South East Asia - The Sleeping Outsourcinig Giant?


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The inaugural Asia Pacific Outsourcing Summit in KL April 2009.

Presentation of South East Asia as the growing giant for outsourcing and offshoring

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South East Asia - The Sleeping Outsourcinig Giant?

  1. 1. The 2009 Asia-Pacific Outsourcing Summit Conference & Exposition May 12-13, 2009 Kuala Lumpur Convention Center Kuala Lumpur, Malaysia
  2. 2. The 2009 Asia-Pacific Outsourcing Summit Rob Cayzer, Director – Business and Market Development, MDeC Malaysia Rob has worked in ICT, outsourcing, communications and digital media field for over 22 years specialising in economic development, marketing, strategy, MIS management to software engineering. He was creator and implementer of MSC Malaysia’s Shared Services and Outsourcing (SSO) programme and founding co-chairman of Outsourcing Malaysia
  3. 3. Content 1. Global Crisis and Sourcing 2. The Six Piston Engine 3. Playground for Giants 4. Question Time: Demand vs Supply 5. Job Migration vs Job Creation 6. Space for Local Players? 7. SEA: A market for demand or supply? 8. Call to Action
  4. 4. Global Crisis and Sourcing
  5. 5. Global Crisis and Sourcing Outsourcing Players are outperforming the market
  6. 6. Global Crisis and Sourcing CSC, IBM: c.200% market performance NASSOM projects creation of 200,000 jobs this year
  7. 7. Global Crisis and Sourcing Outsourcing outperforming most technology players
  8. 8. Global Crisis and Sourcing Google, an exception
  9. 9. *Outsourcing Market est The V6 Engine •GDP: USD 1,300 bil •GDP: USD 1,500 bil •Market: USD 13 bil •Market: USD 15 bil •Supply: 130 mil ppl •Supply: 150 mil ppl •GDP: USD 3,300 bil •GDP: 500 bil •Market: USD 55 bil •Market: USD 10 bil •Supply: 159 mil ppl •Population: 260 mii •GDP: USD 4,200 bil •GDP: USD 773 bil •Market*: USD 250 bil •Market: USD 20 bil
  10. 10. South East Asia
  11. 11. Indonesia: “Illinois” of SEA Key cities: •Jakarta ·Surabaya •Bali ·Bandung 250 mil people
  12. 12. Indonesia Jakarta Population: 23 mil Industries: Finance, Manuf, Energy, Gov Education: 250 IHLs, 500,000 uni grads pa IHL medium is English Graduate Salary: USD 3,000 pa Surabaya: Port City Population: 7 mil Industries: Transportation, Distribution Education: 250 IHLs, 200,000 uni grads pa Graduate Salary: USD 2,000 pa
  13. 13. Indonesia Bandung: Education city Population: 7 mil (fastest growing city) Industries: Tourism, Edu, Creative, Tech Education: 16+ Unis, 50 IHLs, 250k grads Graduate Salary: USD 2,000 pa Medan: Cosmopolitan City Population: 3 mil, multi-ethnic Industries: Petro-gas, Agriculture Education: 80 IHLs Graduate Salary: USD 2,000 pa
  14. 14. Malaysia: “Texas” of SEA Key cities: •Klang Valley ·Penang •Johor 25 mil people
  15. 15. Malaysia Klang Valley: Truly Asia Population: 7 mil, Asian culture melting pot Industries: Manuf, Energy, Tech, Fin, Gov Education: 250 IHLs, 100,000+ uni grad pa Graduate Salary: USD 6,600 pa Majority of demand and supply of services Penang: Technology Hub Population: 1.5 mil Industries: Manuf, Tech, Distribution Education: 30 IHLs, USM country’s largest Graduate Salary: USD 4,000 pa
  16. 16. Malaysia Johor: ala Philadelphia Population: 3.5 mil Industries: Ag, Manuf, Tourism, Logistics Education: 10+ IHLs, to be joined by international standard Unis from US / Eu Graduate Salary: USD 4,000 pa Emerging: Finance, Media, Health, Edu
  17. 17. Singapore: “NY” of SEA 4.5 mil people
  18. 18. Singapore Industries: Manuf, Finance, Logistics Education: 150+ IHLs, 30,000+ uni grad pa Graduate Salary: USD 16,000 pa Home (HQ) to many MNCs and capital intensive, high-technology industry
  19. 19. Thailand Key cities: •Bangkok
  20. 20. Bangkok Population: 12+ mil, 44% of national GDP Industries: Tourism, Manuf, Finance Education: 100+ IHLs, 350,000 grad pa Graduate Salary: USD 6,000 pa GDP/capital: USD 20,000 Over 1,700 MNCs located in Bangkok “Business as usual”
  21. 21. Philippines: The other LA Key cities: •Manila Cebu 96 mil people
  22. 22. Philippines Metro Manila: Population: 20 mil Industries: Electronics, Outsource, Mining Education: 550 IHLs, 350,000+ uni grad pa Graduate Salary: USD 4,000 pa Cebu: The Sea Port Population: 3 mil, fastest growing city Industries: Manuf, Outsourcing Education: 40 IHLs Graduate Salary: USD 2,000 pa
  23. 23. Vietnam: a Mini-China Key cities: •Ho Chi Min Hanoi 84 mil people
  24. 24. Vietnam Ho Chi Min: Commercial capital Population: 10 mil, 20% of national GDP, some chinese speakers Industries: Manuf, 66% from FDI, Tourism Education: 80 IHLs, 100,000+ uni grad pa Graduate Salary: USD 1,200 pa Hanoi: Centre of Culture Population: 3 mil, highest HDI in Vietnam Industries: similar to Ho Chi Min Education: 2/3 of scientists Graduate Salary: USD 1,500 pa
  25. 25. SEA: “Playground” for Giants • Traditional supply centre for multinationals in traditional sectors • Late 1990’s: Shared services and outsourcing growth centres from MNCs • Early 2000s: Some landmark outsourcing deals inked by outsourcing players • Late 2000s: Secondary growth from large outsourcing players The future: SEA as demand or supply base?
  26. 26. Question Is offshoring and outsourcing still a major global economic driver for job creation?
  27. 27. Question: Demand vs Supply 2005 assumption
  28. 28. IT-BPO Analysis 2009 • “Access to talent is likely to become more decisive as workforce demographics indicate a shortfall in the long-term, in all major developed countries” • Infosys: minimal growth for the next 18 months, at least • Resilient markets: Healthcare, BRIC
  29. 29. Job Migration vs Job Creation • Job creation: Maturing states • Job migration: More matured states
  30. 30. Space for SEA Players? • American, Indian firms lead globally • Malaysia players come a distant third • Philippines, as it is for rest of SEA, still largely an MNC base • Growth strategy: consolidate demand or supply
  31. 31. Top Demand Consolidators
  32. 32. SEA: A Service Consumer SEA is: •net service importer •Major services consumer SEA needs: •Competitive service providers for their market
  33. 33. SEA: A Service Supplier • Countries across SEA produces: – High levels and high quantities of human capital – Cost competitive – Indigenously able to serve 80% of the global population • SEA needs: to enable “MODE-4” for high- yield outsourcing talent
  34. 34. Call to Action #1 • Shared Services and Outsourcing enables enterprises to rapidly become competitive Benchmark and adopt competitive shared services and outsourcing. Consider a Chief Sourcing Officer
  35. 35. Call to Action #2 • SEA has talent, modern societies in the cusp of services delivery transformation Go to the Next Level via COP certification and accelerate the transformation
  36. 36. Call to Action #3 • South East Asia Proposition is Powerful. But the Brand is not (YET) Fly the Flag and complete the “V6 Engine”