Assessment of the impact of IT outsourcing on IT education in Malaysian institutions of higher learnings

Abstract— Malaysia is aggressively promoting its shared services and outsourcing (SSO) business models across vertical industries as a preferred hub in Asia. It is projected for multiple growths in demand for IT graduates to fulfill this IT outsourcing phenomenon by 2012. This poses a question to the Institutions of Higher Learnings (IHLs) in Malaysia. Can the present IT curriculum equip the graduates with skills and knowledge for different vertical industries and produce knowledge workers? In this study, we not only examined and reviewed available literature, newspaper and web articles, companies’ websites and press releases but also sought in-depth insights and experiences from senior executive managements in service provider firms in Klang Valley on the skills and capabilities requirements of fresh IT graduates to fulfill the market needs of IT outsourcing in Malaysia. In addition, a CEO roundtable
discussion was held in International Islamic University Malaysia which also discussed on the topic. The research team found that technical, soft and problem-solving skills are the main areas of concerns necessary to develop knowledge workers that meet the
requirements of the SSO industry.

Introduction
THE rapid change in information and communication technology (ICT), businesses practices, and innovations warrant for realignment of the IT curriculum to suit the needs for business strategies. IT outsourcing (ITO) phenomenon has sparked this new requirements for skills, knowledge and capabilities of IT graduates in Malaysia. Businesses are currently outsourcing the following jobs: maintenance/repair, training, applications development, consulting and reengineering, and mainframe data centers; and executives are considering outsourcing: client/server development, networks, desktop systems, end-user support, and full IT departments.

Multimedia Development Corporation (MDec) is a government arm entrusted to spearhead the growth of IT industry with its Multimedia Super Corridor (MSC) flagship initiatives. Recently, the Prime Minister of Malaysia has launched the Shared Services and Outsourcing (SSO) initiative in Austin, Texas in 2005 in an effort to promote Malaysia as a preferred SSO hub in Asia. Experts predict that although many entry-level jobs are being moved offshore, there is a looming shortage of technical workers in the US [8][11] [14].

Recent media reports on the frantic efforts by Malaysia to become the top shared services and outsourcing hub in Asia has opened up the issue on IT workforce to complement this noble business move by the government.

A. Growth of SSO market
The global worldwide Shared Services and Outsourcing (SSO) market is expected to grow at a CAGR of 15 per cent over the next few years, reaching USD1.43 trillion by 2009 as compared to USD930 billion in 2006.

“The outsourcing need is growing and we intend to fully leverage on our achievements to meet this need,” said MDec Chief Executive Officer. He added that ICT services like SSO contributed RM2.8 billion to the Malaysia Gross Domestic Product of RM495.6 billion. Multimedia Development Corporation (MDec) is a government arm to spearhead the growth of IT industry with its Multimedia Super Corridor (MSC) flagship initiatives. Outsourcing Malaysia and PIKOM chairman cited that the local SSO industry is currently worth USD300 million growing at a CAGR of 30% year on year, compared with the current global IT outsourcing size of USD24 billion. In 2012, the Malaysian SSO industry is targeted to be worth USD2 billion providing 300,000 jobs.

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