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IT industry in Malaysia expects to move beyond tradition in 2016 - Part 1

AvantiKumar | Jan. 4, 2016
The first part of a look back to 2015 as well as a look ahead to 2016 by some Malaysian ICT industry leaders including PIKOM, Outsourcing Malaysia, IDC, F-Secure, Allied Telesis, and Barracuda.

a) Individual Membership Drive
For the first time in its history, PIKOM will open and promote its membership to individuals. This is an effort in expanding and growing the association's representation of a broader segment in Malaysia. Through this approach, PIKOM will be better positioned to enhance its talent pool, increase network, while looking to bring greater awareness and understanding of how ICT can play a pivotal role in serving Corporate Malaysia.

b) C-Level Programme - Breaking the Verticals & Embracing Integration
PIKOM will specifically look to lead and host key industry leaders within Corporate Malaysia as part of the endeavour to make ICT more inclusive and appealing within the business environment. Exclusive C-level, Executive Immersion Programmes will be tailored for PIKOM members to learn, experience and explore business values, opportunities and insights in the Silicon Valley and similar technology-driven economic 'hotbeds' at international sites.

c) Rebranding Retail -  Introducing PIKOM Fair 3.0The yearly PIKOM fair will be re-invented, bringing it to a new level of excitement and relevance to include the corporate business requirements. The new and improved PIKOM Fair 3.0 will have notable differences from its conventional retail, cash and carry affair. PIKOM Fair 3.0 is a continued evolution from its initial form to exude a new level of sophistication and innovation - showcasing the trends and thought leadership that ICT will drive across the key Malaysian industries

General ICT Growth in 2016
Despite various challenges faced in the external environment, PIKOM remains cautiously optimistic that the industry will grow by 12-14 percent in 2016. The impact of GST will be less apparent as the market has adjusted and accepted it as part of the cost of doing business. Growth will come from areas such as cloud computing, Mobility, Big Data, eCommerce, online transactions and IoT etc.

Cheah Kok Hoong_OM Chairman 2016

Meanwhile, Cheah Kok Hoong (pic), the new Chairman of Outsourcing Malaysia (OM), said Malaysia's Global Business Services sector will see growth of between 10 - 15 percent in 2016. Despite the various economic and external challenges faced by Malaysia, the local Global Business Services (GBS) sector (formerly known as 'Shared Services & Outsourcing Industry, 'SSO') will continue to see strong growth and good prospects,


This is evidenced by the continuing flow of foreign direct investment and the progressive growth of the local GBS sector. The implementation of the ASEAN Economic Community (AEC) as well as forecasted growth global demand for GBS services also provides strong indications for a robust 2016. Given Malaysia's strong standing and track record as a leading GBS destination, OM is cautiously optimistic that current conditions such as the depreciated Malaysia Ringgit could work in the industry's favour in 2016.

Looking at our Global Business Services Outlook 2015 Report, which is the first ever industry report to provide a detailed analysis of the Buyer's perspective, from 2016-2019, GBS is expected to grow steadily with APAC recording an average CAGR of 5 percent per annum.

However, four selected markets - India, South Korea, Malaysia and Singapore, in particular, will record higher CAGR of 10-15 percent over the next five years.

Overall, demand will stem from the banking and financial services (BFSI), government, retail and hospitality / tourism industries. The global GBS industry stood at USD670 billion in 2014 with APAC accounting for the largest share of 36 percent at US$240 billion. Of this, Malaysia's share of the pie is comparatively small at USD4 billion, which indicates much room for growth.

However, there are also various challenges that need to be addressed. Aside from talent, which there is an acute shortage, funding is also an issue. Presently, the financial eco-system is very much focussed on start-ups and entrepreneurial ventures compared to GBS operations.  While the GBS may appear as less "sexy", the prospects and potential are just as illuminating if not more. "

 

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