The outlook for the local shared services and outsourcing (SSO) industry, an up-and-coming segment of the information and communications technology (ICT) sector in Malaysia, is looking bright for 2005.

However, local players have yet to make a significant mark in the market, which is projected by International Data Corp (IDC) to grow at 27 per cent over the next five years.

According to the Association of the Computer and Multimedia Industry Malaysia (Pikom)'s shared services committee chairman David Wong Nam Fay, a majority of the large ICT outsourcing projects are currently captured by major foreign players such as IBM and EDS.

He said local players should from strategic alliance with the latter to tap into their customer base and take the opportunity to learn.

"As SSO is a fairly new industry in Malaysia, many local players are still on the learning curve, and  I believe they will grow to be formidable players if given the opportunities over time," said Wong.

At the same time, he said local players should focus not only on the local market for business but market for business but also on foreign multinational companies (MNCs) that are relocating their shared services centres to Malaysia. This, he added, is an area where Pikom and Multimedia Development Corporation (MCD) intend to improve and facilities.

Pikom and MDC have also roped in Malaysia Debt Ventures (MDV) as tripartite to build up the industry.

"Currently, most SSO services are in-sourcing work - where MNCs run their own shared services centres. There is only a handful of local players who are offering outsourcing services. One key area the tripartite is focusing on is to create awareness and grow the number of local outsourcers through branding activities, international roadshows and seminars," said Wong.

Ongoing efforts include a survey on local outsourcers which is expected to provide input for more effective international marketing and branding.

"Local players are expected to benefit from these initiatives through cost savings, demand generation, increased awareness and increased revenues," Wong said.

On IDC's projection, he said it is achievable with contact centres; data accounting and financial  business process outsourcing and financial business process outsourcing (BPO) services; and supply chain and logistics as specific areas expected to enjoy strong growth this year.

This, he said, is based on strong Government support particularly through MDC, increased number of local corporations embarking in outsourcing, and increased awareness of SSO through conferences, media publicity and industry events.

As for Pikom's own plans, Wong said the association is committed to build the SSO industry.

"Some of the plans include dialogue and close collaboration with Government-linked companies to outsource, building industry awareness among users and service providers. We are also planning to facilitate the creation of more local outsourcers, human recource development, and export promotion of SSO services."