Shared Services and Outsourcing

Malaysia has been identified by Everest Research as a key country to watch in Asia as the global sourcing market continues to evolve and grow rapidly in coming years.  As buyers implement and utilise differing sourcing models in line with their strategic direction and objectives, the in-house model continues to be a significant component of this evolution.

Shared Services & Outsourcing (SSO) represents one of the biggest shifts in corporate behaviour this millennium. Its cost-cutting efficiency speaks volumes. In 2004, *24% of executives worldwide believed SSO was “strategic” for their business. In 2011, the figure rose to 89%.

Information technology, finance & accounting, human resources and engineering services are the new weapons of competitive strategy. It’s not just labour arbitrage, and lift & shift to low-cost locations anymore. Today, the improvements come from productivity gains, automation and working capital opportunities. Support functions used to be cost centres. Today it’s about how they support the business.

Over 90% of all medium and large companies globally have adopted a shared services strategy in the last 15 years. Today, 72% of shared services organisations incorporate more than one function.

More than 5000 delivery centres now exist worldwide.

There is a rapid growth in the Asia/Pacific outsourcing market, due to three reasons:

  1. The need to consider alternate locations for delivery for service providers and businesses.
  2. Marked increase in acceptance of off-shore delivery.
  3. The need to have access to volume of skill sets which are scarce in certain markets.

*MSC Malaysia Global Business Services Book 2011