, Singapore, Germany, China, India, Australia, and Japan. Global corporations and hyper growth technology companies have been attracted to the conduciveness of setting up businesses in Malaysia. These companies have invested, and continue to invest, in technology and platform, digital and global business services as well as digital content development, to expand these services regionally and globally from Malaysia as their hub.

Malaysia’s position as a favoured country for digital investment has been recognized by its consistent 3rd ranking (behind world giants India and China) in AT Kearney’s Global Services Location Index since the ranking’s inception in 2004.

To ensure that Malaysia continues to attract foreign direct investment, various digital initiatives that fuel investment opportunities have been developed and implemented, including a number of high impact national programmes.  For example, to keep abreast of the Fourth Industrial Revolution, new frameworks are being developed under Malaysia’s Digital Economy plan focusing on Big Data Analytics, eCommerce and Internet of Things (IoT), offering massive growth potential.

In 2018, Malaysia started to promote the adoption and application of Artificial Intelligence (AI) technologies. With the objectives of maximising social and economic benefits, Malaysia is accelerating AI development across three key areas: Talent; Industry Development; and High Impact Use Cases in the areas of smart cities and smart manufacturing, resting on a foundation of progressive regulatory framework.

Another example is the Digital Free Trade Zone (DFTZ) – the world’s first outside of China that aims to capitalise on the exponential growth of the internet economy and cross-border eCommerce. Established to streamline and augment Malaysia’s constantly growing eCommerce space, this platform will also boost cross-border trade and position Malaysia as a transhipment hub for eCommerce logistics.

A thriving digital ecosystem

Malaysia is constantly looking at initiatives to transform its human capital infrastructure to be ready for the Fourth Industrial Revolution. Coupled with its proficiency in languages including English and other Asian languages such as Japanese, Korean, Mandarin, Bahasa, Hindi, Arabic and others, as well as the investment in the hard infrastructure of roads, railways, ports and high-speed internet connectivity, this has undoubtedly been the major attraction for enterprises to expand their operations in Malaysia.

With its diverse multilingual and multicultural population, Malaysia offers a conducive business environment through its unique cultural diversity, making integration of local talent to be part of the global workforce a seamless experience to many global multinationals and unicorns.

The government of Malaysia also places a major emphasis on talent development for the future of work, focusing from primary to tertiary education. MDEC is supporting the Ministry of Education’s efforts to integrate computational thinking including coding and other digital making activities into the national school syllabus. Another core initiative is a joint public-private-academia collaboration to strengthen tertiary-level digital technology curricula and teaching.

These efforts have already seen results and international recognition. Malaysia is 2nd in ASEAN in the Digital Evolution Index 2017; 5th in Asia in the Huawei Global Connectivity Index 2018; 6th in Asia for the Networked Readiness Index 2016 and the Asian Digital Transformation Index 2018; 7th in Asia in the ICT Development Index 2017; and 8th in Asia for the Cloud Readiness Index 2018. Its tech savvy population was also recognised by a 2016 Thomson Reuters Foundation poll, which ranked Malaysia the 9th best place to be a social entrepreneur in the world.

As of now, thousands of companies from 60 nations have already cast their anchors in Malaysia. Do not miss out on your opportunity to expand from Malaysia to Asia and the world!

Hew Wee Choong is the Vice President for Investment and Industry Development in MDEC.

© 2017 Malaysia Digital Economy Corporation Sdn Bhd (389346-D). All rights reserved.