Outsourcing Practices In Malaysia: A SWOT Analysis On The ICT Industry

Abstract

In the last decade, outsourcing has emerged as an important tool for enabling business around the world to gain full benefit. As Malaysia develops, the businesses must keep pace with changes that are occurring. Outsourcing initiatives are intended to increase the efficiency and effectiveness of the business processes as well as IT performance. The rethinking of business strategies to develop and exploit core competencies, set the outsourcing bandwagon rolling. It seeks to improve the quality, cost efficiency and seize of competitive advantage. This paper discusses the potential of Malaysia as a global player for ICT outsourcing. The paper focuses on SWOT analysis of ICT outsourcing in Malaysia. This paper identifies current situations in Malaysia and discuss further with the analysis on strength, weaknesses, opportunity and threats which will give effect to the businesses and society at large. No significant study has been carried out on analyzing the ICT outsourcing industry’s potential in Malaysia. This is an emerging industry that Malaysian companies can focus on by leveraging on thier strengths and avoiding the threats within the overall ICT outsourcing foray. The lack of studies and the potential of this industry in Malaysia, motivate the authors to write about this topic. Our findings suggests that, Malaysia has the strength of becoming world player in ICT outsourcing because sufficient infrastructure, strategic position of Malaysia and English language is widely spoken. These are the plus points of Malaysia to further excel as the provider of ICT outsourcing. On the other hand, the weaknesses that need to overcome is the low level of ereadiness in the world ranking. Political will and links with Middle East, China and India are the opportunities for Malaysia to laverage on its strength. However, Malaysia also need to avoid the threats such as slowly loosing competitive edge to lower cost producers namely Vietnam and China. Finally, our paper concludes with some options to enhance the capabilities of Malaysia as ICT outsourcing provider.