Malaysia’s BPO market is expected to reach US$ 1.4 billion by end of 2021 at a compound annual growth rate (CAGR) of 7.9%, according to International Data Corporation’s (IDC) latest research titled "Business Process Outsourcing Market in Malaysia 2017."
The growth of the BPO market is mainly related to the increase in demand for the customer care segment and high-end analytics solution by Malaysian enterprises.
The research highlights that Human Resources and Finance & Accounting sectors made up three-fourth of the total BPO market in 2016, followed by customer care sector at 14.0%, and procurement sector being the smallest segment at 9.0%.
“Enterprises in Malaysia are on the urge of increasing their efficiency by improving the overall customer experience, integrating better applications and upgrading their flexibility and innovation in business processes. Majority of Malaysian enterprises will eventually rely on BPO providers to deliver efficient and effective services for their business process,” said Sreenath Kandarpah, Head of Services, IDC ASEAN.
Fraught with challenges
According to the research, enterprises that implement Digital Transformation (DX) initiatives in their business will be fraught with challenges due to the lack of expertise to assist in the transition process. Therefore, to stay competitive in the market, enterprises will eventually seek for BPO providers for assistance as they have the experiences and resources required.
Kandarpah added, “As the market demand increases, we expect BPO providers to leverage on the 3rd Platform technology such as the cloud, social, big data and analytics and mobility technologies to transform their traditional business processes to automated processes.”
Local BPO players need to develop or acquire intellectual property (IP) for automation, advanced analytics solutions, and standardized BPaaS that enable better business outcome deliveries to their customers. Investing in skilled resources aligned to the big data and analytics initiatives are the key market differentiator.
“The BPO industry is continuing to transform from being a tactical cost saving center to achieving operational efficiencies. BPO service providers are now focused on strengthening their platform-based and automation services including using advanced analytics to transform the business processes,” added Sherrel Roche, Senior Market Analyst of IDC’s Asia/Pacific Business and IT Services Group.