IN this age of disruption and innovation, the Asia Pacific (AsPac) strengthens its information-technology (IT) adoption and capabilities as emerging markets, including the Philippines, continue to play catch-up, according to Infor, a leading global provider of industry-specific Cloud applications.
Infor said IT investment, from both public and private entities, has grown over the years on the back of improving economic situation in the region.
“It’s been a growth industry,” Infor CEO Charles Phillips told reporters during the recent opening of their new AsPac headquarters in Singapore.
This, he noted, is apparent in the increased spending of their customers on IT solutions as compared to previous years like when the financial crisis hit the global business community in 2009.
If today’s organizations are spending more on technology, he emphasized that they are more worried if they will miss something or get disrupted for not doing so.
“It’s more strategic now than it was 10 years ago, when people thought it was just a cost to do on business,” Phillips explained. “Now, they realize, you can change your business model and have a competitive advantage if you use technology in a clever way.”
Improved regional Cloud adoption
FROM a Cloud perspective, the AsPac region is by far the most matured internationally, specifically in New Zealand, where the needed infrastructure is in place.
“[It’s] almost ahead of Australia,” said Infor AsPac Senior Vice President (SVP) and General Manager (GM) Helen Masters. “In Southeast Asia, we have a lot more challenges country by country in the infrastructure that is available. But we’re starting to see that pick up.”
Among the 10 Asean member-nations, she pointed out that Singapore obviously is quite strong, while citing the Cloud Readiness Index (CRI) 2018 report of the Asia Cloud Computing Association, where this city state leads the way to digitization at No. 1 with a total score of 76.6.
This is followed by other mature economies, such as Hong Kong, which is ranked second for garnering 74.1 points; New Zealand, third, 71.1 points; Japan, fourth, 67.1 points; Taiwan, fifth, 66.9 points; Australia, 66.3 points; and South Korea, seventh, 64.8 points.
Completing the second half of the list are Asean peers Malaysia, eighth, 61.0 points; the Philippines, ninth, 53.6 points; Thailand, 10th, 50.6 points; and Indonesia, 11th, 49.4 points. Meanwhile, India (47.4 points), China (43.1 points) and Vietnam (41 points) settle at the bottom three, respectively.
According to Masters, Malaysia is starting to pick up, and Thailand is surprising in its willingness to embrace the Cloud.
While Indonesia has some challenges in terms of adoption, the executive bared that the world’s biggest Muslim nation is starting to get into the wireless network.
“[The] Philippines is starting to move again [to digital space],” she said. “We [may] have some infrastructural [problems there like] the slowness of the Internet, but I think it will get there, maybe another 18 months.”
Speaking about their local business, the Infor AsPac SVP and GM bared that they have a lot of customers in the country, particularly in core Manila and Cebu. In outlying areas with unstable connectivity, however, she said that it remains a challenge and sometimes a struggle to do business with.
PHL govt leads national digitization
WHILE digital transformation remains slow in the Philippines, the government is now leading the way toward this direction, thus encouraging other industries and business players to follow suit and accelerate their growth.
“We are seeing increased demand for digitalization in the public-sector space, where many organizations are quick to leverage the use of sophisticated enterprise software and automated solutions to introduce system-wide efficiencies,” Masters told the BusinessMirror in an interview.
Based on the results of this year’s CRI study, she said that the Philippines is consistently moving up in the ranking of 14 AsPac economies.
In particular, it did well on aspects like addressing privacy (8.5) and freedom of information (5.9), she noted.
These factors, according to her, are very relevant for the business-process outsourcing industry—one of the main growth sectors contributing largely to the growing national GDP.
This country, likewise, got favorable grades in business sophistication (5.9), cybersecurity (5.9), intellectual-property protection (5.9) and government regulatory environment (5.7).
It was a bit below the average score of 5 in terms of broadband quality (4.8), and power grid, green policy and sustainability (4.5).
The vulnerability to hurricanes and other natural disasters (3.9), as well as international connectivity (2.5), make it a risky destination for local information hubs, per the research.
“Excellent connectivity to regional data centers becomes imperative to accelerate the shift to digitization,” Masters said.
Previous reports have shown that the Philippines has the slowest Internet speed in Southeast Asia—an indication of its poor digital infrastructure.
The executive attributed this to the snail-pace transition to digitization of local businesses and organizations as compared to their counterparts in the region.
With the strong government drive towardsIndustry, however, she observes that many businesses today are encouraged to replace legacy systems with current technology to remain competitive in today’s connected business world.
“The government has invested significantly in infrastructure, and this has helped to accelerate the drive towards digitalization,” Masters said.
For instance, she cited the “Build, Build, Build” program of the Duterte administration, which is aimed at addressing the physical infrastructure challenges nationwide.
The digital infrastructure investments included in this initiative, she said, can help fast-track national economic growth.
Considering that international players leveraging on digital strategies are entering the domestic market, Masters urged organizations in all industries to learn to adapt to the evolving global landscape and take advantage of new strategies to transform.
“Modernizing, innovating and digitizing are keys to face the global competition,” the SVP and GM stressed.
Shift to digitization
DOMESTICALLY, Infor sees that there is already a strong digitization drive across the verticals of food and beverage, fashion, logistics, manufacturing and distribution.
In fact, the company has over 300 customers in these industries, Masters said, while revealing that they expect this trend to accelerate as they already are seeing increased demand for artificial intelligence (AI) and machine learning.
As regard to other digitization potential of other fields, Phillips noted that the health-care industry has recently picked up in terms of digitization, hence they are anticipating a big change in this area, as well.
Nevertheless, fields such as automobile and hospitality are generally slower, according to him.
“But they do recognize how digital transformation can impact their businesses on a monumental scale. We expect the pace of digitalization in these areas to quicken in the near future,” said the CEO of Infor.
Digital transformation should not be confused simply as the use of digital technologies like Cloud, mobility and Internet of Things.
For an organization to undergo this phase, Infor CFO Kevin Samuelson said that it must apply those technologies to create an evidence-based culture that uses improved decision-making to improve experiences and expand productivity and financial performance.
“In the digital era, how companies devise new data-centric business models, strategies and technology-enabled process capabilities will differentiate between long-term success and becoming marginalized,” he said.
Today’s generation of enterprise needs to integrate all its functions onto a single platform for scalability and agility in today’s digital marketplace, creating the so-called holistic commerce network.
Samuelson said that functions include procurement, manufacturing, distribution and sales, among others.
He cited, for instance, that a product may be manufactured in Asia, and subsequently distributed to suppliers on a global scale.
Integrating all functions onto a commerce network, he pointed out, will minimize “lag time [and] enable timely and intelligent decisions to be made, offering monumental growth and profitability for enterprises.”
At its core, a commerce network connects every supply-chain partner together, bringing visibility and collaboration across the entire supply-chain process.
“Sharing data means businesses can minimize lag time and enjoy faster communication, and with a commerce network, all supply-chain partners are impacted positively,” Samuelson said.
“Sophisticated tools such as AI, machine learning and analytics can also be built into existing cloud and enterprise systems to further deliver value, increasing competitiveness in today’s fast-paced digital marketplace,” he added.