This week I hosted The Alpha Grid rooftop Breakfast Club, in partnership with MDEC, at the Coq D’Argent in The City. Here I am with Michael Warren, Vice President at Malaysia Digital Economy Corporation (MDEC), one of the speakers.
The audience of finance directors and CFOs heard how global companies are working smarter with shared services and outsourcing in Asia. So, is it a land of opportunity or a political jungle?
One glance at the headlines and they’re screaming opportunity. President Obama is on a three day visit to the region, taking in the sights, meeting society and business leaders. But his overall mission during this trip is to continue to build stronger economic and security ties with Asian-Pacific allies. There is a move away from relying on China. Russia too is moving to forge closer ties with the 10 nation ASEAN – the Association of South East Asian Nations, pledging to focus on economic rather than geopolitical alliances. It is an opportunity for economic expansion.
But it isn’t all about doing deals for stuff. Or trade initiatives. Firms of all shapes and sizes have an eye on costs and efficiencies, so engaging talent, skills and services, at more competitive rates – because they are not here in the UK or the US or Germany – but in emerging economies, makes business sense.
We all know that the outsourcing trend was started by large companies which had the advantage of scale. But medium and small firms are now in on it. Manufacturers, law firms are sharing back office functions. But there is also a shift towards sharing high end technology skills and servicing. Just last week the London Stock Exchange started hiring people for a new facility in Sri Lanka to support global trading. The LSE said it aims to grow not only its technology services business, but its knowledge services business.
But where is the best value for money and talent? Where is the most business friendly place to outsource services to, allowing companies to reduce costs for often repetitive and costly services. In AT Kearney’s ranking of the world top 50 global services locations, India is still the number one country for business process outsourcing, followed by China and Malaysia, where there is real potential, according to the panel at this event.
We heard about Asia’s outsourcing potential general and the opportunity in Malaysia in particular, from MDEC’s Michael Warren. Nick Prangell, EMEA Global Business Services consulting lead at Deloitte then covered what companies are actually doing, what models are being adopted and how robotics are changing financial services. And Jan Kristiansen, senior partner and head of global consulting at Frost and Sullivan, spoke about his experiences of outsourcing and shared services in Malaysia and how having done it himself helps the firm advise clients to do the same.
It was a super session that gave interesting insight into how business practices and opportunities are changing in these fast paced, tough economic times. In short, our panelist believe that building and nurturing relationships across business functions and locations, plus adopting a global outlook can help reduce costs, gain access to new markets and help stimulate future growth.