KDN NO: PP14967/02/2011 (029501) www.the-outsourcing.

com
MICA (P) 199/06/2010
RM12, S$8, US$8

PREMIER MAGAZINE ON BUSINESS AND TECHNOLOGY SERVICES INDUSTRY

ISSUE #19, 2010

ISSN 1985-1006

An interview with the CEO

of CyberSecurity Malaysia

Under watchful eyes of

CyberSecurity Malaysia
Branding: Role of CIO in Governments &
Leaving a mark a competitive sourcing:
on the minds global Controversy or
of buyers economy opportunity?
 CONTENTS
12

8 Opportunities in Singapore public

sector

12 Cover Story: An interview with

CEO of CyberSecurity Malaysia

16 Outsource branding: Leaving a

mark on the minds of buyers

20
Role of CIO in competitive global 16
economy

Easy mistakes to make when

22
embracing LPO

From Global to Local: Increasing

30
reach of learning

Living colours: Similarities and

38
differences in workplace

43
APAC Service Outsourcing
International Conference in Wuxi 20

30

22

38
VAD-ad.indd 1 8/5/10 4:19:19 PM
 editor’snote sri@wordlabs.com.my

KDN NO: PP14967/02/2011 (029501) www.the-outsourcing.com

MICA (P) 199/06/2010
RM12, S$8, US$8

PREMIER MAGAZINE ON BUSINESS AND TECHNOLOGY SERVICES INDUSTRY

ISSUE #19, 2010

I SSN 1 9 8 5 -1 0 0 6

An interview with the CEO

of CyberSecurity Malaysia

Under watchful eyes of

CyberSecurity Malaysia
Branding: Role of CIO in Governments &
Leaving a mark
on the minds
a competitive
global
sourcing:
Controversy or “If you don’t get noticed, you don’t have anything. You just have to be
of buyers economy opportunity?
noticed, but the art is in getting noticed naturally, without screaming
or without tricks.”
– Leo Burnett
theteam
The creation of a strong corporate image and branding is critical to help
any company to stand out from the crowd. However, branding is more
than just a hodgepodge of logos, images, or snazzy corporate one-liners.
Founder / editor Branding often becomes an abused buzzword that refers to anything
Sritharan VellaSamy from corporate visual concepts right up to ad hoc advertising campaigns
and whatnot.
Consultant Essentially, defining your identity is at the heart of branding. It must able
Sundra Surian to communicate to your clients what they can expect from your products,
services and solutions – and why you are different or unique compared to
the rivals.
In our Feature segment, columnist Jerry Durant explains why a holistic
approach to communication is extra important for global services vendors,
editorial editorial@wordlabs.com.my considering the common negative perceptions that the industry seems to
inherit in certain locations and business scenarios.
sub editor Simon Vella Durant laments that many emerging companies fail to realise the
potential of proper branding and commit many mistakes in forming
journalist Julia HOO business basics. He stresses that the clients out there are actually interested
art direCtor Steven CHOO to know your core beliefs, values and how strong is your overall viability
GraphiC artist Shafie OSman as a business. And they are not easily swayed by some shabby advertising
campaigns churned out to illustrate the “merits” of a vendor amidst some
Contributors Tamyne menOn
technical jargons and chest-thumping.
Dorothy llew, mohd arSHaD
Remember, branding is not about overstating your company’s
capabilities and creating reckless fanfare, it’s about the truth and your
company’s promise to the world.
Meanwhile, our Cover Story for this edition takes a closer look at the
sales sales@wordlabs.com.my
Malaysian guardians of the cyber space – CyberSecurity Malaysia.
Its CEO Lt. Col. Husin Haji Jazri (Retired) says his agency’s biggest and
Vikraman ViSnO
continuous goal is to ensure the security and well being of the cyber realm
resh naTHen
that not only benefits Malaysians but also Internet users worldwide.
amol a. KarKHaniS
The agency cooperates and collaborates extensively with other national
and international agencies as issues relating to cyber security often
transcend national boundaries.
According to a recent Forrester Consulting global survey, while many
IT departments are spending big money on compliance and protection
contact admin@wordlabs.com.my
from accidental leaks of “custodial data”, most are not investing enough
to virtually lock up their organisations’ “secrets”.
The survey explained that the “secrets” include information such as
product plans, earnings forecasts, and trade secrets, while “custodial data”
includes customer, medical, and payment card information that becomes
“toxic” when stolen or exposed.
Seems cyber security is as important as your personal security nowadays
– a rather uncomfortable fact for many of us. This is the digital age that
we live in, so face it. – Sritharan Vellasamy
wOrDlabs meDia (001645509-W)
27-1, Metro Centre, Jalan 3/146,
Bandar Tasik Selatan,
57000 Kuala Lumpur;
Phone: +603 9056 4770
Fax: +603 9056 4771
OutAd(backpage).indd 20 3/22/10 2:25:09 PM
Outsourcing | news bits
Malaysia Airlines to
invest RM320m in
ERP Solution
Malaysia’s national carrier Malaysia
Airlines (MAS) is to invest almost
US$100 million (RM320 million) in
an ERP solution to help streamline
operations and enhance business
efficiency.
Its Managing Director and CEO
Tengku Datuk Azmil Zahruddin said the
Enterprise Resource Planning (ERP)
system, which will be implemented in
phases, will help to centralise all data
and boost the airline’s ability to obtain
real-time information.
“The ERP project will transform
our business processes,” said Tengku
Azmil. “The centralising of all data
and the ability to obtain real-time
information will enable greater cost
efficiencies, improve decision-making
and employee productivity as well as
optimise our cash management.”
He added: “The total benefit
expected from the project is estimated
at over RM120 million per annum,” he
told reporters after a signing ceremony
with partners HCL Axon and SAP on
July 12.

 global destination for the outsourced software
“We do expect to get the full benefit
once all the modules are up and
running. We are doing it in phases. We
have the finance procurement phase
and the maintenance, repair and
overhaul phase,” he said.

 and systems testing services is projected to
“It is one integrated system which
will speed up and allow us to make
better decisions. We will see that both
in revenue and cost saving,” he added.
Infosys shuts down
Thai office
Infosys Technologies, one India’s
biggest software services exporter,
has closed down a small outsourcing
facility in Bangkok, one of the three
it had bought from Royal Philips
Electronics.
In July 2007, the BPO arm of
Infosys had taken over Philips Global’s
back-office operations in Chennai
(India), Lodz (Poland) and Bangkok
(Thailand).
A report in India’s Business
Standard said it was the first time
that Infosys had taken up such a
rationalisation exercise after buying
Philips Global’s BPO operations.
The centre in Bangkok had less
than 50 people, and after its closure
the work has been transferred to other
centres in China, Philippines and India.
Infosys has more than 100,000
staff across its facilities in different
parts of the world, most of them in
India.
6 | Outsourcing | July-August 2010
Malaysia aims to
become software-
testing hub
M
alaysia aims to become a
major player in the lucrative
software testing market as it
seeks to develop a sustainable
ecosystem for software testing and certifica-
tion services.
At the launching of the Q-Lab recently,
Malaysia’s Science, Technology and Innova-
tion (MOSTI) Deputy Minister Fadillah Yusof
said the advanced software testing laboratory
was one of the four key elements identified
as enablers for the creation of a sustainable
ecosystem of the country’s software testing
industry.
Fadillah said concerted efforts were being
carried out with the objectives of developing
the nation’s capability in software testing
and certification services and ultimately,
establish Malaysia as a regional hub and
testing services.
He added that the potential economic
returns in this market were significant,
citing Ovum Consulting’s forecast that the
worldwide market for computer software
be worth US$56 billion by 2013.
The efforts to develop the country’s soft-
ware testing industry are spearheaded by the
Malaysian Software Testing Board (MSTB),
a national body representing the software
quality assurance industry interests and
Outsourcing Malaysia goes Down Under
Outsourcing Malaysia (OM) is leading a
business delegation to Australia to promote
partnerships between Malaysian and Austra-
lian service and solutions providers.
OM Chairman David Wong said that a
“smart partnership model” between corpora-
tions of both countries will help Malaysian
service providers to be globally competitive
and to reach out to wider markets.
It the first time that OM is organising such
an initiative to Australia.
The business delegation will also serve as a
platform for both Malaysian and Australian
service providers to formulate strategies to
achieve mutual benefits and collectively
target markets beyond the two countries.
The delegation will cover two seminars,
with one scheduled in Sydney on Aug 3 and
the other in Melbourne on Aug 5.
Wong added: “As the organisers, OM will
put together the seminars and work with
relevant parties and bodies in both Sydney
and Melbourne to ensure its smooth running
Fadillah (centre) at the launch of Q-Lab.
promoting software testing as a profession.
Q-Lab is one of the four key elements
identified as the enablers for the creation of a
sustainable ecosystem of Malaysia’s software
testing industry.
The Q-lab cost RM11million to set up.
A large portion of the investment has gone
into equipping the facility with state-of-art in
systems and equipment, as needed to support
the Lab’s planned services and activities.
It offers a wide range of quality testing and
related professional services including Labo-
ratory Software Testing; Field Site Software
Testing; Product Certification; Laboratory
Facilities Rental; and Consultancy Services.
and beneficial to both countries.”
Wong also cited Australia’s strong
economy as another strong reason for the
business mission.
“We must look beyond the country if
we want to expand and go global and
Australia is a logical choice because both
countries have strong diplomatic ties and
over the years, numerous agreements such as
Asean-ANZFTA (Australia and New Zealand
Free Trade Agreement) and government-to-
government trade agreements that facilitated
trade between Malaysia and Australia,” he
said.
The programme for the seminars will
also feature roundtable discussions and
business-to-business meetings to enable both
countries’ participants to raise and address
each other’s concerns.
The business mission is endorsed by MDeC,
Malaysia External Trade Development
Corporation (Matrade) and the Australian
Information Industry Association.
BIO-ad.indd 1 8/5/10 4:41:47 PM
Outsourcing | news bits
Opportunities
in Singapore
public sector
i
Dc Government Insights projects that
in FY10, the overall ICT spending in
Singapore is expected to increase
year-over-year (YoY). This forecast
follows Infocomm Development Authority
of Singapore’s (IDA) recent announcement
that it plans to invest US$720 million in
about 350 new ICT procurement tenders
for FY10. More insights are revealed in the
study, “Opportunities Abound: Analysis of
Singapore’s US$720 Million Public Sector
FY10 ICT Procurement Plans” – which
provides an analysis of the upcoming
public sector ICT projects and opportuni-
ties for ICT vendors selling to Singapore’s
government.
According to IDC Government Insights,
more than 50% of the projected infocomm
Manufacturing returning
to Britain
sMall manufactures are considering
shifting production back from the Far
East to the UK to save money and
provide a better service to customers,
the Telegraph reported based on a
survey by IDC.
The study involving 700 small and
mid-sized manufacturers around
the world found that companies
were struggling to meet customer
expectations because the complexity of
managing global supply chains.
These companies also ranked
improving customer service as the most
important strategic challenge facing
them, with increasing sourcing from
lower cost countries ranked last of 12
priorities.
“Low-cost sourcing can result
in lower responsiveness and poor
customer service, higher costs, and
additional risk factors such as supply
chain disruptions, diminished intellectual
property protection and environmental
concerns,” said the IDC Manufacturing
Insights report for Infor, the business
software provider, and IBM.
“Manufacturers will continue to focus
on optimising manufacturing operations
and the supply chain, but they are
now consistently prioritising customer
fulfillment above all else. This is a
remarkable shift from pure cost cutting
initiatives of the past as seen in 2009
with the crisis.”
North American and European
manufacturers were making this change,
the report added.
8 | Outsourcing | July-August 2010
tenders in FY10 will be under S$500,000
(US$360,000).
“This allows for a myriad of business
opportunities for participating vendors of
different sizes, with a wide dispersion of
smaller value contracts expected”, says
Gerald Wang, Senior Market Analyst at IDC
Government Insights Asia/Pacific.
As the public sector continues its gov-
ernmental computerisation implementa-
tions with the iGov2015 masterplan, IDC
Government Insights believes that the
next few years will be a crucial time for
government IT.
ICT projects in FY10 onwards are ex-
pected revolve around seven key themes:
cloud computing, ubiquitous presence,
social media, open data and services, sus-
IBM takes blame for failure
ibM took responsibility for a major IT
system failure suffered by one of Singa-
pore’s largest banks on July 5, saying an
employee’s error caused the outage, IDG
News Service reported.
In a statement released on July 13,
IBM had said the problems started when
software-monitoring tools detected “insta-
bility” within DBS Bank’s storage system.
While the storage system remained “fully
functional”, IBM employees initiated a
recovery process to fix the issue.
“Unfortunately, a failure to apply the
correct procedure inadvertently caused the
service outage,” IBM said, adding that no
data was lost.
The outage knocked DBS’ IT systems
offline for seven hours, leaving customers
Accenture acquires Acceria
technOlOgy gy services and outsourcing
company Accenture announced on July 13
the acquisition of Acceria, a privately-held
French company. Industrial consulting firm
Acceria focuses on business
processes and methodologies
for after-sales operations of
industrial companies.
The acquisition is de-
signed to complement Accenture’s strength
in providing services to the automotive and
industrial manufacturing marketplace
globally and further enhances Accenture’s
capabilities in management consulting.
The acquisition includes Acceria’s staff
and assets, which provide business solutions
intended to help companies improve and
tainable technologies, business analytics,
and “OneInbox” and data repository.
Wang added: “Overall, the Singapore
government is consciously investing in
projects such as public services revamp, sys-
tems consolidation, and other sustainable
business solutions to better manage costs
over the long term. As such, proposals that
will allow government agencies to reduce
the high upfront capital expenditures and
to manage operational expenses will be the
most well received.”
unable to withdraw money from automatic
teller machines. All of the bank’s commer-
cial and consumer banking systems were
affected, although no data was lost, the
bank said at the time.
Much of DBS’ IT systems are managed by
IBM under a S$1.2 billion (US$868 million)
outsourcing agreement signed in 2002.
Meanwhile, DBS Group CEO Piyush
Gupta has written to DBS customers, per-
sonally apologising for the inconvenience
caused by the sudden disruption in banking
and ATM services on July 5.
In a July 13 letter posted on the bank’s
website, he said customers have every right
to expect uninterrupted services 24/7, 365
days a year from the banking group. He
said he’s sorry the group has failed them.
sustain after-sales performance.
“For successful after-sales operations
in a competitive market environment,
optimising a company’s product and ser-
vice portfolio and its pricing
strategy is key,” said Sergio
Colella, managing director
of Accenture’s Industrial
Equipment group.
“Acceria’s after-sales expertise, indus-
trialised assets and innovative solutions
can help automotive and industrial manu-
facturing companies improve after-sales
revenues.
“This acquisition is designed to accelerate
Accenture’s expansion into the automotive
and industrial marketplace.”

Philippines BPO revenues right on mark
P
hilippines’ business process
outsourcing (BPO) industry has
already attained half or US$4.7
billion out of its US$9.4-billion
revenue target this year as players re-
ported of as much as 50% revenue growth
expansion, Manila Bulletin reported on
July 18.
BPO Association of the Philippines
(BPAP) president Oscar Sanez told reporters
Fiji to outsource civil
service functions
Outsourcing is to be increased in the
Fijian Public Service as part of the Prime
Minister’s Public Service reform agenda.
Prime Minister, Commodore Frank Baini-
marama said outsourcing some functions of
the Public Service would lead to significant
improvements in the standard of service
delivery over the next four years.
Bainimarama says it is essential to have
clear policy guidelines in place for outsourc-
ing certain functions currently performed
Wipro and Microsoft ink legal deal
The BPO division of Wipro Technologies
will provide legal process outsourcing (LPO)
to Microsoft’s vast intellectual property (IP)
portfolio.
In July 2008,
Wipro began pro-
viding US Patent
and Trademark
filing and dock-
eting services to
Microsoft’s IP and licensing group. Microsoft
previously had used a mix of in house
resources, outside law firms and offshore
vendors to perform these IP services.
Moving to Wipro, with its extensive
BPO experience, international reach and
Ericsson in China telco deal
In the largest outsourcing deal of its kind
to date in the Asia-Pacific Region, Ericsson
said it will take over network operations and
management for China Mobile in Hebei
Province, China.
The Hebei province has a population of
70 million and its area is almost the size
of the UK.
The three-year agreement allows
China Mobile Hebei to improve its net-
work quality and operational efficiency,
and further increase its focus on its core
that based on its survey more than half of its
members are expanding between 6% and
50% in terms of revenue growth.
Sanez is confident the industry is going
to hit its full year revenue growth target of
US$9.4 billion over US$7.2 billion last year
with more revenues coming in the second
half of the year.
BPAP is aiming for a 26-30% growth in
revenues this year over 2009. Last year’s
by the civil service.
He added that such a policy will also
contribute to the Fijian government’s ef-
forts in reducing operating expenditure,
make more resources available for capital
expenditure and encourage private invest-
ment for growth.
This process has already begun with the
outsourcing of road maintenance works
earlier this month to a Malaysian company,
Fiji Broadcasting Corporation reported.
global delivery capabilities, ensured not
only efficiency but also consistency in the
way Microsoft does business, Wipro said in
a statement.
“The success of
this partnership
is testament to
the innovation
and dedication
demonstrated by
Microsoft’s IP team and Wipro’s LPO solu-
tions professionals,” said Saju A. Joseph,
Wipro Technologies general manager.
“Wipro will continue to integrate legal
expertise with process and technology to
reduce overall legal cost for its clients.”
business, the subscribers, while
Ericsson takes full responsibility
for the field maintenance work of all the
base station sites.
The cooperation between China Mobile
Hebei and Ericsson has also gained support
from the Government of Hebei Province,
which has expressed its hope that Ericsson
will make the best use of this opportunity
and set a benchmark for field maintenance
services in China as well as a base in
northern China.
news bits | Outsourcing
US$7.2 billion reflected a lower 19% growth
over 2008.
Sanez said the BPO sector now accounts
for 60% of total services exports of the
country.
To further promote the industry to the
world, the BPAP is lining up an aggressive
campaign in the second half of the year
including a pitch at the World BPO forum
in New York, it was reported.
Aon ‘hits on’ Hewitt with
US$4.9b deal
THE world’s largest insurance broker is
to buy the human resources consultancy
Hewitt Associates for US$4.9 billion
Reports suggest that Aon could
combine Hewitt with its Aon Consulting
unit to create Aon Hewitt, a consulting
and outsourcing business with
combined revenues of US$4.3 billion.
Aon has a global workforce of
36,000. Hewitt employs 23,000
worldwide. Hewitt is one of the world’s
biggest human resources consulting and
outsourcing companies with over US$3
billion in annual revenue and 23,000
employees in 32 countries.
Aon CEO Greg Case said on a
conference call with news agency AP
that his company, based in Chicago,
aims to be the pre-eminent professional
services firm in the world.
“As we continue to grow our
business, this merger will give us a
broader portfolio of innovative products
and services,” he said.
Saudi firm-HCL pact
HCL Technologies recently announced its
seven-year total IT outsourcing services
agreement with Al Majdouie Group, a
leading conglomerate based in Kingdom
of Saudi Arabia (KSA). The end-to-end
IT services agreement undertaken by
HCL will enable streamlined business
processes and seamless integration
across all group companies and points of
presence
Found of Al Majdouie Group.
from website
The engagement involves HCL
Modify PMS
to blend all its outsourcing strengths
– applications and infrastructure
capabilities, industry knowledge
and expertise to help
Al Majdouie achieve
fundamental transformation
at the enterprise level.
The scope includes developing
infrastructure, implementing Oracle
e-business suite with 70+ modules,
managing and running the IT
infrastructure.
The agreement also includes
commissioning and management of Data
Centre and Disaster Recovery services.
July-August 2010 | Outsourcing | 9
Outsourcing | leadership
Leadership is
what Leadership does
BY ADITYA BHALLA
l
eadership development pro-
grammes in some organisations
are narrowly focused on imparting
soft skills or behavioural related
inputs to staff in leadership positions. There
appears to be a tacit assumption that
subject matter expertise complemented
with inputs on soft skills would make for a
holistic leader.
This can be a fallacious choice, as techni-
cal specialisation may not equip individuals
with the right skills and orientation to
launch, test and revise business strategies
as necessary. Market dynamics are exert-
ing greater pressures even on managers
with no explicit sales targets to possess
the skills to identify growth opportunities,
streamline operations and develop their
team potential.
The new age leaders are expected to
possess the necessary skill sets that correlate
with the business challenges and exigencies
of the enterprise. Soft skills are necessary
but no longer sufficient criteria for success
10 | Outsourcing | July-August 2010
in a leadership position.
Leadership development for staff in
leadership position is best designed and
implemented when it occurs as a process
embedded within the larger contextual
frame of organisational strategy.
Till recent past, leadership development
was considered by CEOs as a top area of
concern for organisation growth. It has been
recently replaced by the pressure to innovate
to revive lagging EBIDTAs (earnings before
interest, taxes, depreciation, and amortisa-
tion) and eroding market share.
Soft skills are The skills imparted in leadership de-
necessary velopment programmes must accordingly
adapt to equip the leaders with the ability
but no longer to innovate in different aspects related to
sufficient revenue generation, customer experience,
cost reduction or efficiency improvement
criteria for and maximising the potential of team
success in a members to generate elegant solutions to
day-to-day issues.
leadership The 4-D Model of Leadership (refer image,
position. right) is based on this changing landscape
and captures the four critical aspects that
make for effective leaders. These dimensions
 leadership | Outsourcing

are briefly explained

here.

Deliver Revenue
Potential Leaders possess
Leaders possess the skills the skills to crystallise
to crystallise the market
potential into meaningful the market
offerings that can sustain potential into
the revenue growth of an
organisation. Some of the meaningful
necessary skills to master offerings that can
sustain the revenue
are:

•  Understanding critical
parameters of value to the
growth of an
customer:
Critical Parameters of value
organisation.
are those characteristics
or features of a product or
service for which the customer
is willing to pay. Leaders must
understand the process of sci-
entifically assessing the critical
parameters of value and using
that information to assess:
– Over-served markets
– Under-served markets
– Appropriately-served markets
• Understanding the objective laws of evolu-
tion of systems (markets/technology)
Leaders are able to perceive the objective
laws of evolution within the context of
the changes in the environment (societal/
technological/business). This helps in estab-
lishing the structured roadmap of offerings
(products or services) to guide the growth of
the business.
Drive Operational Excellence
An organisation that grows rapidly risks
setting up of inefficient practices and / or
practices that are no longer scalable. This
provides customers with an inconsistent or
poor experience at different touch points
such as call centre, store, email, website,
inter-departmental handovers
ture and the inter-team communication
requirements place a lot of strain on those
who are relatively unskilled. Ineffective
communication leads to downstream issues
such as product defects, defective customer
service and loss in employee productivity
and morale.
This phenomenon is referred to as “Co-
ordination Deficit” in an organisational
context.
Discover self-balance between
‘Being’ and ‘Doing’
It is equally important for leaders to under-
stand the origin of their behaviours and use
that knowledge to guide their responses to
the environmental changes.
The key tasks of inner leadership are to
become aware of the mental map of reality,
determine if it is giving what the leader
wants, and update it to reflect both the in-
nermost desires and the latest technological
thinking. To lead consciously, then, means

4-D Mode of Leadership and similar others. Effective becoming aware of both the content and
leaders are able to drive out structure of the mental map, its origins
the inefficiencies in their and nature, and taking full responsibility
organisation. for making sure it yields the desired results
Deliver in the organisation.
Revenue Develop team potential Leaders also have the responsibility for
Potiental Leadership is about developing observing their effect on others due to the
the potential of the team to take internal map.
on leadership positions within
the organisation. Team Conclusion
members have to learn The new age leaders need to develop a
4-D Model to be effective change more holistic skill set that goes beyond
Discover Drive agents to manage the the conventional inputs on soft skills and
Self-balance of Operational communication and behavioural aspects.
coordination process The 4-D model of Deliver on revenue
Being/Doing Leadership Excellence
with greater dexterity potential, Drive operational excellence,
than lesser skilled staff. Develop team potential and Discover
Change agents excel self potential as a leader – can serve as a
in identifying the differing framework for designing more well rounded
and sometimes conflicting per- leaders.
Develop spectives of key stakeholders, the
Team Potiental- potential failure points in proposed
Next Generation solutions and the ability to tap into Aditya Bhalla is QAI Innovation Practice Lead
Leaders readily available resources to achieve the and consults clients on product and process
change management objectives. design and improvement. He can be contacted
The complexity of organisation struc- at adityabhalla@yahoo.com

July-August 2010 | Outsourcing | 11

Outsourcing | cover story
Under the watchful eyes
of CyberSecurity Malaysia
By Simon Vella
c
yber threat is a serious matter
that has come to define the times in
which we live in. Cyber security is
no more an option – it is a primary
requirement – as any lapse would provide
major threat not only to commerce but
also the Internet, which has become one
12 | Outsourcing | July-August 2010
of the principal means for communication
today.
CEO of Cybersecurity Malaysia Lt. Col.
Husin Haji Jazri (Retired) stresses that cyber
security has become a vital foundation for a
country’s national and economic security.
Husin said thus far, cyber security in
Malaysia is at a safe and manageable level.
He observes that most companies have
made substantial investment in technology
and ICT hardware and security solutions.
“The concern is mostly on the users (the
employees) Internet habits, especially with
regards to the social networking phenom-
enon. Most companies ban sites such as
Facebook and YouTube, but the employees
still access these sites at home using the
same laptop computers that contain com-

Husin … We are
neither a cyber
police, nor a cyber
space regulatory
body. We do
uphold the law
and we support
regulators and
law enforcement
agencies. But our
focus remains on
providing technical
specialist services.
pany data. Such habits make company data
vulnerable even with the step to ban certain
sites during office hours.
“Then, there are Blackberries and other
smart phones that are perpetually connected
to the World Wide Web. Add to that SMS
scams that target employees. So basically,
the issue is not so much on the technology
side but more on the social side of cyber
security,” added Husin, who has dedicated
his entire career to information and com-
munication systems security – extending
from a long-time military career to his work
with research institutions and government
agencies in Malaysia.
A not-for-profit organisation, CyberSecu-
rity Malaysia is the national specialist centre
for cyber security – under the purview of
Malaysia’s Ministry of Science, Technology
Internet security impacts the business climate rating of a country,
just as political stability does.
and Innovation (MOSTI).
“Basically, we are tasked to look after
the safety and security of Malaysian cyber-
space whether from the technical aspects,
research, human resources development or
outreach and other specialised services in
the field of cyber security,” said Husin, who
became only the second Asian to have been
honoured with the Harold F. Tipton Lifetime
Achievement Award this year.
CyberSecurity Malaysia also cooperates
and collaborates extensively with other na-
tional and international agencies as issues
relating to cyber security often transcend
national boundaries.
“We are well known within the informa-
tion security circle, hence, it is not a problem
to get cooperation from our international
counterparts.
“For example, we are the co-founder of
Asia Pacific Computer Emergency Response
Team (APCERT), which now has 25 members
comprising Computer Emergency Response
Teams (CERTs) and Computer Security
Incident Response Teams (CSIRTs) in the
Asia Pacific region.”
In addition, the agency is the founder
of the Organisation of Islamic Conference,
Computer Emergency Response Team (OIC-
CERT), which currently has 18 OIC countries
as members. Furthermore, the agency is a
member of the Forum of Incident Response
and Security Teams (FIRST), which has a
total of 222 members across 48 countries.
Husin said: “We are also a member
or affiliate of many other associations in
the field of Internet security such as the
Anti-Phishing Working Group (APWG).
Having friends in the right places gives
us the advantage of cooperation and fast
response in times of needs.”
cover story | Outsourcing
The agency has also been actively par-
ticipating in various conferences, seminars
and workshops either locally or internation-
ally. “With these presence in the local and
international arena, we are no longer
strangers to the ICT industry, particularly
in the information security and cyber safety
field.”
Husin said CyberSecurity Malaysia’s
biggest and continuous goal is to ensure the
security and well being of the cyber realm
that not only benefits Malaysians but also
Internet users worldwide.
“Through international cooperation,
Malaysia could seek strategic partners over-
seas in the event foreign hackers threaten
the nation and vice-versa.”
Asked if there are any misconceptions
the public and private sectors have about
CyberSecurity Malaysia and its work, Husin
said his agency is often mistaken for “cyber
police”.
He said: “We are neither a cyber police,
nor a cyber space regulatory body. We do
uphold the law and we support regulators
and law enforcement agencies. But our focus
remains on providing technical specialist
services.”
Cyber security is indeed vital to the
growth of the Malaysia technology and busi-
ness process services sector. He said: “The
security of private information networks is
the foundation for today’s global economy.
This is also and, indirectly, the foundation
of global trade in IT-enabled services and in
the global supply chain.”
Husin added that it is important to reduce
and eliminate cyber security violations that
could affect local and international business
confidence with regards to Malaysian out-
sourcing vendors. “Internet security affects
July-August 2010 | Outsourcing | 13
Outsourcing | cover story
the business climate rating of a country,
just as political stability does. Countries
with strong and effective cyber security
measures are deemed more attractive as a
hub for IT and Business Process Outsourcing
activities.”
The agency also creates many initiatives
to establish safe and favourable cyber
environment that will, in turn, help boost
economic growth.
Malaysian Common Criteria Evaluation
and Certification Scheme (MyCC Scheme) is
one of the efforts towards this goal.
MyCC Scheme is a systematic process for
CyberSecurity evaluating and certifying security function-
ality of ICT products against defined criteria
Malaysia also based on ISO/IEC 15408 standard, also
known as Common Criteria (CC).
cooperates and CyberSecurity Malaysia is providing
collaborates financial assistance under the Economic
Stimulus Package 2 (ESP2), which promotes
extensively with the MyCC scheme. Malaysian companies
developing ICT products are eligible for the
other national MyCC Financial Assistance (MyCCFA) to
and international
help them obtain the Common Criteria ISO/
IEC 15408 Certification.
agencies as Husin is confident that the Common
Criteria certification will improve the com-
issues relating petitiveness of Malaysian ICT products in
the global market, besides also broadening
to cyber security
and providing access into new markets. “In
often transcend the long run, it will collectively translate
into job creation, revenue generation and
national economic upsurge.”
At present, Husin says, the agency is
boundaries. also extensively promoting Information
Security Management System (ISMS) ISO/
14 | Outsourcing | July-August 2010
IEC 27001 certification for public and private
companies alike, besides other professional
certifications such as Certified Informa-
tion Systems Security Professional (CISSP)
targeted for cyber security practitioners and
individuals. “These certifications are on
top of the MyCC Scheme targeted for ICT
product developers.”
Besides, CyberSecurity Malaysia also
provides the quality seal and recognition
for the security features for businesses and
industry to help enhance quality and add
value to products and services that they
provide overseas. “Therefore local hardware
and software developers have the opportu-
nity to sell the products overseas with their
security features guaranteed.”
Additionally, the agency has established
two main programmes for Malaysian or-
ganisations and the public at large – namely
the Cyber999 Help Centre and CyberSAFE.
Husin said: “The establishment of the
Cyber999 Help Centre is in line with the
Malaysian government’s initiative to make
‘999’ as the number to call for emergency as-
sistance. Hence, whenever Malaysians need
emergency assistance in the cyberspace,
Cyber999 is the place to go.”
Some of the services provided by Cyber999
Help Centre include assisting Internet users
in dealing with computer security incidents
and providing the subsequent recovery and
eradication steps.
The help centre also assist in communi-
cating and escalating security incidents to
relevant service providers, computer security
emergency response teams (CSIRTs) and law

Countries with
strong and
effective cyber
security measures
are deemed more
attractive as a
hub for IT and
Business Process
Outsourcing
activities.
enforcement agencies, besides producing
regular security advisories and alerts on the
latest cyber threats.
Husin says Cyber999 also lends a hand
in providing analysis on post-incident
artifacts such as malicious codes and system
logs.
He added: “There are nine major cat-
egory of incidents that are handled by
Cyber999. They are Content Related, Cyber
Harassment, Denial of Service, Fraud, Intru-
sion, Intrusion Attempt, Malicious Codes,
Spam and Vulnerabilities Report.
“The public can get more information
about Cyber999 Help Centre by visiting our
corporate website www.cybersecurity.my. They
can report any cyber threats to Cyber999
Help Centre by email to cyber999@cyber-
security.my or via CyberSecurity Malaysia
Customer Service Hotline at 1-300-88-
2999.”
Meanwhile, as part of the CyberSAFE pro-
gramme, short for Cyber Security Awareness
for Everyone, the agency has established an
outreach portal www.cybersafe.my and the
CyberSAFE ambassador programme.
Husin said: “Under the CyberSAFE, we
also conduct exhibitions, road shows, talks
and awareness seminars for children, adult,
and organisations. The public in general or
organisations may request for speakers or
even register to be CyberSAFE ambassadors
via the www.cybersafe.my portal.
“We see school students as one of our
main target audiences too. Thus far, we
have reached to more than 150 schools all
over the country.”
Securing our Digital City
As information and communications
technology continues to push the frontiers of
innovation, the relevance and dependence
on technology becomes our way of life.
At this juncture, we all live in Digital Cities;
where the community combines broadband
communications infrastructure and innovative
services to meet the needs of governments,
businesses and the public.
“Securing Our Digital City” is a proactive
initiative to address national security concerns
and to build community confidence by
mitigating the multi-dimensional cyber security
challenges in critical infrastructure, economic
and cyber crimes.
The vision is to create a cyber-secured
community that is engaged at local, state,
national and international levels. This will be a
holistic approach towards cyber security.
The “Securing Our Digital City” initiative
will provide the “community” or digital cities
with the knowledge and awareness in cyber
security and best practices needed to secure
our digital cities.
This project’s concept will be introduced
and discussed during the upcoming
CyberSecurity Malaysia Awards, Conference
& Exhibition (CSM-ACE) 2010 to be held from
Oct 25-29, this year.
About the CSM-ACE 2010
The CSM-ACE 2010 is an annual industry
conference that shapes the regional
information security landscape. Expected to
draw over 1,000 participants from around the
world, the CSM-ACE 2010 will bring together
some of the most influential and innovative
minds in business, government, academia and
key information security players to exchange
policies, ideas and technology. Among the
objectives of the event are:
• To build a foundation for innovation to drive
transformation in ICT security.
• To act as a catalyst in driving transformation
through creativity and innovation for the ICT
security industry.
• To create a thought-leadership platform
venturing in the new cyber security frontiers.
• To create networking as well as trade and
investment opportunities.
A concise look at CyberSecurity Malaysia
It acts as the technical agency
conducting analysis and activities to protect
the nation’s cyberspace especially in terms
of technology and expertise. For example,
when the authorities need the advanced
technical systems to analyse digital
evidence, the agency will help them out.
CyberSecurity Malaysia also holds
activities and training programmes for
Critical National Information Infrastructure
(CNII) to enhance the security of IT
systems in the public and private sector.
The services provided by CyberSecurity
Malaysia can be broadly categorised as
follows:
• Cyber999™ Help Centre
cover story | Outsourcing
• To create a networking platform for ICT
security professionals, policy makers, industry
players, researchers and ICT security buyers
from around the world.
• To allow the ICT Security industry players to
promote their products and services through
exhibition. Hence, creating cross border trade
and investment opportunities.
• To expedite the implementation of Securing
Our Digital City initiative
• To gather feedback from the ICT security
industry on Securing Our Digital City initiative.
• To provide a platform for the different key
stakeholders, ie Government, industry players,
NGOs and public, to voice their opinions on
the implementation of Securing Our Digital City
initiative.
• CSM-ACE 2010 incorporates a two-day
conference, an exhibition of information
security technologies and the Malaysia Cyber
Security Awards 2010. The conference will run
on three focused tracks:
• Policy, Legal and Governance
• Technical
• Information Security Management System
Key Topic Highlights
• Securing Our Digital City: Towards 2020
• e-City: Towards a Resilience Society
• People – The Missing Link Factor in
Inculcating Information Security Culture in
Organisation
• Treating Information Related Risks – What
Control Do I Need to Know?
• Answering the Question “Does my
Organisation Handle Information Security
Risks Effectively?”
• Balancing Information Security Compliance
with Operational Efficiency
• What Works in Penetration Testing and
Vulnerability Assessment?
• e-Discovery: Do it the Right Way
• Integrating Trusted Computing Technology in
the Enterprise
• Securing and Data Protection in the Cloud
• Unified Content Security: Securing
Borderless Enterprise
For more information, please visit
www.csm-ace.my
• Malaysia Computer Emergency
Response Team (MyCERT)
• Digital Forensics (CyberCSI™) and Data
Recovery Services
• Security Management and Best Practice
Advisories
• Security Assurance Services
• Vulnerability Assessment Services
• Malaysian Common Criteria Evaluation &
Certification (MyCC) Scheme
• Information Security Professional
Development
• Cyber Security Awareness Programmes
through CyberSAFE (Cyber Security
Awareness For Everyone) Programme
• Cyber Security Policy Research
July-August 2010 | Outsourcing | 15
Outsourcing | branding

Outsource branding
Leaving a mark on the minds of buyers
pressures on the buyers to seek popular
alternative (in-source or source domesti-
Outsourcing cally).
Brand defence is not about providing a
By Jerry convincing argument supporting “why”
E. Durant – it’s about providing a brand atmosphere
that eases concerns. As outsource suppliers,
is to have a brand that has a negative
connotation associated with it, due to some
unfavourable past events or dealings. Both
companies and individuals emit brand
value and these can be both positive as
well as negative.
These values can change over time

O
utsourcing is a hard busi-
ness in so many ways. The mere
presence of outsourcing providers
and practitioners stir intense
emotions at every level of society. These
conditions create impressions that have
lasting effect on the outsourcing brand.
As we all know our profession isn’t
always viewed in a positive way and
as a company you need to find
ways to reverse (or at least
reduce) these perceptions.
Branding is more than
a logo, it reflects every-
thing that your business
stands for. Companies
who think they can
win sustainable busi-
ness purely based on
referrals will reduce
their long-ter m
growth. This is
due largely to the
lack of strategic
repeatability and
control.
Yo u r b r a n d
must:
• Overcome negative
perceptions,
• Reflect your best
virtues,
• Identify your inclu-
sion as a part of the
outsourcing commu-
nity while establishing
a definitive difference of
importance to consumers,
and
• Credibly understand the values that
buyers make decisions on.
Outsourcing culture brand
You would think that a buyer would have
already overcome the negative aspect of
outsourcing given their interest in your
services. However, they may not realise
that their exploration, further expansion,
and activities are getting the attention of
others.
Employees, shareholders and even gov-
ernmental regulators, in today’s economy,
are quick to get involved and place added
what can you do to overcome the outsourc- simply because society (and customers) take
ing brand challenge? a different retrospective on historical events.
First and foremost, your brand needs There are, however, companies that can be
to promote an understanding and respect at the top of their game and still not have
for the societal issues confronting buyers. significant brand recognition. This can be
If your brand is all about your business, caused by:
it leaves little support for the consumers • Little or no market promotion efforts,
as they attempt to address the challenges • Narrow or niche service offering,
• No brand development, and
• Confusing and loosely defined brand
statement.
Some might contend that brand-
ing is a waste, why bother when
revenue success has been
established? True, but has
this success be developed
from coincidence or
from hidden brand
emission?
E v e n
though we
accept op-
portunities
based on co-
incidence, it
is a phenom-
enon that
cannot be
relied upon.
Changing
market con-
ditions further
complicate our
ability to repeat
these success sto-
ries. Isn’t it easier to
create the possibility
Show it! … how strong is your of success based on your
they face. overall viability as a business? deliberate and controlled
Strong actions rather than hoping for
brand values involving your strengths as a probabilistic luck?
provider (viability & capability), safe location Yes, there is also positive brand value as
positioning and strong knowledge resources observed through the eyes of the customer.
must shine through. Better brand resolution Positive brands radiate warmth and have
is an area where outsource trade bodies and lasting impressions that captivate your
government can take a leadership role to consumer and lead to a lasting interest in
improve the image of outsourcing. Until you. There are six aspects to branding:
this relief is provided, outsourcing firms will Identity: Company traits
have to bear the burden on an individual Image: Consumer view
basis. Character: Values relative to stability, in-
tegrity, honesty, commitment
Positive and negative branding Culture: Fitting into service sector (part
It is just as bad to have no brand as it or separate form)

16 | Outsourcing | July-August 2010

 branding | Outsourcing

Personality:Who the brand appeals to

within the consumer commu-
nity
Essence: Emotion promoted
The effectiveness of their implementation
is directly influenced by the appropriate use
of graphics, adequate contextual content
and style in which it is presented.

Let’s talk specifics …

Whether you are a startup or a huge set-up,
your brand needs attention. As will be
discussed later, brand management and
governance are an essential part of the
branding responsibilities.
When was the last time that you did a
general consumer survey to see if you were Branding is not easy
easily identifiable and what your brand and sometimes we
represented to them? If your company is cram too much into a
recognised but cannot be connected to single message.
your services, could this be attributable to
branding problems?
We consistently hear the outsourcer’s
lament about wanting business, needing
help and suffering from a lack of interest in
services. These conditions are attributable
to brand immaturity and lack of credible
visibility.
A website must be viewed as simply a
storefront to your business. It should not
be held as the only means to establish-
ing brand visibility. Although your web
storefront may be on Main Street, it can
be easily distorted by other brands and the
potential customers may easily bypass you
by without knowing that you exist. This
reminds me allot of the children’s puzzle
game, “Where’s Waldo”.
From the very first day of existence, your
business is accumulating brand value.
Many emerging companies fail to realise
this and commit other faults in forming
the business basics. Focusing on delivery, it isn’t about the details – it’s about the life
feeble campaigns are mounted to expound and breath of the organisation.
upon the virtues of the company and its
technical bravado. Overlooked is the drive Mixed message:
of consumers to form credible working Pathway of confusion
relationships and these are not based on Branding is not easy and sometimes we
self-promotion or shallow claims on delivery Branding is more cram too much into a single message. In
excellence. than a logo, it reflects doing so we create a confusing, bewildering
Buyers want to know your core beliefs, everything that your and sometimes “hard to believe” brand
values and how strong is your overall business stands for. statement that ultimately lose buyer inter-
viability as a business. These are essential est.
entry point; further discussions will not take To prove this point is the effectiveness
place until these aspects have been properly of the “elevator speech”, a brief but lasting
ascertained. message capable of being delivered in
Companies sometimes fail to understand the time an elevator travels to a desired
their customers. This is often reflected in mix floor. Talking faster may provide more
value messages being sent, lack of appropri- information but the message gets lost with
ate listening skills, limited research and the intended audience.
formative relationship building effort. This also applies to your branding mes-
Characterised by an “it’s all about sage, so less is more.
me” mentality, outsourcing companies Buyers need to know the critical high
continue to promote a brand that follows points about your business and what is be-
a similar suit. Does your brand statement ing represented. They don’t need a maze of
and the related implementation of the capability, technologies, history and poorly
brand talk more about you and less about vetted terms that seem to lead nowhere.
the proposition that you are putting before For example, what is the BPO (Business
the customer? Process Outsourcing) scope comprised of
Does the client feel engaged or enter- and what additional information might be
tained by your promotion show (aka dog- needed in order to reach the desired buyer
and-pony exposition)? There is a time and community? Are call centres a part of BPO
place for facts and supported proofs, but From the very first day of existence, your segment or CCO (Call Centre Outsourcing)
when it comes to brand and brand motion, business is accumulating brand value. segment?

July-August 2010 | Outsourcing | 17

Outsourcing | branding
There are a number of other examples
such as Finance Accounting Outsourcing
(FAO), Human Resource Outsourcing (HRO)
and so on that create buyer confusion,
resulting in misbranding. Forming a brand
at the proper level of detail (for example
BPO vs. FAO) must be considered through
an understanding of how potential clients
get to us.
If they are looking for accounts payable
services it is more likely that they will relate
to FAO rather than the broader BPO term.
Brand management is important as it is
viewed as a corporate asset.
The craft of branding
Where do you get started? As was mentioned
earlier there are six aspects to branding.
Each carries with it three possible delivery
alternatives. Fundamental to this is the need
to gain a solid understanding about your
customers, both historically and those that
have eluded your capture.
Information that is used must be reliable
and with sufficient content in order to
minimise conjecture. The more you know
the better equipped you are to craft a brand
that attracts customers.
Outsourcing demands an inward self-
evaluation that can be used to uniquely
set us apart from others. Maybe it’s a
particular employee who is renowned or
has a qualification attained through an
independent certification body. Remember
that these attributes are invaluable and
carry objectivity and credibility (not to
18 | Outsourcing | July-August 2010
mention the value that the qualification
imparts).
Armed with credible information about
your target customer and objective insight
about your own strengths, you must tackle
identity, image, character, culture, personal-
ity and essence elements. Appropriate
application of contextual content, graphics
and style will produce a holistic brand for
your company.
Do not overlook the matter of estab-
lishing the scope for your brand. Often
brands attempt to reach a global market
create a degree of dissolution. Had brands
been crafted to fulfill specific markets, the
potential for more business might have
occurred.
Even global brands may require adap-
tion to attract specialised interests. This
can be seen in consumer brands such as
Coca Cola or McDonalds where the brand
is tooled to fit local needs but at the same
time retain vestiges of the global brand
representation.
Be cautious too, if you outsourcing
business has been predominantly local as
it will require adaption to fulfill a global
market setting.
Hitting the mark
Did your message hit the mark? Not all
brands will provide instantaneous feedback.
Depending on average buying cycles,
brands that get introduced outside of these
periods may experience a lag in buyer
response.
To alleviate anxiety, outsourcing com-
panies could selectively introduce itself to
a cross section of buyers.
Brands should leave a lasting (positive)
impression. Great brands will produce a
pipeline of new opportunities resulting from
your value statement. Exemplary branding
will raise your outsourcing business above
the competition without prejudicial com-
mentary. Such brands provide value to the
consumers by reducing buying and delivery
risk, increasing return-on-investment and
improving closure speed. This provides
additional justification value for buyers.
‘Strong-arm tactics’
Want something to fail? Then put it out
there and hope that it will develop on its
own. Branding requires a nudge and a
push. Branding efforts should involve great
fanfare especially if your company has
been in hiding as the result of branding
neglect.
A three-stage introduction may in-
clude:
Pre-Introduction: Interest stimulation
Introduction/Rollout: It’s here!
Care & Feeding: Yes, we are here …
and growing too
How you facilitate this will influence
the brand longevity and loyalty. During
the dotcom era, fledging companies took
advantage of the Super Bowl to make their
one big splash. Amid the noise of much
larger companies like Budweiser, Bridge-

Branding
efforts should
involve great
fanfare
especially if
your company
has been
in hiding as
the result
of branding
neglect.
Whether you are a startup
or a huge set-up, your
brand needs attention.
stone and Gillette were smaller companies
like Go Daddy and Monster.com that made
their branding debut.
At that time, not much was known about
them and even less about how their services
might be used. But their clever and innova-
tive approach – based on understanding the
buyer profile – captivated interest, which
was built upon over the subsequent years.
Unlike so many others who fail to at-
tain sustainable business velocity, these
organisations went on to become globally
credible enterprises.
Good brands bring with it opportunities
with prime avenues such as top billing at
conferences, access to keynote speaking
slots, and opportunities involving media
announcements. All of these provide invalu-
able extensions to brand value.
Responsible brand behaviour
Anthony Mitchell, a customer relationship
management buyer, concluded that there
are 10 commandments to branding. Some
of these have been mentioned previously,
which emphasises their importance:
• Focus on Target Markets
• Don’t Covet Another’s Brand (and this
includes brand portrayal)
• Match Brands Exactly with Domain
Names
• Don’t Use Silly Prefixes (dilutes and
creates identity confusion)
• Escape the Background Noise (including
personal self-acclaim, use of popular words
like innovation and trying to be global
branding | Outsourcing
when you are regional) questions from buyers. Your competition
• Obey Rules of Grammar may know your weaknesses and are already
• Avoid Negative Connotations (including mounting campaigns to capitalise on them.
suggestive or potentially offensive) Taking a decisive branding initiative will
• Make Brands Memorable and Easy to pay dividends for many years to come.
Spell
• Obtain Internal Understanding and
Acceptance Jerry Durant serves as Chairman Emeritus
• Test Prior to Deployment (founder) for The International Institute for
Outsource Management, a trade organisation
It was once said that a smart man does
not need to possess all knowledge, he only
dedicated to the assessment, development,
and guidance of outsource service providers in
needs to know where to get it (and possibly
when). Branding and effective promotion
the ITO, BPO, Call Centre and KPO domain
areas.
may require expert guidance.
The question is whether the
expert needs to be supplier or
buyer centric. In most cases it
will be both.
There are parts of branding
that are not influenced by
geography and there are some
(such as presentation form)
highly affected by local factors.
This is one of those rare occa-
sions, where vantage point Even though
diversification is invaluable.
When more is at risk relative we accept
to brand success and failures,
the value of expert diver- opportunities
sification becomes more
important. based on
Your fate is in your coincidence, it is
hands
Business does not come easy a phenomenon
even when there is an abun-
dance of magic cookbook
that cannot be
solutions. Purposeful and
deliberate implementation
relied upon.
of critical business founda-
tion points must encapsulate
credible service delivery.
Overlooking or ignoring
fundamental principals will
hinder business growth and
put at risk the long-term
health of your business.
We have all heard of com-
panies that have failed not
because of their world-class
products or solutions but be-
cause the market was simply unaware
or misinformed about them. Don’t
be disillusioned by thinking that
a sale makes for a success story.
Sustained and controlled repeat-
ability reflect success and the
effectiveness of your brand
message. Coincidence is ac-
cepted as a gift and not as a
basis for business develop-
ment maturity.
Branding is the
keystone in business.
Without a definitive
and unique brand,
representing the
core values of
your business, a
company will
constantly
face the same
nagging
July-August 2010 | Outsourcing | 19
Outsourcing | CIO

There a number of
concurrent roles the
successful CIO must play to
gain the confidence of the
business unit managers and
other key stakeholders.

Playing CIO in competitive

global economy
CIO needs to constantly search how business units can use technology to enable
business, says Dr Wendell Jones in this first of a two-part series

searching for innovative ways that technol- business and be constantly searching for
ogy can be used to move the company how the business units can use technology
Outsourcing forward.  to enable the business. And when change
To do this, the CIO needs a broad busi- is required, the CIO is typically in the best
By Dr. Wendell ness knowledge, a deep understanding position to lead the change as an architect
Jones of technology, and an awareness of what and integrator. 
constitutes success for the business. To lead There are a number of concurrent roles

T
echnical skills alone may have
made IT managers successful in
an earlier era, but in this rapidly
changing and competitive global
economy, CIOs today must be constantly
and influence others, strong negotiation the successful CIO must play to gain the
and communication skills are important.  confidence of the business unit managers
Placing the CIO in the executive suite and other key stakeholders, and to effec-
was an important development, but to be tively manage, influence and integrate.
effective at the CXO table, the CIO needs We need to first think of the CIO as a re-
to understand the ends and outs of the lationship builder with different stakehold-

20 | Outsourcing | July-August 2010


ers, but most importantly with business unit
management. Line managers are the users
of IT services, for they are the heads of the
business units and departments responsible
for exploiting business opportunities and
achieving competitive advantage.  
The CIO must create and maintain
open communications with business unit
managers,  but clear communications
channels can’t be developed instantly.
Effective communications requires perform-
ing consistently, and building  a trustful
relationship.   inwardly
The success or failure of any company’s
use of information technology depends on
line managers at all levels understanding
what IT can or cannot do.
However, a CIO who can’t consistently
perform as a project manager and deliver
projects on schedule and within budget
usually does not get an opportunity to build
positive relationships.  
The days of long development time,
inflexible schedules and cost overruns are
over.  The IT organisation must quickly
develop applications and integrate ERP
systems and other purchased packages
within budget and on time.  
Many companies turn to
offshore service providers
to not only reduce costs,
but to gain access to
software engineering
skills and disciplined
processes. But whether
developed in-house,
outsourced or some
combination, it is
essential that the IT
organisation develop
systems that meet re-
quirements and deliver
on schedule and within
budget.
A contemporary CIO
must also have the
ability to plan
the IT archi-
tecture.
CIO | Outsourcing
The software and hardware standards
that define the shape of the architecture
are responsibilities of a CIO and should
not be outsourced. It is unlikely that the
Lateral service provider has the business knowledge
leadership necessary to ensure that technology is
aligned with the business direction.
requires Another important responsibility of
communication the CIO is to build a top performing IT
organisation of highly motivated profes-
and negotiation sionals. Rapid technology change is result-
ing in gaps in the skill sets of IT staffs.  
The answer to having the right mix of
within the skills is a combination of investing in the
company and existing employees and using outsourcers
selectively and wisely.
outward across Lateral leadership is another of CIO’s
organisational role. Lateral leaders play a vitally impor-
tant role in managing outsourcing and
boundaries and alliance and partnership relationships
national borders. with suppliers and inwardly across the
organisation. A key finding of a new study,
Simply issuing “Leading Laterally in Company Outsourc-
directives ing”, by Michael Unseem (Wharton) and
downward will Joseph Harder (Darden Graduate School of
Business) that appeared in a recent Sloan
not get the job Management Review found that successful
done in today’s supplier relationship management requires
a blend of leadership skills different from
economic traditional management.  
environment. Lateral leadership requires communica-
tion and negotiation inwardly within the
company and outward across organisa-
tional boundaries and national borders.
Simply issuing directives downward will
not get the job done in today’s economic
environment.
In summary, the successful CIO must be
able to think big picture while still focusing
on the details. The CIO should foster  a
win-win approach to issues and emphasise
“we”, not a “we-they” attitudes.  
An effective CIO today demonstrates
good communication and negotiation
skills, an shows an ability to embrace and
champion change and the capacity to
think strategically, while still
comfortable with detailed
technical analysis.
Dr Wendell Jones is a Profes-
sor of Management and a
former senior executive at
Compaq, NASDAQ, and
CIO must be McDonnell Douglas. He
is recognised as a leading
able to think outsourcing practitioner,
big picture advisor and thought
leader. He is the co-author
while still of “Outsourcing Informa-
focusing on tion Technology Systems &
Services” – recognised as one of
the details. the best outsourcing references.
The book was recently released in
a Chinese edition.
July-August 2010 | Outsourcing | 21
Outsourcing | Legal process outsourcing

Easy mistakes to make

when embracing LPO
By Danny Ertel

L
egal process outsourcing (LPO)
is a reality. Legal work is starting
to move from law firms to LPO
providers around the world. There
are those who prophesise the end of (large)
law firms and those who are just as certain
that this is all just a passing fad that will
surely be shown to be unsustainable, if not
unethical.
Given all of the noise, it seems worth
setting out a few relatively safe assertions,
and then building on those premises:
• LPO is today about repetitive, high-
volume tasks of low to medium complexity.
LPO providers are doing the kinds of things
for which many law firms have long relied
on paralegals, temp agency lawyers, or
junior associates. While there is some legal
research, contract summarisation, and
drafting, most of the work being carried out
by LPO providers today is document review
for litigation and work around the early
stages of patent clearance.
• In-house law departments are leading
the way in exploration and experimenta-
tion with LPO. Most law firm experience
is limited to serving a particular client
that has insisted on the use of a lower-cost
resource for some of the work. Even the
firms that have made the investment to set
up a captive service centre in a lower-cost
location (onshore or offshore) are currently
using those centres much more for back
office services than for legal work.
• The LPO industry is still relatively im- Although law firms certainly should are under pressure to become more efficient,
mature, populated by many small providers remain firmly in control of the to deliver value for their spend, and to work
that may not have significant staying higher-value level services, refusing with outside counsel who can help them not
power and that do not, in fact, offer the to dig into what LPO could or just meet today’s budget cuts, but to think
usual outsourcing benefits in terms of should mean for your practice is to more creatively and strategically about how
scale, technology investments, or process ignore what is happening in every to manage their legal and regulatory risks.
expertise. other part of the economy. They want you to understand that legal
• Lawyers will generally be unable to shed fees cannot continue to increase year after
responsibility for the quality of the work year after year.
carried out by the LPO provider, even when While the general counsel’s office was
the client has selected the provider and for a long time insulated from the pressures
foisted it on the law firm. Whether bound that Sourcing & Procurement have brought
by ethical or court rules, or simply because by studying things that have gone wrong, to bear on other parts of the organisation,
they value their reputation, law firms will let’s consider some of the mistakes law firms that is no longer the case. RFPs, preferred
have to take steps to assure the quality of make when they consider LPO. provider panels, and volume discounts
their client deliverables. for legal services have become a matter of
Many law firms are feeling pressure Failing to understand your clients course. Responding to a client’s question
from their clients to take a hard look at When a client asks (or demands) that about LPO with any kind of answer that
LPO and develop some kind of offering that the firm make use of an LPO provider for does not acknowledge the pressures clients
significantly reduces the cost to the client. high-volume, repetitive tasks, at least one are under to demonstrate that they are
That pressure is not going to go away. Hav- of the things they are asking is that you being responsible in how they spend their
ing been trained, like most lawyers, to learn show them that you understand that they budget just misses the boat.

22 | Outsourcing | July-August 2010

 Legal process outsourcing | Outsourcing

This mistake is at best a lost opportunity Grudgingly accepting LPO deliver high-quality legal representation to
to improve the relationship and address A common mistake many firms are making your client if you have been an active part
one of the inherent tensions between in- today is allowing clients to feel that they of the process of identifying what activities
house and outside counsel, and at worst a are twisting their lawyers’ arms to explore should be outsourced and defining criteria
confirmation of the client’s most negative LPO. If you are essentially “caving in” to for the selection of a provider (instead of
perceptions about the firm. client pressure to make use of the provider inheriting a selection that may have been
the client has vetted and selected, you will made primarily on the basis of price).
Ignoring LPO as an option certainly get no credit for any savings. But It is even easier to do a quality job and
Remaining uninformed and disengaged even if you get no credit when you “go get some credit for being responsive and
from discussions about what kinds of tasks along” with a client’s request to use an innovative if, when asked by a client about
should or should not be automated, del- LPO provider, you do not
egated, or even dispensed with altogether avoid the responsibility
is another common mistake. Although for their outputs. Like it
law firms certainly should remain firmly or not, ethical duty (and
in control of the higher-value level ser- in some cases, court rules)
vices, refusing to dig into what LPO could
or should mean for your practice, as if
requires that if you take
on the representation, Some law firm
absolutely every task could be done only you have to make partners are
by partners and associates of the firm, is
to ignore what is happening in every other
sure that the use of an
LPO provider does not convinced that,
part of the economy. diminish the quality whatever the firm
Clients have experience and comfort
with outsourcing a broad range of services
of the results.
It is easier to
does, it should own
throughout the corporation to providers obtain quality the delivery centre.
that can deliver quality at a lower cost; it is outputs from an
an increasingly hard sell that legal services LPO provider if
are, categorically and in their entirety, dif- you enter into
ferent. Rather than burying your head in the relationship
the sand and hoping it will just go away, in a collab-
a much better stance is one that is open to orative fashion
the discussion, perhaps even proactively rather than as
so, and that demonstrates knowledge of the result of
the available options and adds value in being coerced by
helping the client make informed choices your mutual client.
and manage the associated risks. It is much easier to

July-August 2010 | Outsourcing | 23

Outsourcing | Legal process outsourcing
Support service … LPO is
today about repetitive,
high-volume tasks of low to
medium complexity.
LPO, you can identify some providers with
whom you have already established a
relationship and perhaps even have run
some successful pilots.
Trying to appear as innovative
Using an LPO provider is not without risks.
Starting to use LPO providers without fully
understanding from an operational, regula-
tory/ethical, and economic perspective,
which activities should be done where and
by whom, is a mistake.
For example, sending document review
work to an Israeli law firm for US$150/hour
to be done by qualified lawyers may feel
safer than sending it to India or the Philip-
pines to be done by more junior staff, and
it may seem like a good deal compared to
what your own firm charges for document
review work. But what you charge clients
and what it costs you to have documents
24 | Outsourcing | July-August 2010
reviewed are two different things.
If you are ready to abandon your profit
margins on document review, one way to
lower your client’s costs is to outsource the
work and treat it as a disbursement. Another
way is simply to charge a lower rate for
doing that work internally. Whether or not
this is a good deal depends a lot on your
staffing model (would you use attorneys
or paralegals? Are your costs for those
resources mostly fixed or largely variable?)
and your utilisation rate at any given point
in time.
Similarly, it would be a mistake to entrust
client confidential materials to a provider
ill-equipped to protect those materials, or
whose hiring, training, and monitoring
practices do not give you sufficient com-
fort on the issue. With over a
hundred small, newly-
established providers
out there sharing
what is still a mod-
est amount of total
industry revenue,
it is unsafe to
assume that all
providers re-
ally are fully
capable of
deliver-
i n g
Ideally, a decision to use LPO should
be made strategically, more than just
enthusiastically.
quality outputs.
Ideally, a decision to use LPO should be
made strategically, more than just enthusi-
astically. How you use LPO in your practice
should fit with how you are positioning your
firm with your clients. For firms seeking
to focus on high-end advisory work, for
example, LPO could be one of several
options to consider when you discuss the
kinds of work you should (or should not)
be doing for them.
Other options would include helping
them become self-sufficient for some tasks,
or using quality regional or specialty firms.
On the other hand, if you are positioned as
a full-service firm, LPO could play a very
significant role as part of a portfolio of
services you provide, even as it raises ques-
tions about your leverage model and how
you recruit, hire, and train associates.
Thinking you have to ‘own it’
Some law firm partners are convinced that,
whatever the firm does, it should own the
delivery centre. Whether coming from fears
about quality control and confidentiality,
or from an optimistic view on the strategic
importance of such assets, the instinct to
build a captive is not an unreasonable one.
The mistake comes in thinking that owning
the facilities is the only way to address the
need to unbundle services, consider where
and by whom each piece should be done,
and assure that each is done well.
There are “best friends” relationships
or networks that can serve as good alter-
natives and don’t require a large capital
investment. There are providers that can
leverage economies of scale and process
expertise to deliver a reliable and more
flexible managed service and who do
so under fairly stringent service level
agreements. There are hybrid alternatives
that can capture many of the benefits of
both the captive and the outsourced model,
 Legal process outsourcing | Outsourcing

giving law firms some control over hiring,

for example, while still allowing them to
leverage a provider’s multiple locations for Many law firms are feeling
business continuity planning. pressure from their clients to
take a hard look at LPO and
Ignoring change management develop some kind of offering
challenge that significantly reduces the
In seeing how some firms have struggled to cost to the client.
make effective use of lower-cost resources,
whether their own or those of a third party,
we have noticed a common set of change
management challenges:
• Out of sight/out of mind: Partners
responsible for particular engagements tend
not to think of the offsite resources as readily
as they do the more familiar, locally based
resources.
• Resistance to the unfamiliar: Even
when they are reminded of such resources,
some partners resist relying on teams that
may be across the country or across the
globe, working in a different time zone,
who may communicate with a different
accent, or who may simply feel less under
their direct control.
• Failure to adopt new processes: When
the delivery centre is responsible for meeting
quick turn-around times and demanding
quality metrics, they tend in turn to require
from users some standard lead times and
specificity with regard to the task. Those
kinds of “form-filling” requirements often
feel counter-cultural, like something of a
bother to partners and senior associates.
• Lagging metrics and incentives: There
is huge variance among firms about what
is measured, what is reported to whom, and
what is rewarded (both formally, in terms of
compensation and promotion, and infor-
mally, in terms of status and praise from the
most influential partners). Many firms fail
to think carefully about what metrics and
incentive levers need to change to integrate
the use of LPO in their offerings.
The problem is not only one of partner
behaviour. The messages that the firm sends
about its commitment (or not) to the use of
alternative resources for low-complexity,
The LPO industry is still relatively
repetitive, high-volume tasks will impact immature, populated by many
how associates and other staff view those
resources, and whether they consider that
small providers that may not have
developing the skills and capabilities to significant staying power.
manage engagements that make use of
such resources is a good, or not-so-good,
career move.
to have passed an initial tipping point, there • What are the risks of waiting and
Climbing learning curve are still lots of moving parts. The answers learning from the mistakes of others?
This is certainly an interesting time to be may not be what you expect when you set • Should we focus across the firm, on the
practicing law in a large firm and there is no out to explore our options. “bottom 10%” (from a value perspec-
simple answer to the question of outsourcing 4. Consider the following issues: tive) of the activities we currently do,
legal processes. As you embark on a consider- • Which of our clients are likely to be or should we make narrower, practice-
ation of these issues, here are a few things to interested in LPO, for what categories specific choices?
keep in mind and questions to pose: of work? • Whatever choices we make, how do
1. Engage key stakeholders early: People • For that work, which specific tasks can we prepare our firm for the changes
respond much better to being included in be done substantially more efficiently required of us, if implementation
the consideration – even of things they may elsewhere, by others? of any such programme is to be
believe should not be done – than to being • What kind of quality assurance mech- successful?
excluded and surprised later. anisms do we need to meet or exceed
2. Define a path for your investigation: our current levels of accuracy?
What questions do you need to answer • What kind of ownership or contractual Danny Ertel is a founding partner of Vantage
first, second, third? What do you need to arrangements could support our busi- Partners. A spin-off of the Harvard Negotiation
validate right away and what can you ness and professional objectives? Project, Vantage Partners helps customers and
“wait and see?” • Is there value in moving quickly to providers enter into, manage, and remediate
3. Keep an open mind: Although we seem gain momentum and experience? working relationships.

July-August 2010 | Outsourcing | 25

Outsourcing | conversation
MDV:
The visionary financier
Since its foundation eight years ago,
Malaysia Debt Venture (MDV) has proven
time and time again that there is money to be
made from lending to the ICT, biotechnology
and other emerging technology sectors in
Malaysia.
While banks and other financiers were
shunning these growing sectors, MDV made
all the right turns to arrive where it is today.
With the current fund size of RM4.1 billion,
MDV acts not only as a financier for these
high growth sectors but also aim to be a
26 | Outsourcing | July-August 2010
development facilitator.
A fully owned subsidiary of the Ministry of
Finance, the agency received a big shot in the
arm when the government of Japan – through
Japan Bank for International Cooperation
(JBIC) – provided RM1.6 billion seed funding
to help facilitate its inception in 2002.
In this interview with the Outsourcing
magazine, its CEO Mohd Zubir Ansori Yahaya
explains why the organisation prides itself with
fast loan approvals and hassle-free processes
in various of its financial offerings.
What is the role of MDV?
One of our main objectives is to establish
a blueprint and prove that financing the
ICT industry can be a profitable busi-
ness – provided a proper methodology is
established.
We believe that funding is one of the
key challenges for any start-up or growing
companies, more so for the ICT-enabled
businesses.
At the same time, most banks are not
comfortable to fund such ICT-driven busi-
nesses due to the “fear of the unknown” – as
they are unable to measure the business
viability and success rate.
Banks have always been contented
on commercial lending based upon the
strength of a company, and the hard col-
laterals accompanying it. Hence, you will
find the banks to very excited in funding
the real estate, oil & gas, construction or
even in agriculture businesses due to the
solid collaterals. In their perspective, the
ICT businesses are still unable provide
them with a sense of security with regards
to their loans.
This was the main reason that the
government believed that we need to have
a proper and responsible financier to help
any ICT companies, provided that they
are incorporated in Malaysia, to carry on
with their projects as the country moves
up the value chain and position itself as a
services-based economy in future.
We also hope that our success will en-
courage other financial institutions in the
longer term to enhance their understanding
of the ICT industry and offer more of
their services to companies that have the
capability and potential to succeed, but
may not be able to meet the traditional
terms of lending.
Does MDV support start-up compa-
nies?
Absolutely. For us, a management’s track

record of a company is more important
than the entity’s history. We will consider
financing any company that has a strong
project or contract irrespective of its number
of years in operation or size. Beyond financ-
ing, we also extend Nurturing Services to
assist start-ups and SMEs to grow their busi-
ness and develop entrepreneurial skills.
How do you evaluate your clients?
As an innovative financier, we are always
looking at ways and methods to evaluate
ICT projects in order to reduce our failure
rate and NPLs.
For that MDV has devised its own due
diligence methodology, which looks at
five key areas – management, technical,
finance, collateral and legal.
In management due diligence, we don’t
really look into your balance sheet and
the assets but the focus would be on the
management skills of the company.
We also want to be able to measure
the ability and technical know-how of the
company. We make sure that there are right
processes in place to facilitate knowledge
and technology retention in the organi-
sation, even if initial key employees or
founders decide to call it quits in future.
The technical due diligence takes into
account whether the developed technolo-
gies has got other commercial opportunities
to capitalise on.
Also, the technology or solutions created
by these companies must be able to stand
the test of time and not get outdated too
quickly.
We do not require hard collateral such as
high-value fixed assets. We do also accept
Assignment of Contract Proceeds, Personal
Guarantees, Corporate Guarantees, As-
signment of Intellectual Property Rights,
Export Letters of Credit and Debentures as
collaterals.
Of the five factors in our due diligence,
the management and technical aspects
stand tall in our evaluation, the rest three
are the usual factors that are taken into
account by any other financier.
How different is MDV if compared to
a Venture Capitalist?
We are debt financiers. MDV does not take
up equity interest in the commercial entities
taking loans from it. Instead, its investment
is in the form of debt which is usually
structured as a term or revolving loan.
What are the payment terms imposed
by MDV for its customers?
MDV’s average cost of funds is 4.99%, while
we offer rates of between 6% and 8%. This
depends on the risk profile of the project.
However, one needs to understand that
we do not impose fixed payment schemes
for our clients unlike banks. In some cases,
we will even set aside the interest payment
during the project period. Basically, it will
not be “one size fits all” approach that
we take.
If your revenue kicks in only after eight
months of operation (based on the business
model), we will only enforce the repayment
after that period.
In the case of direct outsourcing con-
tracts, we will also facilitate the needed
funds based on the value of the secured
project.
As such, we ensure the repayments
are flexible according to the needs of the
customers and capacity to engage the
repayment process. We need to also make
sure that these clients are able to deliver the
goods in the secured projects. Only then, we
are assured of the repayments.
For us to be able to do this, we put in the
required efforts to understand more about
their business and secured projects.
Please tell us about the second fund
which was launched in 2008.
To recap, the first fund in 2002 actually
conversation | Outsourcing
In the case
of direct
outsourcing
contracts, we
will also facilitate
the needed
funds based on
the value of the
secured project.
came via the Japan Bank for International
Cooperation (JBIC) for the financing of
projects in ICT and biotechnology and other
high growth sectors in Malaysia. This initial
fund has been fully disbursed and also paid
back to JBIC, for that matter.
In 2008, MDV has been authorised by
the government to raise RM1.5 billion
for its second fund, which was sourced
locally through Islamic Medium Term Notes
Programme. With this, we are able to offer
our clients a syariah-compliant financing
programme – an alternative to our existing
conventional financing.
How much has MDV allocated for
biotechnology businesses through
this second fund?
For biotechnology, we have allocated
RM500 million worth of loans under this
new financing programme. The financing
facility, which is part of the RM1.5 billion
second fund, is intended for biotechnol-
ogy companies growing beyond the pre-
commercialisation stage, covering the
funding of the sector’s equipment and
infrastructure, working capital and received
projects or contracts.
The new financing programme is also
in line with the government’s National
Biotechnology Policy to utilise the country’s
wealth in biodiversity and providing a
conducive environment for biotech-driven
businesses to grow.
Biotechnology is still at its infancy
stage so this leaves much room for
opportunity to grow and grow it will, with
the right environment, assistance and
nurturing from the government. It is the
hope of MDV to be able to lend a hand in
creating a robust industry for biotechnol-
ogy.
It is expected that the biotechnology
industry can contribute to 5% of the GDP
by 2020. I do believe that we are moving
towards that direction.
July-August 2010 | Outsourcing | 27
Outsourcing | Government Sourcing

Governments & sourcing:

A controversy or
an opportunity?
By Bobby Varanasi

L
et me start with the positive news:
Way back in 2002, Thomas Healy,
Managing Partner for Government
Services with Accenture observed
that outsourcing by governments is the
fastest growing segment and is likely to
overtake commercial outsourcing through
double-digit growth estimates. The US federal
sector alone saw its outsourcing portfolio
grow by over 16% year-on-year since 2002,
and continues to do so. The myth that
governments cannot outsource is clearly
dispelled.
One of course would argue that it is
possible with capitalist economies like the US
and Western Europe to do so, but the fabrics
of developing nations are of a different
kind, and therefore outsourcing by such
governments is a lot more difficult. Having
said that, is it really so?
The establishment of quasi-governmental
organisations (known as GLCs in Malaysia-
speak) have been, and continue to be the
harbingers of growth for key economic
sectors in most developing nations, where
sufficient autonomy exists for such organisa-
tions to pursue business models that are
focused on value-creation. Also, the success
is measured by both commercial goals and
social goals.
Hence the argument remains – most
GLCs seem to have deployed a variety of
“partner” models to achieve successes and
growth. However this seems to have been
undertaken without indulging in aggressive
adoption of sourcing models – outsourcing,
shared services and other relevant models.
So the questions that beg answers are (a) why
then do governments need to even consider
outsourcing? and (b) are outsourcing and
partner models similar?
Governments globally in conscientious
economies have become very conscious
of the need to serve citizens better, put
tax-payer dollars to the utmost beneficial
use, and consequently improve services and
general quality of life for citizens. A holistic
goal, with a much-needed reality check, is
to determine how best to reduce investments
and operations of non-competitive public
services (like waste management, mail
services, public transport, road infrastructure
and others) without compromising on
the utility-value citizens derive from such
services.
On the other hand, a plethora of ICT solu-
tions available have created a significant
opportunity for governments to pursue
some additional goals, that of rationalising
tax-payer spend through reducing “mul-
tiplicity” of cost-oriented back office work,
while speeding up citizen access to existing
and new services, with a view to enhancing
quality of life, increasing citizen productivity
and consequently spurring GDP growth and
its consequent value accrual (measured as
an increased GNI per capita).
Of course with the advent, and adop-
tion of new technologies, one big question
remains unanswered – will technology
replace government human resources? More
often than not, in the western world it seems
to have. However developing nations have
neither the penchant nor the cultural abil-
ity to indulge in human resource-slashing
initiatives. This is the point where adoption
of sourcing models by governments seems
to have taken a back-stage.
Regulation vs. Outsourcing
A recent study compared two regimes. In the
regulation regime, a utilitarian government
decides to set up a regulated firm run by a
public manager. The government controls
the investment and production decisions
of the regulated firm (read GLCs) and is
therefore accountable for its profits and
losses. Such a combination of control rights
and accountability duties is typical of public
ownership. The government designs incen-
tive contracts to entice the firm’s manager,
who has private information about the firm’s
cost, to set the efficient level of production at
Viewing outsourcing in its restricted
state of just providing cost savings is
very limiting.
some informational cost.
In the outsourcing regime, a private
investor is invited to serve the market,
possibly in exchange for a franchise fee.
The private investor gains control and cash
flow rights on the outsourced activity, while
controlling the investment and production
decisions and therefore is fully accountable
for profits and losses.
As it is, the private firm is allowed to set
the laissez-faire monopoly prices. Yet, be-
cause laissez faire is not necessarily optimal,
the government can improve welfare by
offering ex post contracts to the private firm;
that is, once investment costs have been
sunk and uncertainties have been solved.
Ex post contracts are used by governments
to entice a private firm to reduce its prices
and increase sales.
They are designed to fight the deadweight
loss generated by monopoly pricing. How-
ever, to accept such ex post contracts, the
private investor must at least obtain laissez-
faire profit, which raises its participation
constraint to the scheme.
The right panel of Figure 1 illustrates this
point; the private firm’s profit under out-
sourcing (in blue) is everywhere larger than
the private monopoly profit (in green).
This goes to show that optimal outsourc-
ing contracts are more selective than the
contracts under public management; that
is, low-cost private firms are offered ex post
contracts that lead them to produce the regu-
lated outcome, whereas high-cost private

28 | Outsourcing | July-August 2010

 Government Sourcing | Outsourcing

Figure 1: firm’s profit under outsourcing (in Minister’s Office have clearly adopted out-
blue) is smaller than the public sourcing/sourcing for governments as the
Output Output manager’s rent under regulation most appropriate strategy to create citizen
(in red) for most cost parameters. value, while continually enabling the larger
0
Outsourcing hence generates pool of citizens.
II a positive fiscal effect because the This necessarily compliments various
m
government is able to terminate initiatives being currently undertaken by
II specialist agencies like The Malaysia Admin-
Q0 T
II
subsidies to those money-losing
Q
m projects and possibly to collect istrative Modernisation and Management
T
Q
a franchise fee from the private Planning Unit (MAMPU) and Malaysian
investor. Outsourcing also gener- Institute Of Microelectronic Systems (MI-
0
Cost parameter Cost parameter ates an economic surplus effect, MOS). Recently, I recently engaged in a
as production can be higher under long and positive conversation with Thillai
0

Red: Output and profit under regulation outsourcing than under a publicly Raj T. Ramanathan, CTO of MIMOS, who
Green: Laissez-faire managed firm. explained how his agency, through engag-
Blue: Outsourcing So much for the case of positive ing competent Malaysian Ph.D graduates
benefits with outsourcing, however, and researchers, transformed its citizen
firms are not. As a result the level of produc- has this been achieved elsewhere? Yes it has services.
tion under outsourcing is the maximum of been, closer to home in Singapore. Take the MIMOS has a portal which focuses on
the level of production under laissez-faire instance of “consolidation” strategy adopted providing a range of services – agriculture,
and regulation. The left panel of Figure 1 by right statutory boards – similar to Ma- health services, global connect etc – to all
illustrates this point by showing the output laysia’s parastatal agencies like Malaysian citizens at the click of a button. The devel-
levels under regulation (in red), laissez-faire Investment Development Authority (MIDA), opment of the portal has been a MIMOS
(in green) and outsourcing (in blue). Multimedia Development Corporation initiative; the services and information
This result is intuitive. At the contracting (MDeC) etc. offered for concerted decision-making comes
stage, the public manager of the regulated These boards were seen to have multiplic- from a host of private-sector sources (both
firm knows the cost parameter, whereas the ity with common services like procurement, local and global); the technology supporting
government does not. It takes advantage of human resource management, finance & these services is vendor-neutral (meaning
this information to obtain rents. To prevent accounting etc. In order to initiate inter- all technologies are being deployed); while
managers of low-cost firms from inflating ministry billing while reducing the overall the channel used is cloud computing and
their cost reports, the government must cost overheads, instill a commonality with free laptops distributed to citizens across the
reduce the output levels it asks to high-cost new technologies deployed, and remove nation. Is MIMOS the generator, aggregator,
firms. Incentive issues can be so harsh that redundancies across board the govern- outsourcer, vendor or provider? I would
the output levels of high-cost firms become ment decided it would be best to deploy a imagine it has become a combination of
smaller than the output levels that they shared service entity under the aegis of IDA all these roles. This is a positive case for
would achieve under laissez-faire. The left Singapore (a parastatal agency acting like bundled outsourcing with technology and
panel of Figure 1 illustrates this point by the Government CIO) where all services delivery models.
showing the firm with cost parameter β0 described above were consolidated. Viewing outsourcing in its restricted state
such that output is the same under regula- A host of benefits were achieved – workflow of providing cost-savings at the cost of jobs
tion and laissez-faire. optimisation, technology standardisation, re- is very limiting. It is vital that the private
There is no point to offer an ex post con- duced total cost of ownership with IT systems, sector engage with government entities
tract to a private firm with this cost because smooth and faster billing patterns, integrated in Malaysia, where conversations like the
its output level equals the government’s end-to-end citizen centric processes, outcome- above are undertaken. Mutual value is a
preferred output level. Ex post contracting driven policies, increased emphasis on talent consequence of citizen services, increased
and laissez-faire would yield the same management and risk management and productivity, higher Gross National Income
consumer and producer surpluses. Consider others. The consequent savings achieved were (GNI) per capita and competitive solutions
next a firm with a cost larger than β0. phenomenal – S$50 million (US$36.6m) per that can then be globalised. There is suf-
If the government proposes an ex post annum. The resultant model didn’t reflect ficient proof that outsourcing/ sourcing can
contract to this firm, it is unable to get any job losses. On the contrary, existing jobs be rigorously and successfully deployed in
a surplus larger than under laissez-faire were transformed as they moved into the Malaysia.
because incentive compatibility obliges it shared service entity. A host of private sector companies can
to distort its output downwards. This goes to further reinforce the fact that contribute to the effort. Such models can
Moreover, any transfer to this firm also sourcing models, correctly deployed, can then be taken to other developing nations
increases the add significant value while and replicated (with local flavours, of course)
rents of all firms remaining citizen-centric. so as to further enhance competitiveness
with lower costs. The most interesting aspect and happiness of citizens. Malaysia has
Because the Of course, with the advent of this model has been the the ability to make this transformation
government is and subsequent adoption enhanced ability of the happen with its government services, and
harmed by both of new technologies, one Singaporean government Malaysian companies can aptly contribute
effects, it offers no big question remains to proactively engage its to this effort. The emphasis being placed
by MDeC and Outsourcing Malaysia on
ex post contract citizens and respond to their
to firms with
unanswered – will needs nimbly and empa- this very aspect clearly reflects the need to
such large costs. technology replace thetically. rigorously create value, show quick-wins and
The govern- government human enable transformation in a manner that
ment thus has resources? Can this be replicated government services become competitive,
no obligation in Malaysia? citizen-centric and forward-looking.
to subsidise the Can this be done in Ma-
high-cost firms laysia? Absolutely yes.
Bobby Varanasi is the Head of Marketing &
under outsourc- The questions surrounding
Branding of Outsourcing Malaysia. He is also
ing, and ex- wherewithal, and willingness
the CEO of Matryzel Consulting.
pected transfers to adopt sourcing models is
to private firms passé. The recently completed
Brought to you by
are lower. In the right The National Key Economic Areas
Outsourcing Malaysia.
panel of Figure 1, the private (NKEA) Labs under the Prime

July-August 2010 | Outsourcing | 29

Outsourcing | e-learning
From Global to Local:
Increasing reach
By Deepali Sathe
of learning
g
lobal trends indicate that ac-
ceptance of e-learning is growing
at a faster rate than ever before.
The strange paradox is that while
the demand is growing, implementation is
lagging. Countries like the United States, the
United Kingdom, some European countries,
Canada and Australia, are way ahead
in terms of acceptance, pedagogy, and
implementation; there are others across
Asia and Africa that are still dealing with in-
frastructure issues and supply of e-learning
modules tailored to fit their requirements.
Learning has evolved significantly over
the last decade. Globalisation has influenced
the way it is understood and delivered.
Another primary reason for the evolution is
technology. The learning industry has been
one of the front-runners when it comes to
adopting technology and as learning moves
from classrooms into the virtual world, the
very definition has changed.
Some inherent training requirements
are that companies should be able to reach
out to employees that might be located
remotely, are on the move, are in multiple
locations, needing real-time inputs, without
interrupting work, etc.
Another hallmark of e-learning is in-
novation. The wide array of requests that
it can cater to is impressive. Here is an
example that amply proves the point.
Close to three million Canadians who stay
and work overseas can now make use of
ExpatCanada, an online social network-
ing and specialised education support
system. This was set up in response to the
huge demand for offshore networking and
education for expats.
The primary aim of this service is to
enhance competitive cultural and economic
advantages of the Canadian workforce.
Expats are educated on acceptable social
and professional mannerisms, options
available for food and medical help,
managing personal security, and being
more culturally sensitive. ExpatCanada
also enables personnel assessment tools,
collaborative e-learning, counseling and
mentoring programmes.
Learning in its new avatar
Which then brings us to the point of who
is capable of delivering on these different
parameters? And the answer quite obviously
is – the experts. These experts or e-learning
30 | Outsourcing | July-August 2010
providers, as they are otherwise
known, are companies that
specialise in creation of modules
as per client requirements, or
have products designed to cater
to specific needs, are subject
matter experts who completely
understand all aspects of any
vertical or horizontal.
They can guide companies
when it comes to learning best
practices; have all processes in
place for fast implementation and
can be depended upon for measur-
ing improvement, execution and
delivery.
E-learning provid-
ers offer different
services that may
comprise either
content or tech-
nology or both.
They work with
companies as part-
ners and are involved
right from training need
analysis to actual delivery
and evaluation. These cus-
tomised solutions are usually
long term engagements and are
aligned to strategy decisions. Off The learning
the shelf products are usually more industry has been
cost effective, but confined to very one of the front
specific and routine tasks. runners when it
Companies that outsourced comes to adopting
e-learning have found it to technology.
be effective, fast and
changes if needed,
are easier to
make. The
quality
o f
train- Companies have issues and reservations
i n g that service providers are sometimes unable
modules to sort.
has also
been found to Learning is much more than
be better as it is technical aspects
usually the experts that Our conversations with e-learning providers
a r e involved in developing the indicate that they find it extremely difficult
training programmes. Essentially it turns to convert opportunities into real deals.
out to be a better experience, considering While companies understand the need for e-
experts add a lot of value. The demand and learning, and are convinced that e-learning
the supply both seem to be in tandem. Yet will eventually help them, they are not very
that is not the case. As mentioned earlier, forthcoming when it comes to handing over
implementation is clearly falling behind. responsibility of training, more so when

the company and the e-learning provider
belong to different countries. While there
are a number of reasons for these deals not
going through, which include difference in
perspectives, cost, quality, scheduling etc.,
one that often gets overlooked is cultural
disparity. Learning needs to be user centric,
and if a user feels discomfort or disconnect
when applying it, likelihood of the company
opting for that training module is low.
Some of the aspects that need
attention are:
Localisation of content: If the learning
content is something that learners cannot
associate with, chances of them reacting
to it favourably are remote. Providers must
understand that in spite of globalisation,
content localisation is mandatory. To quote
a very simple example, a module that
tells a sales person in India about the new
features of a car, may not be very effective
if maximum speed is mentioned in ‘miles/
hour’, or talks about fuel efficiency in
‘gallons of gas’!
Audio content: Using audio instructions
to complement visuals is said to increase
the efficiency of the module and retention.
While this requirement is usually catered to,
it is important that the accent and language
are given due attention. An employee in
Australia may find it tough to decipher the
African accent.
The following example indicates how
accents are considered important when
learning languages:
The Japanese Embassy launched an e-Learning
facility in Makati City to help Filipinos looking
to learn the Japanese language.
This centre aims at improving teaching
capabilities and further the trade relations
between the two countries. The centre was
needed due to the relocation of the Japanese
Embassy.
Rather than use local teachers, the Embassy
preferred to have its course move to a technology
based platform to retain its success rate. Since
the caregivers were to be relocated to Japan, it
was important they understood the nuances of
the language completely.
Socio-political nuances: Being correct
politically and socially, literally, can make
or break any deal, and the situation is no
different in learning. A slightest lack of
understanding can create an unfavorable
opinion that can eliminate all chances
of entry. What may appear like a
small error actually reflects
the attention to detail,
and incorrect references
to something as mun-
dane as historical or
geographical details,
will only lead to one
thing ... out of the
door.
Technical issues:
Another impor-
tant aspect is cus-
e-learning | Outsourcing
tomising e-learning to a given geographic region that can help e-learning providers
region and the devices that are likely to be bridge the divide between demand and
used. A heavily loaded e-learning module supply. This along with careful scrutiny of
may not work in an environment where the market conditions, prevalent attitudes
Internet speeds are an issue. towards learning will help providers make
their presence felt. Such associations will
There are many more issues that need also take care of the language and accent
to be looked into before an e-learning issues.
company can successfully convince a buyer Though learning is like any other busi-
about the quality and efficiency of its system. ness, there are some stark differences too.
It is important that innovative methods be It revolves around strategic vision and
used to deliver value to buyers. decisions.
To tide over any challenge that may If e-learning providers display adequate
arise on account of cultural diversity, it is sensitivity when dealing with clients for
important that e-learning providers across whom outsourcing itself is a concern, much
the world sensitize themselves to these less than giving it out to someone who may
issues, and take steps to address them. not understand the finer and softer aspects
Cultural nuances play a huge role in learn- of delivery, they would definitely achieve
ing and this is one aspect that globalisation better success rates.
has not affected much. Learners continue
to stay strongly attached to their regional
and cultural ethos and probably even thrive Deepali Sathe is the Lead Analyst – eLearning
in them. at ValueNotes, a leading research and business
intelligence firm.
Partnering to enhance the local
flavour
One of the most effective methods for
e-learning providers to counter cultural
diversity is to enter into partnerships with
local companies or experts. These partner-
ships will add and enhance the local nu-
ances and themes adequately to increase
effectiveness of the course content. These
would not only help in dealing with the
differences, but also help in reaching out
to prospective clients.
Similarly local hires will bring
with them the intricacies of the
prevalent learning cultural
in a geographical
Cultural nuances
play a huge role in
learning and this
is one aspect that
globalisation has not
affected much.
July-August 2010 | Outsourcing | 31
 Outsourcing | survey
Global engineering R&D
market takes flight
A new study has found that the global market
for Engineering Research & Development
(ER&D) services sourcing has defied the
economic downturn. Demand from sectors
including computing systems, medical devices,
energy, and infrastructure is fueling the ER&D
market, and providers in emerging economies,
led by India, are poised to gain share as
multinational corporations seek to invest in
innovation and drive future growth.
Overall spending on ER&D increased 12%
from US$980 billion in 2008 to US$1.1 trillion
in 2009 and is expected to expand to US$1.4
trillion by 2020.
India remains a dominant player in the global
ER&D services market, with revenue growth
of more than 40% over the past three years
to US$8.3 billion in 2009 and expectations
of reaching US$40 billion to US$45 billion by
2020.
The study, “Global ER&D: Accelerating
Innovation with Indian Engineering”, was
conducted by management consulting
firm Booz & Company with India’s National
Association of Software and Services
Companies (NASSCOM).
The report sheds light on multinational
corporations’ perspectives on ER&D services
sourcing, growth trends in the Indian service
provider landscape, and competitive positioning
of emerging markets as sourcing destinations.
The joint report also examines and prioritises
11 key verticals for growth in the global
ER&D market. While automotive, consumer
electronics, and telecom – all traditionally high
spenders on ER&D – continue to lead ER&D
spend, emerging sectors include computing
systems, medical devices, energy, and
infrastructure.
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32 | Outsourcing | July-August 2010
China surpasses
India for
outsourcing:
KPMG
C
hina has replaced India
as the primary destination
of outsourcing and shared
services for Asia-Pacific
companies, KPMG revealed on July
14.
The KPMG survey, which covered
280 senior company executives
across Asia, showed that China’s
outsourcing and shared services are
rapidly expanding and winning
market share over India and other
regional destinations.
“Though at the moment the coun-
try has still not reached the level of
maturity seen in India, the growth
of China’s outsourcing market is sig-
nificant. Many Western companies
may still see India as their location of
choice, but for executives within Asia
Pacific the message is clear – China
is now leading the way,” said Edge
Zarrella, global head, IT Advisory,
KPMG China.
According to the survey, 42% of
the respondents said their companies
have set up one of their shared ser-
vices centers in China. With regard
to outsourcing, 41% said they have
a third-party outsourcing provider
in China.
Singapore stands second as a
popular location for shared services
at 29%, followed by India at 25%.
Figures from KPMG show that in
2007, China’s onshore and offshore
outsourcing market stood at only
US$7.5 billion. That amount nearly
tripled to US$20 billion last year, ac-
cording to the Ministry of Commerce.
By 2014, KPMG predicts that China’s
total outsourcing market will stand
at US$43.9 billion.
Moreover, shared services are also
expanding rapidly in China. The
survey finds that over 80% of senior
executives employ an outsourcing
strategy, shared services, or a com-
bination of the two.
Senior executives across the
Asia-Pacific also view China as the
preferred destination for setting up
shared services centers.
The survey also revealed low
labour costs as one of the reasons
for contracting outsourcing providers
(51% of respondents choose low
labour costs as the top factor), al-
though it is clear that this is far from
the sole determining factor.
In addition, when asked about
key factors used in determining the
location of their shared services cen-
tre, respondents once again cited
low labour costs, as well as language
capabilities (53% each).
According to Alan Fung, partner
of performance & technology, KPMG
China, senior executives should
be careful about making location
choices based on cost.
“They should take into consid-
eration the longer term needs of
their business and how employing
their outsourcing and shared ser-
vices approach can align with their
wider business growth strategy,”
he said.
The key rationale driving out-
sourcing strategies, Fung said, is no
longer just cost arbitrage.
Equally or even more important
is the need to ensure access to a
reliable supply of abundant and
skilled talent. Language, skills and
infrastructure are all critical.
 survey | Outsourcing

Cloudy future in store

S
ales of cloud services are expected
to jump 16.6% to $68.3 billion
this year and more than double to
US$148.8 billion by 2014, according
to a new study from researcher Gartner
called “Forecast: Public Cloud Services,
Worldwide and Regions, Industry Sectors,
2009-2014”.
Cloud computing refers to a utility-type
of computing model, where applications
and software are accessed over the Internet
and not owned by clients. Companies are
said to save huge costs on these products, as
they would not have to invest in purchasing
them.
“We are seeing an acceleration of adop-
tion of cloud computing and cloud services
among enterprises and an explosion of
supply-side activity as technology providers
maneuver to exploit the growing commer-
cial opportunity,” said Ben Pring, Gartner
research vice president.
“The scale of application deployments
is growing; multi-thousand-seat deals are
increasingly common,” he said.
Pring said that the imminent explosion
in cloud computing and cloud services is
closely tied to corporate examination of
spending.
“After many years of germination, most
notably in the SaaS arena, the core ideas
at the heart of cloud computing, such as
pay for use, multi-tenancy and external
services, appear to be resonating more
strongly,” he said.
“In part, this can be explained by
macroeconomic factors,” Pring said. “The
financial turbulence of the last 18 months
has meant every organisation has been
scrutinising every expenditure.”
Pring said cloud computing has become
more relevant as a material solution for
companies grappling to control costs associ-
ated with managing sprawling in house IT
infrastructures.
‘Affected’ regions
Gartner expects that sales of cloud comput-
ing technology and cloud services will
come largely from businesses in North
American and Europe in the next five
years, although other regions of the
world will experience growth.
The US share of the worldwide cloud
services market is expected to shrink over
the next five years, reducing from 60% in
2009 to 50% by 2014, Gartner said.
In 2010, Western Europe will account for
about 24% of the cloud services market and
Japan will generate 10% of the segment’s
sales. By 2014, the United Kingdom will
represent about 29% of the cloud services
market and Japan about 12%. high technology and the public sector.
Gartner expects the financial services Pring cautioned that while interest in
and manufacturing sectors to represent cloud computing is growing, many busi-
the largest pool of early adopters of cloud nesses still are concerned over key issues
services. Other industries involved with such as security, service availability, vendor
cloud services include communications, reliability and maturity.

Medical devices outsourcing Lower customer satisfaction

market set to touch US$42.6b
Medical device manufacturers at all
stages are face mounting pressures to
reduce costs, increase margins, while still
delivering product advancements, superior
quality, and excellent customer service.
Primary drivers for medical device
outsourcing include not only the growth
pattern of overall medical device mar-
ket, but also the extent to which device
manufacturers choose to outsource their
manufacturing and assembly opera-
tions.
Medical devices outsourcing market is
projected to reach about US$42.6 billion
by the year 2015, according to a research
by Global Industry Analysts.
The report titled “Medical Devices Out-
sourcing: A Global Strategic Business Report”
says that the growth in the market is
especially driven by factors such as rising
demand from device end market, an
increased interest exhibited by OEMs on
improving productivity and simplifying
supplying chain network, emergence of
one-stop shops, and ability of contract
manufacturing to slash costs, an added
impetus for adoption especially during
tough economic and financial climate.
Besides these advantages, medical
device outsourcing also allows OEMs to
direct efforts on specialised areas including
technology, R&D, marketing and sales.
Simplicity in implementation and low
costs are prime factors driving adoption of
medical device outsourcing by large and
small enterprises alike. Also, the rise in the
number and variety of vendor products/
offerings in this space will additionally
drive acceptance.
The current global economic slowdown
is also expected to encourage OEMs from
Europe and North America to tap labour
from low-cost destinations such as India
and China, which offer highly skilled
labour at relatively low cost.
Key players in this marketplace include
Accellent Inc, Advanced Scientifics Inc,
ATEK Medical, Avail Medical Products
Inc, Creganna Tactx Medical, Greatbatch
Inc, HCL’s Life Science, Heraeus Medi-
cal Components, Lake Region Medical,
Memry Corporation, Minnetronix Inc,
Sandvik Materials Technology GmbH,
Symmetry Medical, The MedTech Group
Inc, The Tech Group Inc, and TriVirix
International Inc, among others.
with CC poses threat: Avaya
Avaya, an enterprise communications
systems company, revealed that the
likelihood of businesses in Asia Pacific to lose
customers who are dissatisfied with their
contact centre interaction to the competition
in 2010 is as high as 47%.
Among dissatisfied respondents in
Malaysia, 52% said they are likely to
switch to a competitor, while another 7%
of respondents said they
have moved their business
elsewhere.
These figures come from
the annual Avaya Contact Centre Consumer
Index 2010 report generated by callcentres.
net and commissioned by Avaya.
It surveyed 1797 consumers in Australia,
New Zealand, Singapore, India, Malaysia and
Japan.
Respondents were asked about their
overall satisfaction with their last call to a
contact centre. A good 41% of Malaysian
respondents said they were satisfied while
9% said that they were dissatisfied.
Across the region, respondents who
did not feel strongly happy with their last
interaction with a contact centre blamed
poor customer service, the inability to resolve
their problem or because it took too long to
resolve their call.

July-August 2010 | Outsourcing | 33

Outsourcing | feature
The need for solid
governance model
This is the sixth in a series of excerpts from Atul Vashistha’s
book – ‘Globalisation Wisdom: The Seven Secrets of Great
Globalisers’
Outsourcing
By Atul
Vashistha
When I make presentations at client
conferences, I often ask this question:
What is the single largest factor contribut-
ing to the failure of services globalisation
initiatives?
The answers I receive range from
“lack of proper planning”, “supplier
incompetence” to “miscommunication”
to “internal resistance.” But in my ex-
perience, a great percentage of services
globalisation initiatives fail because of
the client organisation’s inadequate
attention to governance.
Governance usually gets a lot of at-
tention during the rollout period of the
initiative. It’s after steady state has been
reached and executives have moved on
to new initiatives that governance often
gets forgotten – though it’s as important
during steady state as it is any other time.
The most common problems that I’ve seen
plague services globalisation initiatives
post-rollout include a lack of executive
focus after the contract has been signed,
insufficient monitoring of performance
and deliverables, contract amnesia and
a loss of original objectives.
In the 1978 Superman movie, Chris-
topher Reeve’s Superman catches Lois
Lane mid-fall and says, “Easy Miss, I’ve
got you.”
“You’ve got me?” Lois exclaims, “Who’s
got you!”
The question can be all-too-familiar
in business, as everyone assumes that
someone else has assumed responsibility.
But in a services globalisation initiative, a
lack of direct monitoring of performance
and deliverables can lead to reduced qual-
ity and missed or misaligned expectations.
Even if a client organisation is monitoring
service levels, there are other performance
criteria such as attrition levels that are
critical to the continued success of the
initiative. Without direct monitoring, the
quality of service may suffer.
The successful governance model
34 | Outsourcing | July-August 2010
operates on three levels:
•  Organisational
•  Functional
•  Operational
The top tier in the pyramid reflects
organisational governance. At this level,
governance activities are primarily stra-
tegic and are engaged by the organisa-
tion’s senior leaders. Organisational
governance is where the big picture is
reconciled, where the firm’s business
case for globalisation is aligned with the
initiative itself.
This level of governance focuses on
achievement of strategic objectives
through ser vices globalisation and
monitors that progress. Lenovo’s former
CIO, Steve Bandrowczak, describes how
governance was structured at the organi-
sational level there.
“You’ve got to make services globalisa-
tion a business project and you’ve got
to make it where the business leaders
of all impacted functions are either on
the steering committee or part of the
regular executive update programme.
The worst thing you can do is make your
globalisation initiative an ‘IT or HR or
Finance programme’.
“You’ve got to have the programme
where it’s business-owned and business-
led, and you’ve got to get the business to
buy in.”
At the functional level, the role of the
governance group is to enable coordina-
tion, communication and control among
key stakeholders and functional leads.
Focus is on functional synergies and
coordination rather than day-to-day
management.
The operational level is the front line
of an initiative’s governance activities. across divisions or functional areas (refer
This is where individual contracts and to table, right).
relationships are managed. The op- At FedEx, tracking performance is
erational governance team is responsible a hallmark of the company’s success.
for monitoring the day-to-day activi- “Make sure you have a great tracking
ties within the initiative as well as for system,” Rob Carter, FedEx CIO told me.
reporting from-the-ground information “At FedEx, we use that data to make sure
to the functional and organisational we understand the variability in our
governance teams. business and to solve problems and to
Because the operational governance continuously improve the business.”
team is directly responsible for manag- Leading firms are using tools like
ing the initiative on a day-to-day basis, Oblicore, Enlighta, Digital Fuel or Jane-
large organisations may have several eva to report service levels and create
operational governance groups in place enhanced transparency.

Key Components of Governance Operating Model
Done and dusted … The
most common problems
plaguing services
globalisation initiatives
include a lack of executive
focus after the contract
has been signed.
Globalisation is
not just about IT
– it’s an enterprise
solution.
Activities Benefits
Performance
management • Analyse trends in
management
service lines (SLs)
• Reorganise work process
flow for offshore delivery
• Monitor continuous
performance improvement efforts
• Review workload distribution
across resources
• Recommend productivity
enhancements
• Perform monthly
operations reviews
Financial • Facilitate renegotiation of pricing
management model when triggered by volumes
management
• Validate one-time expense
allocations
•Help modify pricing model for
moving up the value chain • Improved global sourcing
Contract
Contract • Track adherence to SLs
management • Redefine SLs for relevance
management
• Review DR/BC planning and testing
• Review compliance with
insurance requirements
• Review HIPAA compliance and
data security
• Track volume levels for pricing
model triggers
• Monitor sufficiency of connectivity/
infrastructure
Relationship • Maintain vendor’s focus on client
management as “Client of Choice”
management
• Ensure continuity of clear organisation
escalation path on both sides
• Track issue logs and days to closure
• Clear up any cultural miscommunications
• Facilitate offshore-onsite interactions client and supplier
Resource • Review resource profiles for recruitment
management • Monitor on-boarding processes
management • Early on-the-job productivity
• Ensure smooth transition of key
resources
• Review attrition figures and
retention strategies
• Monitor skills/new process training
• Assist in employee recognition for future transitions, if any
feature | Outsourcing
• Early indications of problems
• Forecast of shift scheduling
• Maintain focus on quality
improvements
• Consistent performance levels
• Optimal utilisation of resources
• Implementation of global
delivery model
• Value for money, quality, flexibility
• Industry benchmarking of
market rates
• Proper utilisation of allotted
one-time costs
• Contract compliance
• Ensuring SLs are a true reflection
r
of vendor performance
• Recommend new SLs for
raising the bar
• Ensure planning for 24/7/365
operations
• Mitigate regulatory risk
• Achieve next level of economy
of scale globalisation
• Ensure offshore centre availability
• Vendor remains involved in
engagement at the executive level
• Avoid issue accumulation due to
executive-level changes
• Early issue resolution
• Seamless integration between
• “One Team” atmosphere
• Right resource for the right job
• Attrition management
• Project continuity
• Process-specific, not people-
specific delivery
• Knowledge management is built
• Prepare offshore for growth and
moving up the value chain
• Increase individual productivity
• Generate loyalty to engagement
July-August 2010 | Outsourcing | 35
Outsourcing | feature

In a services globalisation initiative, a lack

of direct monitoring of performance and
deliverables can lead to reduced quality
and missed or misaligned expectations.

Global Programme Manager’s Governance Activities

Governance area Activities

Performance management • Evolve a robust workflow and process for both organisations
• Focus on service levels in the contract that have a direct
bearing on success
• Focus on gap-closing processes
Financial management •Manage financial expectations in the contracting phase
• Prepare the client organisation and supplier to expand their
global engagement into other areas of the business
• Create awareness about unbudgeted expenses such as
resource transitions, turnover, cultural holidays, etc.
Contract management • Set up consistent compliance meetings as a regular
checkpoint for deliverables, unresolved issues, and service level In the end, the purpose
monitoring of governance is to
• Apply the terms of the contract from the beginning ensure that the goals
• Monitor adherence to contract terms set out for a services
globalisation initiative
Relationship management • Hand pick the user/IT staff
staf that forms the core team
are being met.
from those who have a positive stake in the success of the
globalisation initiative
• Build trust, relationships and effective partnerships over time
• Secure and check executive sponsorship throughout the
organisation
• Pro-actively manage issues so that they do not snowball
• Communicate regularly, especially during periods of transition
Resource management • Specify those key personnel in supplier organisation who
cannot be reassigned without prior client approval
• Prescribe a 10% resource buffer
• Allow 2 to 3 weeks of overlap to transition resources
• Agree on a process for the movement of personnel
• Oversee investment in both technical and process training and
management and professional training

(From previous page)

Programme Governance cess of the services globalisation

More often than not, Office
the reason these The lack of a single, unified man-
agement office is a leading cause
managed service of initiative failure, says Ron Kifer,
initiatives fail is Group VP and CIO at Applied
Materials. “More often than not,
because there is the reason these managed service
no single point of initiatives fail is because there is
no single point of contact for the
contact for the engagement – for vendor negotia-
engagement. tions, for vendor management, for
contract management.”
Ultimately, it is the Programme
Governance Office (PGO) that is
accountable for the ongoing suc-
initiative. That doesn’t mean that
the PGO has to bear the weight
of governance at all three layers
– instead, it means that the PGO is
where the proverbial buck stops.
“The PGO is key to long-term
success. Certainly it’s key in ne-
gotiations. You can’t have every
business leader in the negotiation
– there has to be a single point
of contact throughout the entire
process and then a single manage-
ment entity with responsibility
across the whole enterprise. This
is because globalisation is not just

36 | Outsourcing | July-August 2010


about IT –  it’s an enterprise solution,”
Kifer explains.
The PGO bears the ultimate responsi-
bility for ensuring that good governance
is being practiced within all three layers.
A successful PGO will do that by:
• Ensuring that accountable resources
are identified for individual programme
management and execution (expecta-
tions should be clearly outlined as well
as the consequences of failing to meet
responsibilities).
• Ensuring that schedules and plans are
synchronised for all project constituents.
• Ensuring that Client Business and
Operations groups are linked and syn-
chronised.
• Ensuring executive sponsorship, user
acceptance and buy-in throughout the
engagement.
While the Project Governance Office
is a part of the client organisation, a
successful programme manager will
assign a dedicated on-site manager (a
global project manager) to act as a liai-
son between the client and the supplier
organisations.
The global project manager may be a
direct employee of the client organisation
who relocates to the supplier country (the
do-it-yourself model), an employee of the
feature | Outsourcing
Going south … A great
percentage of services
globalisation initiatives
fail because of the client
organisation’s inadequate
attention to governance.
supplier’s or an independent local third-
party oversight organisation. Applied
Materials leverages Neo Group to help it
manage, monitor and improve IT supply
relationships.
In most cases, I recommend that client
organisations use an independent third-
party oversight organisation that is in the
same location as the supplier to act as
the global programme manager. I never
recommend that a client organisation rely
solely on the supplier for governance, and
the do-it-yourself model is usually only
effective when a client organisation has a
large presence in the location already and
can leverage economies of scale.
Whichever global programme man-
ager model is chosen, the best global
programme manager will understand
the cultural and business climate in the
supplier country and have experience
working with client and supplier organisa-
tions in global arrangements. Specifically,
a successful global programme manager
will have direct experience with and
knowledge of supplier methodologies as
well as an understanding of the client’s
business processes.
The table (left: “Global Programme
Manager’s Governance Activities”) details
the activities that a successful global
programme manager will undertake in
each governance area.
In the end, the purpose of governance is to
ensure that the goals set out for a services
globalisation initiative are being met.
Establishing a strong governance
model helps to ensure that globalisation
continues to be embraced and welcomed
as a transformation lever; that the lifecycle
is followed through; that business and
globalisation objectives are consistently
re-measured and realigned; and that the
best people stay on the job.
It is only with strong governance that
an organisation can secure the continued
success of its globalisation initiative.
Atul Vashistha is Chairman of Neo Advisory
(formerly neoIT), a leading management
consultancy since 1999, focused on inde-
pendent, objective and actionable advice
to enterprises that seek to transform their
organisations by capitalising on services
globalisation. His latest venture is BestOut-
sourcingJobs.com, an online job portal
focused on outsourcing careers. He can be
reached at atul@vashistha.com
July-August 2010 | Outsourcing | 37
Outsourcing | Management
Outsourcing
By Dr Arlyne
Diamond
Living colours:
Similarities and
differences in workplace
I
had dinner the other night with
an interesting couple, both of whom
have traveled the world on business.
They were: M as a CEO and his wife
E as first a salesperson and later a VC. Our
conversation ranged over a broad list of
topics, including that of the diversity of
people.
We agreed that the similarities between
people all over the world are far greater
than their differences. For example, almost
all of us came from our mother’s womb,
have five senses, need to eat and sleep
regularly, want and education and suc-
cess in life. When we grow up and have
children, we desire the same things for
them. We want our children to be happy,
prosperous and healthy.
Most of us are honest and ethical and
can be trusted to do what we promise to do.
Most of us play fair in life and in business
and expect the same of others. Most of us
are surprised and feel betrayed if the trust
we offer others is broken by their acts or
deeds.
Most of us want our governments to
be honest and ethical as well. We would
hope that they would protect us, not cause
us harm. When living in societies with
governments that cannot be trusted, we
live in fear and form our own sources of
protection.
Most of us have mediocre communica-
tion skills and poor understanding of where
others are coming from – and that’s the
cause of most misunderstandings and con-
flict between people. Here’s where some of
38 | Outsourcing | July-August 2010
Tug of war … Most
of us have mediocre
communication skills and
poor understanding of
where others are coming
from – and that’s the cause
of most misunderstandings
and conflict between
people.
the differences come in, in my opinion. We
anticipate and expect different things based
on our prior experiences and values coming
from our countries/cultures of origin.
So, let’s talk some about the differ-
ences.
Consider art for a moment. Have you
observed that there are great stylistic dif-
ferences in the paintings and drawings
from culture to culture. Many people
can immediately identify the country of
origin when looking at a work of art. How
about music? The sounds and rhythms are
different too, aren’t they.
We all know about the differences in
food and particularly the seasonings used.
Many of us love having such a variety
available in the cuisine of the world.
Clothing and style are of particular
In some parts of interest to me – and it is interesting to see
the styles and colours that are the native
the world students dress of cultures other than my own. It is
are expected to also fascinating to see how we here in the
USA adopt and adapt our styles incorporat-
recite the lesson, ing elements of those from other countries
memorise it and and how other parts of the world adapt to
western styles, particularly jeans.
never question. Think too about the way education
In others, is delivered. In some parts of the world
students are expected to recite the lesson,
questioning, being memorise it and never question. In others,
creative, looking at questioning, being creative, looking at new
ways to think and perform are encouraged.
new ways to think Do these differences produce different
and perform are business decisions? I think so.
Now, it is important to issue the dis-
encouraged. claimer. I am making a series of generalisa-
tions. I am not implying nor assuming that
 Management | Outsourcing

all people of any culture are the same. I am neither

stereotyping nor profiling. I am merely looking at
the overview from a few thousand feet, the statistical Standing tall … In some
average – the generalisation. countries women as executives
In business we also see some remarkable differ- and leaders are encouraged
ences, although now that the world is flat, we’ve and respected. In others it is
all adapted and taken best practices from other still rare.
cultures. But, look for a moment at the difference
in countries who tend to hire a large group of
students from the same school at the same time,
and have them all start at the same level, with the
expectation that they would all be promoted in the
same manner.
Compare this to a nationwide – or even world
wide selection of candidates, with only specific skills
considered and “at will” employment.
Is it OK to make a mistake? The Israeli VC
who spoke at a meeting I attended said that even
bankruptcy is acceptable, because risk is encour-
aged. However, in other countries, Singapore for
example, the demand for perfection is so high that
mistakes are to be feared – and thus experimenta-
tion and creativity are somewhat stifled. This too
is changing, I know.
What about the role of women in the workplace?
In some countries women as executives and leaders
are encouraged and respected. In others it is still
rare – and in some countries women are not even
allowed to teach, let alone be in the workplace
with men.
How about age differences? Here in Silicon
Valley, where I work and teach, youth are respected,
and although it is illegal to discriminate on the
basis of age, it is often done. In other countries, we
revere and respect the elderly.
All of these differences may seem trivial at first
reading, but think about how they create expecta-
tions and beliefs. Our family, neighbours, religion,
education, culture, climate, and country all frame
how we think people ought to behave, interact with
each other, react to authorities, and do business.
I have neighbours and clients who come from
Asian cultures and have been taught respect and
obedience to authorities. They dare not question,
disagree, or criticise. We, here in the West are seen as
rude and disrespectful. The same is true about speak-
ing up in meetings unless directly questioned.
In some cultures, business is done quickly and
immediately and any socialising is considered a
waste of time. In other cultures, especially in the
Asian cultures, it is critically important to have a
social relationship before business is considered.
The development of trust and understanding are
the honey that allows for the ultimate handshake
that cements the contract. Imagine the frustration
business leaders of each culture feel about the
behaviour of their counter-part in a completely
different type of culture.
Oh, and lest I forget – the most obvious and
conflicted differences come about when right
brain people (marketing, art and sales) try to
communicate with left brain people (IT, software
development and finance).
I believe most misunderstandings and conflict
come about due to different beliefs and expecta-
tions. We all need to learn how to understand where
the other person “is coming from”. Our personal In some cultures, business is
way is not the only right and good way. done quickly and immediately
and any socialising is
Dr ArLyne Diamond is an Organisational Development considered a waste of time.
and Human Resource Consultant with over 30 years
experience. She can be contacted at arlyne@diamondas-
sociates.net

July-August 2010 | Outsourcing | 39

Outsourcing | happenings
Badlisham … “Stakeholders’ input in
prioritising the evaluation criteria is a
very important step in the project.”
W
hat do MSC Malaysia-status
companies and camels have
in common? No, this is not
a trick question. A popular
misconception is that a camel’s hump
contains water. It actually stores fat to
convert into energy. As for MSC Malaysia-
status companies, they face the perception
in the market that their products are not of
superior quality. That is patently untrue.
This misconception is one of the biggest
challenges facing the MSC Malaysia-status
companies. Despite MSC Malaysia-status
companies generating almost RM5 billion
in revenue in 2008, of which RM2 billion
was from Malaysian-owned MSC Malaysia-
status companies, there is a frustrating
feeling of not being able to achieve their full
potential in the Malaysian market because
of this bias against their products.
Enter the soon-to-be introduced MSC
Malaysia Product Assessment and Ratings
Framework. This is an attempt by the
Multimedia Development Corp (MDeC)
to create a quality benchmark against
which MSC-status companies can measure
their products. It will have a robust set of
standards and tools that can stand up to
any scrutiny and testing for tech products.
MDeC is partnering TUV Rheinland,
a global provider of technical, safety and
certification services, to develop a com-
prehensive structure for the MSC Malaysia
Product Assessment and Rating Frame-
work. TUV Rheinland has many years of
experience providing certification for both
companies and products across Europe and
Asia and is one of the foremost certification
bodies in the world. MDeC will also be
working closely with various stakeholders
and relevant ministries and bodies such as
Standards Malaysia to further develop this
framework.
It will come as a surprise to most that
there are no present standards upon which
to benchmark and gauge quality standards
of tech company products. This is why
40 | Outsourcing | July-August 2010
MDeC to
introduce
product quality
assessment
framework
MDeC has partnered with TUV Rheinland.
The ultimate aim of this project is to promote
and implement quality standards in MSC
Malaysia products, thus reducing negative
perceptions about locally developed ICT
products.
However, this still does not ensure that
buyers will definitely purchase the products.
MDeC is well aware that the framework will
not be able to solve all the issues in terms
of marketability of a product, as there are
other contributing factors such as funding
and market access.
Project objectives
The main objective is to develop a frame-
work that enables an objective assessment
of various products developed by MSC
Malaysia status companies. This will have a
ripple effect of promoting the development
of higher quality products.
A set of user-friendly framework require-
ments will be developed to efficiently,
accurately and quickly assess, rate and if
necessary certify products made by MSC
Malaysia-status companies. They must
conform to international standards and be
globally recognised as a true measure of the
quality of an ICT product.
The benefit for potential buyers comes
in the form of pre-qualification quality
checks on the products, thus reducing the
time buyers have to spend on their own
assessment. The framework can also be
extended to assess any IT solutions buyers
intend to purchase.
For product and solutions developers
this opens up market opportunities by
having their products assessed and rated,
and identifying improvement opportunities
through the framework.
Workshop to explain objectives,
solicit ideas
MDeC conducted a one-day workshop
recently for external stakeholders from
various industries in Putrajaya to officially
kick off the development of the MSC Ma-
laysia Product Assessment and Ratings
Framework. The workshop was facilitated
by TUV Rheinland Malaysia Sdn Bhd. It
was designed to explain the objectives of
the project to MDeC’s external stakehold-
ers, as well as to obtain feedback from
participants.
About 50 external stakeholders were
present, including representatives from
software development companies, certifica-
tion bodies, government departments,
and software end-user industries such as
healthcare, agriculture, and education.
In general, participants agreed that
there is a need for this framework to be
developed.
One key issue that came up was the
acknowledgement that it was going to be
a challenge in finding a balance in terms
of the cost and the compliance to software-
related standards. It was noted that the more
requirements are being assessed, the higher
the cost of the evaluation. Participants felt it
was important to ensure that the framework
can provide an objective assessment of the
products and solutions and at the same time
be cost effective.
Responding to this, MDeC’s chief ex-
ecutive officer, Datuk Badlisham Ghazali
said stakeholders’ input in prioritising the
evaluation criteria is a very important step
in the project.
“Criteria and requirements need to be
analysed and prioritised in the framework
so that less time and cost are spent focusing
on evaluation criteria that are deemed to be
less important.
“We aim to ensure that the MSC Malaysia
Product Assessment and Rating Framework
is highly regarded and well accepted, not
just in Malaysia but internationally.”
Brought to you by Multimedia
Development Corp (MDeC)

Big Blue builds animation
Cloud for MDeC
I
BM and Multimedia
Development Corpora-
tion (MDeC) recently
announced the devel-
opment of Malaysia’s most
advanced cloud computing
animation centre, bolstering the country’s
fledging creative content industry.
Addressing the rapid increase in creative
content companies, both within and out-
side of MDeC and the increased demand
for rendering services, MDeC’s animation
cloud will provide centralised facilities and
programmes to help Malaysian animators,
visual effects artists and multimedia students
to bring their ideas to fruition in the digital
content space.
The new high performance cloud centre
supports multiple concurrent users, and is
accessible via the Internet for job submissions,
monitoring and management. With real-
Malaysians hold top posts in WITSA
Dato’ Dan E Khoo has been
re-elected as Chairman of WITSA
(the World Information Technol-
ogy and Services Alliance) for
a second two-year term. The
PIKOM (National ICT Associa-
tion Of Malaysia) candidate will
serve the alliance, which is a
consortium of 70 information
technology (IT) industry associa-
tions from economies around the
world till May 20, 2012.
Although up against dis-
tinguished candidate Dr Jorge Khoo … re‐elected as
Cassino of Argentina, Khoo’s Chairman of WITSA.
re‐election comes as no surprise
to some industry watchers as he had ably tion (ASOCIO).
demonstrated his leadership with the success-
ful organisation of WCIT 2008 (WITSA’s 16th chairman of PIKOM, was appointed to chair
World Congress on Information Technology the Global Trade Committee to spearhead ICT
2008) in Kuala Lumpur in May 2008. trade among member economies of WITSA.
Sunway E-Systems and NetSuite inks deal
Sunway Group’s subsidiary Sunway E-
Systems has signed a contract with Net-
Suite to distribute, resell, implement and
support the US-based company’s cloud
computing business management suites in
Malaysia.
The partnership also gave Sunway E-
Systems an immediate presence in the rapidly
expanding cloud computing industry, as
well as formidable line-up of cloud business
management solutions, the company said
in a statement.
“As an exclusive distributor in Malaysia,
Sunway E-Systems will build and directly
time testing, the facility is able
to perform rendering jobs – a
critical part of creative content
production and animation – up
to 8 times faster compared to ren-
dering on a local workstation.
The facility frees creative content compa-
nies from the burden of having to outlay a
lot of money to install their own rendering
systems or pay hefty sums to private service
providers.
The high performance cloud rendering fa-
cility includes IBM’s hardware, software, and
cloud computing and consulting services.
The centre will facilitate the creation of
creative content by local creative content
companies and enhance the work of creative
companies by reducing the rendering in-
house production time and to produce high
quality images for computer-generated
content.
The event was declared by
WITSA as the best ever in its
30-year history with more than
3,313 delegates registered and
42,659 expo visitors from 92
countries.
WCIT 2008 also raised over
US$11 million in sponsorships,
the most in the history of the
World Congress.
WITSA also announced the
appointment of Looi Kien Leong,
a PIKOM advisor, to the Board for
a two-year period. Looi is also the
President of the Asian-Oceanian
Computing Industry Organisa-
In addition, David Wong Nan Fay, an ex-
manage a network of resellers, partners
and integrators in the three-tiered structure
designed for the Malaysian marketplace,”
it said.
Sunway E-Systems said through the part-
nership, the company would also be able to
capitalise on the growing regional trend for
resellers and systems integrators to move
customers to the cloud.
The company said it planned to extend its
regional distribution network in South-East
Asia as a non-exclusive NetSuite distributor
for Thailand, Singapore, Indonesia and
Vietnam going forward.
happenings | Outsourcing
MIDA hosts seminar
for outsourcing
opportunities
The Malaysian Investment
Development Authority (MIDA) held
a seminar and networking sessions
for outsourcing opportunities on July
27-28.


Themed “Driving Growth
Through Innovation and Creativity”,
the event was held at the Persada
Johor International Convention
Centre in Johor Baru, Malaysia.


The seminar focused on
machinery and equipment, oil and
gas, medical devices and electronics
industries.
Held for the second consecutive
year, the seminar provided the latest
updates on government policies,
incentives, facilities and support
services available to the business
community.


Besides, the participants were
also provided an opportunity to
network with local and foreign
businesses, universities and key
government agencies and exchange
ideas on innovation and creativity to
drive further growth.
KRU and Crest take
the Ribbit way
Malaysia’s KRU Studios recently
announced its collaboration with
India’s Crest Animation Studios
(Crest) on the co-production of its
3D animated feature film entitled
Ribbit.
Ribbit – with a production
budget estimated at US$25 million,
according to sources – tells the
tale of a frog named Ribbit with an
identity crisis.
Norman Abdul Halim, Executive
President of KRU Studios and
Executive Producer of Ribbit, said,
“This collaboration marks KRU
Studios’ maiden voyage into the full
feature animation arena – a natural
progression following our expertise
in CGI and special effects.
“Filled with colourful characters
and witty dialogue, Ribbit is feature
film that is set to entertain audiences
of all ages around the globe,” he
said.
AK Madhavan, CEO of Crest
Animation Studios Limited said,
“Crest is thrilled to be part of this
exciting project as we believe that
Ribbit is a unique one-of-a-kind
venture and will redefine the
boundaries of animation to come
out of Asia. We are honoured to be
partnering KRU Studios which has
proved itself to be an innovative and
progressive company.”
July-August 2010 | Outsourcing | 41
 ADFEATURE
AYSIA

MAL
CING
SOUR

OUT
JOIN
OUTSOURCING MALAYSIA (OM) is an
initiative of the outsourcing industry and
a chapter of PIKOM – the National ICT
Association. The prime objective of this
organisation is to enhance global visibility
of Malaysian service provider capabilities to
the global buyers. OM focuses on enabling
both buyers and providers of services to
work together on addressing service needs,
within the aegis of global best practices and
competencies.
Officiated by the Prime Minister in 2006,
OM aims to represent 80% of all Malaysian
outsourcing providers by 2012.
Highlights of the benefits our
members are enjoying are:
Industry
Representation
OM represents the local outsourcing industry
to the Govt and private sector both locally
and overseas. OM is backed by the support
of its founding partner MDeC, and consulted
by a large number of organisations such as
MATRADE, PSDC, Bank Negara Malaysia etc.
Trade
Promotions
• Marketing the capabilities of Malaysian
industry to local and global buyers through
various trade events, while generating
business leads for members.
For more information, please visit our website at: www.outsourcingmalaysia.org.my
Contact: OM Secretariat
1106 Block B, Phileo Damansara 2, No 15 Jalan 16/11, 46350 Petaling Jaya, Selangor, Malaysia.
Tel: +603 7955 2922 Fax: +603 7955 2933 e-mail: info@outsourcingmalaysia.org.my
Outsourcing-AD.indd 20
• Providing business-networking
opportunities for members through
networking sessions, inbound and outbound
trade missions and industry meets.
Industry
Information
 priorities are allocated for participations of
• Providing forum for members to debate
important industry issues and promoting
conducive business environment through
appropriate government policies for the
industry.
• Regular
egular Thought Leadership brainstorming
sessions.
• Access to OM’s Thought Leadership
content via Member’s Login on its website.
Business
Exposure
• Providing members with tremendous
business exposure and visibility through the
complimentary listing via OM website and
overseas campaigns.
• OM as the direct contact point for global
buyers.
• Affiliations with global outsourcing focus
publication such as the Black Book of
Outsourcing Global Vendor Directory, Forbes
etc.
Priority,
Subsidies
&
Discounts
OM Members are given priority in OM-
organised events in terms of reservations,
subsidies and discounts. Members are
provided subsidies on Overseas Campaigns
and other Capacity Development
Programmes. Discounts and complimentary
seminars, conferences, cocktails, industry
talks, surveys, and media promotions.
Capacity
Development

Programmes
OM is responsible in introducing the
International Association of Outsourcing
Professionals (IAOP) Certified Outsourcing
Professionals (COP) and Master Class
programmes; and working alongside with
MDeC on their K-Workers Development
Institute (KDI) programmes designed to
develop the human resources of the
industry.
Global
Membership
and
Affiliation
Global
Membership:
• Sourcing Interest Group (SIG).
• IAOP through partnership with MDeC.
Global
Affiliations
Through PIKOM’s partnership and
membership:
• ASOCIO • NASSCOM • WITSA
8/5/10 8:35:59 PM

APAC Service Outsourcing International
Conference in Wuxi
T
he International Institute
for Outsource Management –
China (IIOM-China) with the
partnership of Wuxi Municipal
Government, will be organising the 2010
Asia Pacific Service Outsourcing Interna-
tional Conference (APOIC) from Sept 10-16
in Wuxi, Jiangsu.
The event themed: ““Leverage the
Global Experience to Insurance the Future
of Outsourcing in China” aspires to serve
as a strong bridge between the buyer and
the seller of outsourcing services.
The conference will bring together some
of the leading minds in the outsourcing
arena with the intent of address the chal-
lenges in the sourcing industry.
Egypt grabs top honours at Euro awards
Egypt was awarded the title of “Offshor-
ing Destination of the Year” at the 2010
European Outsourcing Association Awards
held in Brussels early July.
Dr. Hazem Abdelazim, CEO of Egypt’s
Information Technology Industry Develop-
ment Agency (ITIDA) received the award
on behalf of the country during a ceremony
held at the Chateau Du Lac, Brussels.
More than 100 high-level executives
and outsourcing professionals attended
this inaugural ceremony, hosted by the Eu-
ropean Outsourcing Association (EOA).
According to the judges, Egypt won the
award because of its language skills, young
population and growing list of global
sourcing investments. It has soared in the
MOL partners with Facebook
MOL Global announced a strategic part-
nership with Facebook that will make it
significantly easier and more convenient for
millions of people across Asia to purchase
virtual goods in online games and applica-
tions on Facebook.
Under the agreement, MOL Global’s
wholly owned subsidiary MOL AccessPortal
will become a payment provider for Facebook
Credits. That will enable Facebook members
to buy Credits using MOLPoints on Facebook
and on MOL’s website, MOL.Com.
In the coming months, Facebook users will
be able to obtain Facebook Credits using MOL
points purchased through MOL’s network of
more than 500,000 outlets, which are mainly
NASSCOM signs MOU with Delhi University
India’s National Association of Software
and Services Companies (NASSCOM) and
Delhi University has signed a Memorandum
of Understanding for the launch of the Global
Business Foundation Skills course.
The programme that has been designed
With the broad-based development
of China’s ITO and BPO sectors and with
continuous governmental support for these
pillars of the Chinese economy, the APOIC
2010 is positioned by the organisers as an
platform not only for its professional and
technical significance, but as an important
government initiative to enhance interna-
tional cooperation between foreign coun-
tries and China in the fields of outsourcing
and software/IT development.
With the direct sponsorship by the
People’s Government of Wuxi Municipality,
the conference provides an unique chance
to interact with various types of parties and
candidates, such as Chinese companies,
service vendors, and relevant research
popularity stakes in the last few years as
an offshore destination for Europe.
Commenting on the achievement, Dr.
Tarek Kamel, Minister of Communications
and Information Technology said: “This
award recognises the outstanding progress
Egypt has made in the last year as a global
outsourcing destination.
“The country’s credibility is going from
strength to strength amongst European
companies and has put its mark on the
map of favoured global services locations.
We recognise the increasing role that Egypt
can play in the fast-paced global ICT
industry and we are advancing steadily on
the way to position the country as a hub for
IT innovation and entrepreneurship.”
in Malaysia, Singapore, Indonesia,
Philippines, Thailand, India, Australia
and New Zealand.
In addition to outlets such as 7-Eleven
stores and cybercafes, customers will
be able to purchase Credits through
MOL’s network of online banks in these
countries.
by NASSCOM with contributions from large
BPO member companies like Genpact,
Accenture, Convergys, Deloitte, Dell and IBM,
is expected to help hone the skills of students
who want to take up employment with the
outsourcing industry. The programme will
happenings | Outsourcing
institutions.
As the most prospective service outsourc-
ing destination in East China, Wuxi was
officially approved by the State Council
as China’s service outsourcing model city
at the beginning of 2009 and successfully
edges into the top three of all the twenty
model cities in China. In 2009, the offshore
contract amount reached US$1.38 bil-
lion, accounting for 14.4% of the national
total.
IIOM China is one of the seven regional
offices branches of the International Insti-
tute of Outsource Management.
For more info on the event, please email
Angela at angela.lj@iiomchina.org
Slasscom out to boost
BPO industry
The Sri Lanka Association of
Software and Service Companies
(SLASSCOM) has partnered with
the Association of Accounting
Technicians of Sri Lanka (AAT) to
jointly drive capacity building in
accounting and finance to cater to the
rapidly growing BPO industry in Sri
Lanka. A mutual agreement between
the two entities was established to
collaborate in promoting Sri Lanka
as a global sourcing destination for
finance and accounting BPOs and
to increase the number of qualified
accounting and finance professionals
in the country.
President AAT Sri Lanka T.
Dharmarajah said: “The purpose of
this MoU is to develop academic and
educational cooperation and promote
mutual understanding between the
two organisations, thereby jointly
promoting accounting, BPO and IT as
a preferred career choice among the
student population and the business
community with a view to increase
the number of qualified accounting
professionals suitable to serve BPO
organisations.”
AAT Sri Lanka was established
in 1987, on the initiative of the
Institute of Chartered Accountants
of Sri Lanka (ICASL) with the primary
objective of producing accounting
technicians for the private and public
sector.
be deployed as an “Add-on” programme for
undergraduate students across universities.
The Global Business Foundation Skills
course (Add-On) will be available to all final
year students across streams on a ‘first-
come-first-serve’ basis.
July-August 2010 | Outsourcing | 43
Outsourcing | light takes

When the going

gets tough, the Diddy to outsource
tough gets going!
Sean Jean manufacturing
“It is only through work According to a report in New York Post
and strife that either on July 9, Diddy will soon begin outsourcing
nation or individual the manufacturing of his Sean John clothing
moves on to greatness. line. The move comes after the music mogul
The great man is always completed a major exclusive distribution
the man of mighty effort, deal with Macy’s recently.
and usually the man Sean John representatives had confirmed
whom grinding need the deal, explaining that the contracting
has trained to mighty of overseas manufacturers would now be
effort.” handled by LF USA, a unit of Li & Fung, an
– Theodore Roosevelt export trading company with headquarters
in Hong Kong.
One industry insider referred to the
“I didn’t fail the test, I business move as “a next step in expensive
just found 100 ways to reduction as they (Sean John) struggle to
do it wrong.” remain in the black”, adding that: “Puffy
– Benjamin Franklin has not been spending any time in the
business. The only category doing well is
“Failure fragrance.”
is a word However, a Sean John spokesman sought
unknown to to quash speculation that the moves were more on its strengths in marketing under
me.” an indication of recent weakness in the CEO Dawn Robertson, a veteran of Gap’s
– Muhammad Ali business. Old Navy chain.
Jinnah (pix) “The design group is not being out- “The promotion is not being outsourced
sourced,” the spokesman said, adding that and the production is not being outsourced,”
the switch would allow Sean John to focus the spokesman added.
“Spirit ... has
fifty times
the strength
and staying power of
brawn and muscle.”
– Unknown BPO centre for
“Success is never final,
failure is never fatal.”
disabled in Bangalore
– Unknown Not-for-profit organisation the of Personnel and Public Grievances.
Samarthanam Trust has set up a contact The training centre and contact centre
“America was not centre training group for disabled people in facilities will be accessible to disabled youth,
built on fear. America the Indian BPO (Business Process Outsourc- accommodating around 300 people per
was built on courage, ing) hub of Bangalore. year across the state of Karnataka.
on imagination The group, Samarthanam ‘Shristi’, aims “At a time, we can train 75 candidates.
and an unbeatable to create a corporate training environment This will include persons with varying
determination to do the in BPO and call operations to disabled levels of disability, and we will tie up with
job at hand.” youth. The group has been initiated in several corporates to get them placed,” says
– Harry S. Truman association with the Department of Welfare Swaroopa Venkatesh, Communications
of the Disabled and Senior Citizens, the Manager, Samarthanam Trust for the
“The season of failure is government of Karnataka and the Ministry Disabled.
the best time for sowing
the seeds of success.”

Kiwi prisoners’
– Paramahansa Yogananda

“Continuous effort, not

strength or intelligence,
is the key to unlocking
our potential.”
crime calls to London
Inmates at New Zealand’s Invercargill
– Liane Cardes
Prison will soon be able to report crime
from within jail through the Crimestoppers
“Restlessness is phone line, but their call will be answered
discontent – and in London.
discontent is the first The Southland Times reported that the
necessity of progress. Crimestoppers phone line will start at the
Show me a thoroughly Invercargill Prison as part of a nationwide
satisfied man – and I will rollout and calls will be free from prisoner
show you a failure.” payphones and exempt from the normal
– Thomas Alva Edison telephone monitoring. It replaces an in-
house system previously operated by the
Corrections Department.
Crimestoppers NZ chief executive
Lou Gardiner said setting up the con-
tact centre overseas helped boost the
promise of anonymity for the caller, par-
ticularly in a country as small as New
Zealand.
Gardiner said a large amount of infor-
mation had been sent to the UK covering a
wide range of New Zealand-based scenarios
and he was confident the call takers would
be suitably equipped.

44 | Outsourcing | July-August 2010

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