05 Jan 2021
Posted in Technology
Malaysia’s BPO market to maintain 3.1% CAGR over 2019-2024, forecasts GlobalData
Despite the expected decline in its value in 2020 due to the COVID-19 disruptions, Malaysia’s BPO market is forecast to maintain a 3.1% compounded annual growth rate (CAGR) over the 2019-2024 period, supported by the government’s active role in promoting the country’s outsourcing sector, says GlobalData, a leading data and analytics company.
GlobalData forecasts BPO services market size in Malaysia to grow from US$1.3bn in 2019 to US$1.5bn by the end of 2024. The government’s commitment to improve digital connectivity, particularly through its National Fiberization and Connectivity Plan (NFCP) and strengthen its 4G services despite the economic uncertainty amidst the pandemic will support the country’s BPO sector in the coming years.
Nidhi Gupta, Technology Analyst at GlobalData, says: “The robust broadband infrastructure that the government aims to build in the country will place Malaysia as the top business continuity destination for outsourced business processes and helps BPO service providers in the country to make a smooth transition to remote working model, a critical necessity both in the current scenario and in case of any such disruptions in future.”
The efforts of the Malaysia Digital Economy Corporation (MDEC) in providing university students and young professionals with training on digital skills is also helping the country’s BPO sector by adding more skilled resources to the industry. MDEC’s Global Online Workforce initiative especially aims to create a community of skilled, digital savvy freelance workers who can serve in the BPO sector.
Meanwhile, digital transformation initiatives by BPO companies such as the use of artificial intelligence to provide omni-channel customer services, implementation of data analytics and use of robotic process automation to deliver higher value processes for clients are enabling continuous improvement in the industry.
Vertical-specific BPO currently represents the largest service category by value in the country’s overall BPO market. Human resource BPO segment will see its value increase at fastest CAGR of 5.8% over the 2019-2024 period and in the process set to overtake vertical-specific BPO as the largest service category. Large enterprises are expected to provide fastest growth opportunities to Malay’s BPO market through the forecast period.
Ms Gupta concludes: “While most large enterprises over the years have preferred to manage their business processes internally, given their strong financial muscle and infrastructure, they are now broadening their approach towards outsourcing as they start considering it not just as a cost cutting strategy but also as a means to streamline their operations and achieve the flexibility to respond to changing client requirements.”