It is imperative that enterprises in the Philippines embrace digital transformation now. Do not resist the idea unless your organization wants to be digital dust. You should embrace digital transformation. Not tomorrow, but now!
International Data Corporation (IDC) Philippines issued this call out enterprises, and other organizations amid the fast-paced emergence of new technologies pushing digital transformation. Jubert Daniel Alberto, country head of operations of IDC Philippines, spoke with this journalist, laying down the five pillars of digital transformation that every organization must take into heart, implement, without leaving behind any of the pillars.
But first, he explained what “digital transformation” is. “In IDC term, what we call digital transformation is essentially the marriage between technology plus the business side of things. So, what we say is that technology, of course, will enable enterprises, organizations as a (way) to achieve whatever their goals are.
“Of course, ultimately the goals are to increase revenue, to find new digital revenue, (and) customer experience should be there (also),” Alberto said during a recent event his company organized at their headquarters in Bonifacio Global City, Taguig City. At the recent media briefing titled “IDC Philippines FutureScapes 2018,” Alberto and other analysts of the firm unveiled their Top 10 ICT Predictions.
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IDC provides global market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. “So, at IDC we look at five pillars of digital transformation framework:
1. leadership, it’s all about digital vision; 2. information, how to use information data to your advantage, to understand your customers to come up with new digital revenue streams; 3. omni-experience, what we call the customer pillar, you have to make sure that the experience is there, different kinds of challenge should be there; then, 4. operating model, how do you do things inside your organization matters really. All these four if you don’t have the people side it don’t matter, which essentially is the cultural side of things (5. culture),” he emphasized.
Alberto pointed out that what IDC wants to convey is that organizations in order to succeed as they move forward is that digital transformation must be embraced. The way to embrace it, he said, is for an organization to turn into a “digital native kind of behavior.”
“What this means is you have to be fast in doing things, you speed up your innovation, be agile, embrace change immediately. You do not resist it, because if you do that you will be part of digital dust,” the IDC Philippines executive said. It does not have to be in one fell swoop, he suggested, “‘unti-unti’ (little by little) there should already be embracing of digital transformation, and it’s not just implementing a technology, but understanding why you are implementing that particular technology.”
Don’t leave behind any of the five pillars, he cautioned. Alberto cited three factors based on IDC research on the hurdles faced by organizations in implementing digital transformation. These are cost, legacy systems, and lack of management buy-in of the idea.
The three factors were borne by the company’s research, he added, saying there are companies they were talking to with very good technology, very good operating model ready to embrace digital transformation.
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“But there’s no buy-in from their leaders. CEOs are not supporting but, instead, questioning, ‘why do we have to spend on those technologies.’ So, it will not succeed. The five pillars have to be there.” In these companies, Alberto said, the CIOs, CDOs and CMOs were the ones pushing digital transformation, particularly the CMOs.
“But if they will not be able to sell it (the idea) to the CEO, it will not happen,” he said, adding cultural mindset is also very important as everyone resists change. No wonder then that in the Philippines the implementation of digital transformation is only “between 2 and 3” on a scale of 1 to 5, five being the highest.
“So, moving forward if you want to be competitive in this border-less economy, you have to embrace digital transformation. (Organizations) have to start now, either for automation or as simple as putting an app out there for their customers (to raise their experience),” said Alberto.
“And, if you don’t do that now, pretty much all your competition, including the Ubers of the future, the Grabs of the future will (seize) that opportunity away from you. So, disruption is real.” Meanwhile, here are the Top 10 strategic predictions of IDC Philippines technology and industry analysts:
1: DX (digital transformation) Economy. By 2020, 25% of top 1,000 companies in the Philippines will see the majority of their businesses depend on their ability to create digitally enhanced products, services, and experiences.
2: Filipino DX Teams. By 2018, 25% of Philippine organizations will have dedicated digital transformation/innovation teams.
3: More Strategic ICT Push. By 2021, the government will have a more strategic ICT push to enable technology adoption among Philippine organizations.
4: Cybersecurity. By 2018, cybersecurity will become a tier-1 business priority receiving fixed capital spending for 30% of the top 1,000 companies in the Philippines.
5: Information-Based Products. By 2020, revenue growth from information-based products will be double that of the rest of the product/service portfolio for a quarter of the top 1,000 Philippine companies.
6: Hyper-disruptive marketplaces. By 2019, 40% of customer-facing top 1,000 companies will experiment with augmented reality/virtual reality (AR/VR) as part of their marketing efforts.
7: Customer-/Ecosystem-Facing Digital Services. By 2019, 65% of Philippine IT organizations will create new customer-facing and ecosystem-facing services to meet the business DX needs.
8: Digitalized Customer Support Interaction. By 2018, 60% of customer support interactions will be digitalized and occur in online communities.
9: Next-Wave Sari-Sari Store. By 2020, 30% of Philippine sari-sari stores will evolve to become another channel for one-stop payments and remittance centers.
10: ICT and BPO Disruption. By 2020, ICT and BPO markets will be disrupted by the pivot and policy changes from the Duterte and Trump administrations, if the industry does not take critical steps safeguarding the country’s inherent growth drivers.
Alberto noted the “incredible effect on the market” of the growth of digital transformation which opens the floodgates of opportunities for business because of stronger relationships with their end-user, flattens organizational structures, and redefine traditional industries.