ExploringGlobalFrontiers - KPMG

PenangCity Introduction•Penang,alsoreferredtoas“ThePearloftheOrient”liesoffthenorthwesterncoastofPeninsularMalaysia•Itisabustlingport,aheritagecityandanindustrialbase.Quick factsGeographicLocationTime Zone GMT +0800ClimatePopulation 1 1,469,000Literacy rate 2LanguagesMajor industriesSituated by the Strait of Malacca, Penang is a 50 minuteflight away from Kuala LumpurWarm equatorial climate, with no distinct seasons. Theaverage temperature is maximum 31 and minimum 23degrees Celsius. The annual rainfall ranges between 200and 250 cm88 percentSources: 1 Tourism Penang (2007);2 Gartner (2007)English, Bahasa Melayu, Chinese, Tamil, Telugu, MalayalamManufacturing, Construction, Logistics, Tourism, RetailOther sources: Tourism Penang website, Penang Development Corporation websiteKey drivers for the city to emerge as a favorable IT-BPOdestination• The Government has a strong focus on promoting the IT-BPOindustry in Penang through initiatives such as Invest Penang,expanding the Multimedia Super Corridor (MSC) to Penang, andcreating the Software Consortium of Penang (SCoPe)• There is a talent pool of skilled English speaking developers ofmany different nationalities available in Penang, making it suitedfor multi-lingual service delivery• Although the potential to scale is limited, the talent pool is suitedto offer higher-end, relatively less scale-dependent IT-BPOservices, especially in areas such as financial services, logistics,energy and pharmaceuticals• Penang is also developing as a hub for outsourcing of Islamicbanking services, especially by banks in the Middle-East 2• Significant investments are planned to upgrade the existinginfrastructure in the city• Penang has strong engineering and manufacturing base, which canbe leveraged to offer services in these sectors.Current IT-BPO scenario in the city Development of the current IT-BPO industry 1Key IT-BPO companies (Services offered)IBM (IT services)Intel (Design center)Ideal Capital (BPOservices) Motorola (Research anddevelopment services)•PenangwasthefirststateinMalaysiatobeofficiallygrantedtheCybercitystatusinJanuary2003•Oneaspectofthesecondphaseofitsexpansionplan(2004–2010),includedtherolloutoftheMultimediaSuperCorridor(MSC)inPenang.Thishasgiventhesoftwareindustryinthestateasignificantboost•SeveralcompanieshavestrengthenedtheirpresenceinPenangthroughpartnershipswithlocalsmallandmediumenterprises,therebydrivinggrowthinthesector.Industry Profile – Size and SpecificsMoBif (BPO services)Citicorp (Transactionservices)•ThecombinedIT-BPOexportsofthecityareestimatedatUSD564millionin2007 2•InMarch2008,therewere146MSCstatuscompaniesinPenang,ofwhich81wereinSources: Company websites of IBM, Intel, Motorola, Citigroup;Call center directory, The Star articlesoftwareandsharedservicesoutsourcing 2•Thereareabout20,500professionalsemployedintheIT-BPOsectorinPenang 2•Companiesarepredominantlyengagedinenterpriseapplicationservices.However,otherservicessuchasinternetsurveillance,customerrelationshipmanagement,animationande-solutions,andpharmaceuticalservicesarealsoprovidedfromthecity.1 InvestPenang.gov.my, December 20082 www.outsourcingmalaysia.org.my, December 200867©2009KPMGInternationalisaSwisscooperative.MemberfirmsoftheKPMGnetworkofindependentfirmsareaffiliatedwithKPMGInternational.KPMGInternationalprovidesnoclientservices.NomemberfirmhasanyauthoritytoobligateorbindKPMGInternationaloranyothermemberfirmvis-à-visthirdparties,nordoesKPMGInternationalhaveanysuchauthoritytoobligateorbindanymemberfirm.Allrightsreserved.KPMGandtheKPMGlogoareregisteredtrademarksofKPMGInternational.