The global business services (GBS) industry in Malaysia is growing rapidly, and it is expected to continue to do so in the coming years. In 2022, the GBS industry in Malaysia generated US$4.95 billion in revenue. This is expected to grow to US$6.7 billion by 2025, at a compound annual growth rate (CAGR) of 6.2%. This growth is being driven by a number of factors, including the increasing adoption of digital technologies, the growing demand for shared services, and the expansion of multinational companies into Malaysia

The GBS industry in Malaysia is also becoming increasingly specialized. In the past, most GBS centers in Malaysia focused on providing basic back-office services, such as accounting and customer service. However, today, many GBS centers in Malaysia are providing more complex and specialized services, such as finance, IT, and engineering. This is due to the increasing demand for these services from multinational companies.

Digital innovation is the cornerstone for reshaping businesses, improving efficiency, changing the future of work, and making a lasting societal impact. Under the aegis of the Global Business Services Council of Malaysia (GBS Malaysia), a chapter of PIKOM, the National Tech Association of Malaysia, a pivotal panel discussion illuminated the path towards operational excellence and strategic impact in GBS through Cognitive Automation and AI Integration was held during the World Congress on Innovation & Technology 2023 in Kuching, Sarawak last month.

Anthony Devadoss, Chair, GBS Malaysia, emphasized, "Malaysia's strides in the global business services arena are a testament to our nation's commitment to excellence. Our cost-effectiveness, immense talent pool, and advanced skills have earned us the esteemed 3rd spot in Kearney’s Global Services Location Index 2023. Yet, we must remain steadfast in our pursuit of progress. Talent rejuvenation is key to our continued success."

This sentiment was echoed by Ong Chin Seong, Chairman of PIKOM, who added, "The GBS industry in Malaysia exemplifies our nation's resilience and adaptability. We are poised not only to maintain our position as a global leader but to ascend even higher by looking at high technology value outsourcing business. The future of business services resides here in Malaysia."

The panel discussion uncovered three critical facets of Malaysia's ascendancy:

a. Leadership in Global Services Location Index 2023

Malaysia's prominence on the global stage is exemplified by its 3rd place ranking in Kearney’s Global Services Location Index 2023. This distinction is attributed to Malaysia's judicious leveraging of cost-effectiveness, a substantial talent pool, and robust skills. The global business services offshoring sector is experiencing exponential growth, driven by the imperative to enhance efficiency and reduce costs. Key considerations include labour and infrastructure expenses, skills availability, business environment, and geopolitical risks. Crucially, Kearney's GSLI report underscores the pivotal role of "talent regeneration" in sustaining offshore appeal, emphasizing factors such as education system effectiveness, labour market conditions, immigration policies, government support, and digital infrastructure.

b. Premier Destination for CX Management Services

Malaysia's stellar performance in the 2023/24 GBS World Competitiveness Index solidifies its standing as a Premier Destination for Customer Experience (CX) Management services. This accolade, based on surveys conducted with global enterprise executives, places Malaysia at the forefront in Customer Lifecycle Management and Back-Office services categories. Malaysia's rise, part of a broader trend in Asia-Pacific, culminates in a remarkable second-place ranking, surpassing major players. This positions Malaysia as the prime choice for enterprises seeking excellence in CX Management services. The ascent in the Index is a testament to Malaysia's growing prominence as a preferred destination for CX Management services, underpinned by robust infrastructure, a tech-savvy workforce, and cost-effective operations.

c. GBS Malaysia Strategy Report: A Catalyst for Industry Transformation

MDEC, together with GBS Malaysia, Contact Centre Association of Malaysia & IDC, launched The Global Business Services (GBS) Malaysia Strategy Report in July 2022. This report, the first of its kind industrial study, stands as a testament to the collaborative efforts between public and private sectors, involving government and state agencies, as well as various industry stakeholders.  This publication not only serves as a national industry strategy roadmap to propel the GBS industry forward, but also strengthens investors' confidence in Malaysia. It acts as a guide for organizations transitioning from traditional business processes to digital, helping them ascend the value chain. GBS Strategy report can be downloaded at https://forms.gle/k51ouSz5HP4hHFAs9

Following the success of the panel session in Kuching, the 13th installment of the GBS Summit 2023, under the dynamic theme this year "D.I.V.E. - Digital Innovation, Value & Efficiency” was organised by GBS Malaysia in Kuala Lumpur on 26th October 2023.

Attended by 200 industry players, this conference had reinforced the critical importance of leveraging digital technologies to drive innovation. It emphasizes the pivotal role GBS plays in shaping the future of work and making a meaningful contribution to society.

The GBS Summit 2023 showcased real-world examples and expert insights, highlighting how businesses are leveraging artificial intelligence, automation, data analytics, and process optimization to enhance operational excellence and foster positive social change. The collaboration between the private sector and government institutions underscored the shared commitment to embracing digital innovation for a brighter future.

The conference highlighted that in an increasingly digital world, businesses must invest in innovation, embrace new technologies, and adapt to evolving trends. The key to success lies in utilizing digital innovation not only to drive efficiency and value creation but also to lead the way in shaping the future of work and making a societal impact.

The event also saw collaboration between the private sector and government bodies, exemplifying the collective commitment to harnessing digital innovation for a better future.

The recommended way forward for the industry involves a holistic approach that combines technology, talent, collaboration, and a strong commitment to continuous improvement. By embracing these strategies, businesses in the industry can position themselves to reach their optimum level and thrive in an ever-evolving landscape.

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This article is provided by PIKOM

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.