Small Office/Home Office (SoHo)

By the Star

CB Richard Ellis Malaysia Sdn Bhd managing director Allan Soo says the typical SoHo buyer are mostly independent individuals rather than professionals.

“This can be advertising agencies or those within the IT industry.”

Soo says the location of the SoHo is critical.

“It definitely makes sense to work in the city within a business environment and having your business partners nearby. If it’s going to be a hassle for your clients to come to you, than it does not make sense.”

Zerin Properties chief executive officer Previndran Singhe concurs that the location of the SoHo is very important.

“You need to be around amenities. Otherwise it’s going to be tough! But ultimately, it all depends on both the product and the location of the property.”

Wong, however, reckons that a SoHo buyer would be more comfortable working outside of the city centre.

“The whole idea of living and working in the same environment is so that you can avoid the hassle of getting stuck in traffic jams when travelling to your place of work.

“People who operate out of a SoHo would most likely prefer a quiet environment rather than to be smack in the middle of the city centre and dealing with the noise. The ideal location would be the outskirts of the city, near a park or commuter train station.”

A search on iproperty.com, the country’s top property portal, reveals four SoHo developments that are currently in the pipeline.

They are the Selangor State Development Corp’s (PKNS) Kasturi Idaman in Kota Damansara, HR United Group’s SB1 and Persanda 2 in Sungai Besi and Shah Alam, respectively and Ong Chong Realty Sdn Bhd’s PJ5 SoHo in Kelana Jaya.

Previndran says there is a growing market for SoHo developments and cited YTL Land & Development Bhd’s CENTRIO at Pantai Hill Park in Bukit Kerinchi, Kuala Lumpur.

According to reports, 70% of the development (at CENTRIO) have been sold. It opened for sales in 2006.

Akashdeep Singh, a 30-something freelance film editor, says working from a SoHo provided him with great flexibility.

“Some people enjoy this lifestyle – working late and sleeping overnight. It can lead to a lot of office romances,” he says, laughing.

Akashdeep, who was going to India for a month that same day, says: “And in cases of emergencies, like if you need to take a sabbatical, you can avoid the hassle of giving notice. In a normal working environment, it’s hard to do this.”

Former lawyer Melissa Ram used to work out of her home and relished the fact that she could completely avoid traffic jams.

“There’s a lot of flexibility, plus there’s no overhead cost or rentals to worry about. With the internet, you can work from virtually anywhere.”

Melissa, however, adds that there were also drawbacks when working from home.

“Sometimes when you need to meet with clients, having them over in your house isn’t appropriate and in such situations, having an office would be better. In such situations, you would have to go out of your way to meet your client rather than to have the convenience of them coming to you.”

She adds, however, that if given a choice, she would still prefer to work from home.

“While working you could still manage the house and do the cooking. Plus, you could work till midnight and not have to worry about security issues.”

Malaysia outsourcing position could be in jeopardy (Call center Malaysia)

By Biz Times

MALAYSIA'S position as a preferred outsourcing hub could be in jeopardy as investors turn to cheaper locations during these tough economic times, an industry official said.

"While we may fare well with infrastructure, political stability, human capital and financial security, the million dollar question is still 'Are we cost-attractive?'," Customer Relationship Management and Contact Centre Association of Malaysia (CCAM) president Leo Ariyanayakam said.

He said since January this year, the industry has seen global clients looking for ways to cut costs.
"In the past month itself, we have seen blue-chip companies that used Malaysia as an outsourcing hub migrate up to 80 per cent of their back-office operations out of the country. "In times like these, cost is pivotal to global companies operating outside their shores. Malaysia may not have the desired cost advantage today to drive global outsourcers to its shores without stiff competition from countries like the Philippines," Ariyanayakam told Business Times.

He said there are many areas that the government can help to make Malaysia attractive as an outsourcing destination.

They include:
* Subsidising the cost of providing local human capital to the industry;
* Re-training grants to deploy displaced workers into the contact centre industry; and,
* Subsidising real-estate cost so that immediate value and cost propositions can be made to outsourcing clients to retain their businesses in Malaysia.

"A national framework for retraining and skills enhancement needs to be accelerated to provide value-added job creation for all categories of workers, be they unemployed graduates, the recently retrenched or the under-employed.

"With this in mind, speed-to- market is of the essence and funds for the re-education of our workforce are urgently required," Ariyanayakam said.

He said the government could also increase the number of value-added jobs available by providing enhanced services to the public, through the provision of outsourced contracts to local firms.

CCAM has about 500 members and they comprise mainly those in the banking, finance, hospitality, telecommunications and entertainment sectors.

Ariyanayakam is also chief executive officer and group executive director of Scicom (MSC) Bhd.

*Scicom (MSC) Berhad is a call center located/ address @ Menara TA One, Jalan P.Ramlee. Their clients include Nokia, GE money, Singtel, BAT, Viva Macau and etc.

Satyam saga’s impact on outsourcing industry

By the star

SATYAM’S fall from grace has been much discussed.

Besides tarnishing the accounting image of all Indian companies, this saga has newfound consequence to the outsourcing industry as a whole. With one of its stars being jolted into the spotlight for the wrong reasons, the entire industry is left to lick its wounds and consider the profound impact to the perception of the industry in the midst of challenging times.

Though unfair, the saga has affected confidence in India as a preferred choice of outsourcing destination. Recently, India’s IT industry suffered a major blow with the barring of Wipro Technologies and Megasoft Consultants from doing any work with World Bank.

These and other similar outcomes have alienated a number of clients from outsourcing companies in India. With the belief that the Satyam scandal may not be an isolated case, people are now starting to question the viability of other Indian companies as well.

Collectively, these events have a disastrous impact on the outsourcing industry for India and the IT industry as a whole. The question now is to what degree will this saga continue to beset Satyam and India, and more importantly how does the world perceive this?
A question of bad timing?

Indeed, the news could not have come at a worse time. Already struggling amidst the backdrop of a weak global economy, the global outsourcing industry now faces a new obstacle – an erosion of confidence.

Consider this. Even before the Satyam scandal broke out, companies were already trying to undercut one another with ridiculously low rates with some companies in India believed to be willing to offer up to a fifth off its competitors’ price.

Following the scandal, outsourcing companies will now have to confront another real obstacle on top of a slowing global economy.

Many questions are now posed after Satyam’s demise. How would customers now guarantee that the outsourcing company that they invest millions of dollars in, would not suffer the same fate as Satyam? What about shareholders and more importantly, financial institutions?
All these factors combined place huge strains upon even the largest outsourcing companies in the world when one can no longer count on a solid reputation to close deals or obtain financing backing.

Satyam’s collapse was so sudden and so badly affected the company that it reportedly didn’t have the money even to pay salaries in January (although subsequently they managed to secure some funding for this). Imagine, if this could happen to the first ever Indian Internet firm to be listed on the Nasdaq, the fear factor is exponentially increased for other smaller outsourcing or IT companies.

The prospects are becoming more daunting when anti-outsourcing voices are growing louder by the day, emanating from the US. Coupled with a weakened US economy, outsourcing companies that used clinch large contracts from American companies may need to brace themselves for a hard landing, especially those based in India.

Closer to home

Whilst the Satyam incident is mostly detrimental to outsourcing companies in India, there might be a reprieve for other countries that are building on their outsourcing competencies and trying to benefit from a slice of the Indian monopoly on major outsourcing deals.

Albeit the slice is thinning, I believe we will see more companies considering options aside from India.

Countries with burgeoning outsourcing companies like Philippines and Malaysia are likely to benefit from this.

Malaysia’s appeal lies not only with its reputation as one of the top ranked outsourcing countries in A.T. Kearney’s yearly rankings, but with external factors as well.

With the strengthening of the US dollar against the ringgit, there is now greater impetus for US firms to invest in Malaysia. There is also the huge untapped Middle East market that has yet to jump on the outsourcing bandwagon and Malaysia could be well poised to benefit from its close ties with countries in that region.

Nonetheless, Malaysia faces challenges from countries like China. Upon hearing about Satyam’s fall, a China IT outsourcer introduced a “zero cost transitioning” carrot to lure customers to switch alliance.

With the market thinning, competition is fierce and Malaysian outsourcing companies need to be more aggressive to capture every available potential.

* Opportunity for Malaysia's outsourcing company to get a slice of india's strong IT market? Much effort, R&D and motivation needed to get hold a slice of this IT fat cake.