Manila, January 8, 2016 – IDC Philippines announced today its top predictions
for the Philippine ICT industry, which underscores the importance of digital
transformation (DX) in
driving business
growth for both enterprises and small
and medium-sized enterprises (SMEs) on the 3rd Platform. Businesses in the
Philippines need to transform into a digitally-
led
organization through the use of 3rd Platform and innovation accelerators in order to
capture value-producing opportunities, pursue new revenue streams, and change an existing
business model.
According to IDC, 3rd Platform technologies include the 4
pillars of cloud, mobility, Big Data
analytics, and social, as well as the
6 innovation accelerators
of
IoT, cognitive computing, robotics, 3D printing,
virtual/augmented reality,
and
next-gen security.
Jubert Alberto, country head, IDC Philippines, says, “Companies in the Philippines that do
not
start a DX initiative will find themselves struggling to respond
to changing market
demands
and competitive
pressures. Digitalization has been heightening industry competition as it paves the way for business process excellence and new
monetization and
business models. Given increasing industry
disruptions brought about by digitalization, it is high time for Philippine enterprises and SMEs to make the
move into DX to help them scale
up in leadership, omni-experience, information, operating models, and worksource
transformation.”
Moreover, Alberto adds, "IT leaders in every Filipino organization must transform the
IT organization into a true business transformation
engine through IDC's new DX leadership
framework, Leading in 3D or 3-Dimensional
Leadership. Its goal
is
to 'Innovate', 'Integrate,' and
'Incorporate'
IT
within the organization to achieve
business-driven objectives."
This year, IDC’s top predictions are rebranded as IDC FutureScapes
for both technology
buyers/CxOs and ICT suppliers.
#1: DX-guided enterprise strategy. By the end of 2019, 80% of enterprise strategies will include
a significant DX component.
"Globalization, availability of analytics, and the Internet as an economic engine require nearly
every enterprise strategy and significant business change initiative to involve some aspect of 'digital,' whether it is improving customer experience
or internal operations or creating digital products and services. DX is leveraging IDC's 3rd Platform — cloud, mobility, Big Data and analytics (BDA), and
social business — to improve business agility,
effectiveness, and customer satisfaction," says Alon Anthony Rejano, analyst, IDC
Philippines.
#2: Authentic experiences. By 2020, 80% of Filipino B2C companies will have created an immersive
and authentic omni-experience for
customers, partners, and employees.
Jerome Dominguez, analyst, IDC Philippines, states, "In
the past, effective marketing
for
Filipino enterprises meant investing huge sums of money
on traditional media such as print and TV. Today, the continuous digital transformation is changing the way Filipino consumers
respond to marketing. Filipino consumers are making more use of social media than they
used to in the past, hence there is a greater need for companies to assess how they market
their products and services
in the digital space."
#3: Security and risk management. By 2017, 30% of IT organizations will shift their focus
to advanced "contain and control" security and away from a
perimeter mentality.
“By 2017, IDC expects traditional Philippine enterprises to be forced to make significant
operational changes to adjust to the accelerating disruption in the ICT industry. As Filipino
enterprises evolve to an information-led, information-centric business model, the strategic
importance of a strong security governance
model will be critical as the uptake of 3rd Platform technologies among businesses will widen
the
attack surface,” says Dominguez.
#4: Government focus on ICT. Digitalization at a national level will continue to be a
challenge but significant push
will be felt
in 2016.
“Although there
are administrative hurdles stalling progress, IDC expects the Filipino
government to pursue eGovernment initiatives geared
toward digitalizing processes and
improving transparency
more
actively this 2016. This also includes initiatives around Smart
City and
public WiFi systems in major centers in the country,” says Dominguez.
#5: Enterprise “tingi pack.” By the end of 2016, enterprise “tingi pack” for cloud and IT
services will
thrive
among
SMEs.
“The enterprise tingi pack is going to be common in the consumption of IT products and services. As the demand for cloud and other IT services increases
among local SMEs, the pay-as-you-go model will not only help grow the providers’ business but also support SMEs in starting a business using IT tools
that are budget-friendly, flexible, and competitive,” says Rejano.
#6: Realign suppliers and partners. By 2020, more than 30% of the IT vendors will not
exist as we
know them today, requiring a realignment
of
preferred vendor relationships.
The new
technologies, offerings, business models, competitors, partners, and buyers in the
emerging DX economy are putting tremendous pressure on traditional IT suppliers and
accelerating some new
players to market leadership roles. Over the next several years, we
will see nonstop shifts in vendor fortunes, with almost one-third of today's
leading suppliers
acquired, merged, downsized, or significantly repositioned. “While the
traditional IT suppliers are all migrating
their offerings
and organizations
to the 3rd Platform and
DX worlds, providing the customers migration paths, the impact is that they may or may not emerge
from
that transition as market
leaders,”
says Rejano.
#7: Skills-based marketplaces. By 2016, skills-based virtual coworkers in the Philippines
will continue to grow, spurring 3rd Platform usage and further outsourcing opportunities.
Nicolo Santos, analyst, IDC Philippines, says, "Online freelance jobs are
taking off, offering
job
opportunities to
many
Filipinos at the comfort of their homes. As
of
2015, there are approximately 1.3 million online freelancers in the Philippines, a number considered to be
one of the highest in the world. By 2016, there will be an additional 500,000 web-based workers to be
employed in different online job platforms, specifically coming from the
countryside, according to the Department of Science and
Technology (DOST)."
#8: Digitalized brick and mortar stores. By 2020, "brick and mortar"
stores will provide retailers with new sources of data to create bigger traction and
increase patronization and customer base through digital experiences.
An effective way by
which an eTailer venturing
into offline
channel can effectively
differentiate itself from its competition is through
coming up with a digital store strategy of its “brick and mortar” estate to provide a personalized customer experience akin to online. Digitalizing “brick and
mortar” stores does not only
entail deployment of cutting-edge
technology
solutions to improve in-store experience; it also
makes way for competitive data gathering. “There is a lot of potential to be realized
from analyzing the
multiple data sources
generated
from digitalizing physical stores — information that will allow retailers to both identify and target casual shoppers and, in the process, allow them to better position their products and services to stimulate loyalty to their brand,” adds Dominguez.
#9: AiO cards. By 2019, Filipinos will use all-in-one (AiO) cards more predominantly as DX
allows bridges of retail
payment
methods to become more interconnected.
"With a flourishing retail industry, IDC believes that payment processes will be evolving significantly quicker than before as digital disruptions continue to come about. Just recently,
Manila’s Railway Systems (MRT, LRT 1, and LRT 2) started offering reloadable cards
that can be topped up online. This is an auspicious start in the government’s
drive to digitalizing payment methods,"
says Linus Go, analyst, IDC Philippines.
#10: DX
adoption
in various
sectors. DX will start
to take off in "non-IT-intensive" industries like agribusiness and resource
industries in 2016.
IDC expects businesses in non-IT-intensive industries such as agriculture, agribusiness, and
resource industries to adopt 3rd Platform technologies
to bring innovations
in their business models and consumption patterns. “The
introduction of new
information and communication technologies
(ICT) in these industries
could make
these
industries
more sustainable as it
transforms
the businesses
and drive more
organizations to pursue
innovation-centric projects with
ICT
at their core,” says Rejano.
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