Analyst firm predicts growing role of CIOs in PH enterprises

By Espie Angelica A. de Leon

The role of chief information officers (CIOs) is poised to become more and more important as they continue to assume bigger responsibilities critical to their organizations’ growth, stability, and digital transformation.

IDC Philippines market analyst Sean Paul Agapito presents IDC’s Top ICT Predictions for the Philippines for 2019 and Beyond at the Twin Cities Condominium in Makati City

This is the implication behind some of the leading ICT forecasts of market intelligence provider IDC for the Philippines. The analyst firm announced its top ICT predictions for the country for 2019 and beyond on January 24 at the Gallery at ASpace Greenbelt in Twin Cities Condominium, Makati City.

One forecast states that by 2020, 40% of CIOs will initiate a digital trust framework that goes beyond preventing cyberattacks.

“The prevention of cyberattacks is still a major goal of CIOs,” IDC Philippines market analyst Sean Paul Agapito said, “but it’s no longer enough.”

Agapito cited the increasing frequency and severity of cyberattacks worldwide which necessitates the development of a trust framework in every enterprise. This framework should involve the following: identifying the different types of cyberattacks, leading and orchestrating recovery efforts, and ensuring accountability across the enterprise.

IDC also predicts that by 2021, 54% of CIOs will expand Agile/DevOps practices into the wider business to achieve the velocity necessary for innovation, execution, and change.

And by 2020, 30% of enterprises will task CIOs to transform and modernize governance policies to seize the opportunities and confront new risks posed by AI, machine learning, data privacy and ethics.

CIOs need to play a key role in protecting employees, customers, and the public with effective, comprehensive information governance that ensures privacy protection while preventing inappropriate use of data assets, Agapito explained.

CIOs must also demonstrate leadership and prevent approaches to AI and machine learning that expose the business to risk and reputation damage, he added.

The increasing significance of CIOs in the organization rides on the coattails of other major ICT predictions by the global technology think tank — that by 2020, at least 30% of organizations will be digitally determined and total IT spending will jump from $14.2 billion  to $18.4 billion by 2022.

Agapito defined digitally determined enterprises as those which anticipate how their markets and customers will change and thus reinvent themselves accordingly using new business models and digitally enabled products and services.

To be digitally determined, an enterprise needs a blueprint with a unified enterprise strategy, a long-term investment plan based on the value of digital transformation, a single digital platform, and the will to make the required organizational and cultural changes.

Unfortunately, only about 18% of Philippine companies are in the “digitally determined” stage, a figure that keeps the local business community behind the frontrunners in the race for digital transformation in Asia Pacific. However, IDC expects the number to go up and reach the 30% mark by 2021.

IDC also predicts that by 2023, 55% of entities will have incorporated new digital KPIs focusing on product/service innovation rates, data capitalization, and employee experience, other than traditional metrics involving revenue growth, earnings per share, and operational efficiency.

Furthermore, the global think tank forecasts that by 2021, 40% of large enterprises will be creating data management or monetization capabilities – made possible by big data, machine learning and AI technologies — to enhance enterprise functions, strengthen competitiveness, and create new sources of revenue.

In the Philippines, adoption of these technologies for data management and monetization is merely concentrated in the banking, healthcare, and telecommunication industries. IDC expects more business entities from other industries to mine these new and emerging technologies as well.

IDC also touched on the creation of digital twins to allow closer collaboration between customers and suppliers, faster time to market, deliver more proactive services, and other outcomes.

Agapito cited Maynilad as among the local users of industrial IoT and other tools to create a digital twin of its entire operations including its water treatment facilities and vast pipe network. Maynilad’s digital replica gives the water services provider additional muscle to solve problems like leakages and water disruption and increase its customer reach.

IDC expects that more companies like Maynilad will eventually mine the benefits of digital twins in the next few years. Its prediction is that by 2023, 30% of top 1,000 companies in the Philippines will have implemented advanced digital twins of their processes.

IDC’s other predictions are as follows:

  • 2023 — Over 30% of organizations’ cloud deployments will include edge computing, and 15% of endpoint devices and systems will execute AI algorithms
  • 2023 — prominent in-industry value chains, enabled by blockchain, will have extended their digital platforms to their entire omni-experience ecosystems, thus reducing transaction costs by at least 30%
  • 2024 — AI-enabled user interfaces and process automation will replace one-third of today’s screen-based applications. 30% of enterprises will be using conversational speech technology for customer engagement by 2022

“Given the recent spike in the country’s digital development which has been driven by  both the initiative of the private sector and the renewed effort of the government, the Philippines is actually poised to catch up with the rest of its ASEAN counterparts and grow into a truly digital economy,” Agapito said.

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